COVID-19 could cost Indonesia tourism $2.8 bln in lost forex earnings, says minister
JAKARTA – The coronavirus, or COVID-19, outbreak could cost Indonesia’s tourism industry $2.8 billion in foreign exchange earnings, Minister of Tourism and Creative Economy Wishnutama Kusubandio told local media on Wednesday (Feb 12).
The estimate is based on 2 million China nationals visiting Indonesia in 2019.
The minister said any losses will depend on how long the virus outbreak will last.
Indonesia has no reported cases of the COVID-19 as of Wednesday (Feb 12) but it has already impacted business as China is a substantial source market for foreign arrivals.
2.07 million Chinese nationals visited Indonesia in 2019, making up 12.86% of the 16.11 million foreign arrivals. China is the second biggest tourist source market for Indonesia, behind Malaysia that sent 2.98 million travellers.
Hariyadi Sukamdani, chairperson of Indonesia Hotels and Restaurants Association (PHRI), told Salaam Gateway he estimates Indonesia lost around 1.3 trillion rupiah ($95 million) in January. His estimate is based on the loss of 3,000 arrivals from China, each of whom would have spent $1,000 per visit on average.
Hariyadi told local media on Monday (Feb 10) that more than 40,000 hotel bookings in popular destination Bali had been cancelled since the outbreak.
"This coronavirus has overwhelmed us, especially the tourist sector in Bali where more than 40,000 room bookings were cancelled and 20,000 people annulled their visits,” The Jakarta Post quoted him as saying.
The PHRI chairperson also said that imports and exports, including of live fish, has been disrupted.
Riyanto Sofyan, owner of Muslim-friendly Sofyan Hotel, said the outbreak will impact tourists’ willingness to travel overseas.
“I worry about [travelling for] umrah and other business trips,” said Riyanto.
“If there’s nothing urgent, I believe people will be reluctant to travel abroad even if it is a business trip. It’s impossible to do business trips especially to Hong Kong and Singapore at this time.”
Singapore is the most affected by COVID-19 outside of China, reporting 47 cases as at Feb 12, according to the World Health Organisation daily situation report. This doesn't take into account the 175 confirmed cases on the cruise ship quarantined near Tokyo. Authorities in Singapore have already slashed their visitor arrivals target by 25-30%.
AB Sadewa, VP Brand and Communications, Panorama Group, told Salaam Gateway the tourism industry is easily driven by perception.
He sees an opportunity for travel agents and airline operators to attract other foreign travellers to Indonesia, saying government incentives would help travel companies.
“It’s time to deliver a positive perception that Indonesia is still a safe and comfortable destination. Otherwise, our tourism can be affected,” he said.
“For Panorama, since we don’t target China as a source market for inbound and outbound tourists, it’s only 9% of our portfolio, our business is still doing well.
“Our main market is Europe, Southeast Asia and Scandinavia,” he said.
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