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Old 27th Oct 2002, 11:24
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Wirraway
 
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Bali Hotel Operators See Occupancy Falling Further
By I Made Sentana
Of DOW JONES NEWSWIRES

JAKARTA (Dow Jones)--Hotel operators in Bali said Friday occupancy rates have slumped to historic lows of around 10% following the Oct. 12 bomb attack that killed more than 180 tourists, most of them Westerners.

And prospects for the coming weeks are even grimmer as more people cancel holidays, with occupancy rates expected to fall to as low as 5%, major hotels contacted by Dow Jones Newswires estimate, dealing a further blow to Bali's - and Indonesia's - tourism industry.

Many hoteliers predict it'll be at least one year before Bali can fully recover from the attack, provided there are no further major incidents on the island or elsewhere in Indonesia.

Occupancy rates fell to 20% immediately after the attack as many tourists cut short their holidays amid security fears. Others stayed on but are expected to leave in coming days, adding to the woes of hotels, restaurants and nightspots on the resort island, which derives more than 80% of its income from tourism.

Hotels were filling about 70% of total rooms before the devastating attack on the Sari Club along the busiest street of Bali's popular Kuta beach area.

"I think occupancy will continue to fall to around 5%-6% next week as the remaining tourists who are still here leave, while few will come," said Jero Gede Karang Suarsana, who owns the Bali Tropic hotel, a medium-sized hotel on Nusa Dua beach, which is about 30 minutes ride from Kuta.

The Hyatt - the U.S.-owned chain which runs an 800-room hotel on Nusa Dua - expects current occupancy rates of 10% to fall in coming weeks, but is forecasting a pickup in late December to around 30%.

Tourists from Indonesia and other Asian countries are still expected to come for year-end holidays, said Arifin Dharmawan, the Grand Hyatt Nusa Dua's marketing director.

But tourists from Western countries - including Australia, which lost many of its citizens in the bombing - are unlikely to come back any time soon due to travel warnings from their governments.

Travel Warnings

Australia, the U.S., and Britain are just some of the countries advising their citizens against travel to Indonesia on fears of further attacks targeted at Westerners.

President Megawati Sukarnoputri's government has failed to restore confidence since the blast, giving mixed signals about its commitment and ability to clamp down on militant groups operating on Indonesian soil.

No one is sure how long a recovery might take. In Luxor, Egypt, after a November 1997 attack that killed some 70 people, tourists began returning within six months, according to the International Crisis Group, a Brussels-based think-tank.

For Bali, the only certainty is for a huge upswing in unemployment on an island where a majority rely on tourism for a living.

Last year, the tourism industry in Bali - with around 1,400 hotels and guest houses and almost 750 restaurants - generated $1.4 billion of Indonesia's total $5.4 billion in tourism revenues.

Indonesia is likely to also lose out, with many analysts forecasting economic growth next year will fall short of previous expectations due to the loss of tourism revenues and other foreign direct investment.

Standard Chartered Bank for example expects gross domestic product in 2003 to grow by 3.3%, down from a forecast of 4.3% before the bombing.

-By I Made Sentana, Dow Jones Newswires; 6221 3983 1277; [email protected]
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