Tourists Fuel 80 Percent Of Bali’s Economy

Indonesia suspended its visa-on-arrival policy to curb the spread of the deadly COVID-19 virus across the archipelago.

The move has all but shut down the country’s tourism industry, where more than three-quarters of the economy is linked to tourism, the de-facto border closure could prove catastrophic for the population of 4.2 million people.

“About 80 percent of Bali’s GDP is based on tourism,” said Ross Taylor, president of the Indonesia Institute, a foreign policy think-tank at Melbourne’s Monash University.

Over the last 15 years, young people have moved to tourist areas for jobs, while at the same time, their parents have sold their rice paddies to developers.

“There’s been this huge transition where almost everyone has placed all their eggs in the tourism basket,” Taylor added. “The result of taking that away would be catastrophic.

“In most Western countries, households have some financial buffer. But in Bali, most people earn only a couple of hundreds of dollars a month. They live from day-to-day or month-to-month. If they lose their jobs, they will have nothing to fall back on.”

Hasrat Aceh, one of thousands of hospitality workers on the island who have already been placed on holidays or unpaid leave, puts it more starkly: “Without tourists, Bali will die.”

Bali has proven resilient to the global decline in tourism caused by the COVID-19 pandemic. With no cases of COVID-19 reported in Indonesia, 400,000 tourists from Australia, Russia, South Korea, India, Japan and more than 100 other countries headed to Bali. In the first 12 days of March, a further 114,000 foreigners arrived.

Hilary Faverman, an American who arrived in Bali two weeks ago with her young family, explained why she did not want to defer the trip. “We were already overseas, and we’re healthy people, not at risk,” she said.

“We actually feel safer in Bali right now. We’re more concerned about having our kids exposed to the hysteria that’s taken over in the West. No one here is panicking or hoarding food.”

But chinks in the armour began to appear when Indonesia reported its first COVID-19-related death. A 52-year-old British woman who died while under isolation in a private hospital on Bali.

As of March 18, 17 people have died, and 227 have been infected with COVID-19 in Indonesia, although experts from other countries have long worried the real number is probably much higher.

Tourists and expats are now leaving Bali in droves over fears the airport will close and they will be stuck on the island for weeks or even months.

“I’ve decided to leave,” said Camilla Cahill, a British tourist. “It’s not about wanting to leave or stay. My community of friends here are all leaving. If I get sick, I don’t think there will be anyone left to call here. In the UK, I will have my family and support system.”

Australian Karma Voice wrote on a Facebook page for expats in Bali: “With a very heavy heart and tears I just booked a ticket home after reading a reliable source news article saying Australia is recommending it’s citizens go home as they are not sure if they will need to close the borders soon. I have some health issues that if I get sick I wouldn’t want to take hospital space over any locals.”

Hasrat Aceh, who normally works as a butler at a luxury villa, is now working as a motorbike driver with Grab, a popular ride-sharing app in Indonesia.

“People in Bali, we don’t complain. If we have a problem, we try to see a way through it,” he said.

But for the 170,000 Balinese living on less than $2 a day, there is no Plan B, said Ariyo Irhamna, an economist specialising in poverty at the Institute for Development of Economics and Finance in Jakarta.

“Many people will lose their jobs because there will be no tourists. But it will impact the poorest people most,” he said. “What we’re hearing is that the central government in Jakarta may not be able to help them. They are concentrating on incentives for investors and the business community.”

  • Number of travellers from China and Europe plummets as Indonesia imposes travel restrictions and airlines around the world pull flights
  • Hotels in Bali are laying off staff, while some regions have suffered a hit of up to 90 per cent of their revenue amid shrinking tourism

Solemen Indonesia, a charity that supports 2,340 people with physical and mental disabilities in Bali, says the most vulnerable in society are already hugely at risk.

“Most of our funding comes from the hospitality industry. How can we help people if we have no money?” said Robert Epstone, the charity’s British-born founder. “It will be potentially catastrophic if all our funding is withdrawn because it’s all thousands of people in Bali have to fend off starvation.”

I Gusti Ngurah Adi Mahendra, the owner of a tour agency on Bali, has lost 80 percent of his income after receiving mass cancellations from clients amid the ongoing coronavirus outbreak.

About 98 percent of people who book tours at his Bali OneTwo Trip tour agency are from Australia, New Zealand, the United States, Western European countries and others, and many have postponed their holidays for “an indefinite period of time.”

Although the 27-year-old entrepreneur has no Chinese customers so far, he admitted “we were also affected” as a result of declining tourists from China visiting the island.

For now, Mahendra is closely watching the situation and waiting for updates from the government. He said he would only get in touch with his customers and promote his tours again “when things get back to normal.”

As the pandemic weakens Indonesia’s economy, the tourism industry has been hit exceptionally hard due to the plummeting number of inbound tourists. Last month, Indonesia imposed a temporary travel ban to and from mainland China, and halted 260 direct flights from Bali to a number of Chinese cities such as Beijing, Guangzhou and Shanghai. On March 20, the government suspended visa-free and visa-on-arrival for visitors from 169 countries and territories for one month.

The Balinese have experienced economic calamity repeatedly, including the Indonesian Riots of 1988, the Bali bombings of 2002 and 2005, the tsunami of 2004, the Global Financial Crisis in 2009 and the Mount Agung volcanic eruption in 2017. On every occasion, tourists fled only to return in even larger numbers. Hopefully, this time will not be an exception. The biggest question is when.

Mahendra, who started his business three years ago, said he would still partner with 10 drivers and four tour guides despite slowing business. He is also maintaining the same prices for his tour packages, which start from 600,000 rupiah (US$39) for a car of two to seven passengers, and lasting eight to 10 hours.

“The current impact is concerning for everyone,” he said. “Bali’s tourism has been almost totally paralyzed. This is very worrying.”

As the pandemic puts pressure on Indonesia’s economy, the tourism industry has also been hit due to plummeting number of inbound tourists. The nation reported its first cases on March 2, and has 450 infections as of March 21. Twenty people have recovered from the illness, while 38 patients have died. The crisis is far from over for millions of Indonesians, not just those in the travel and tourism industries.

Indonesia is the fourth-largest nation in the world with more than 267 million people. The country is comprised of more than 17,500 islands, including Bali, Borneo, Java, Lombok, Sumatra and Sulawesi. Learn more about Indonesia.

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