Quantity Not Quality Hurts Bali Tourism

Chinese tourists in BaliSurging Chinese visits to Bali ensure the holiday island’s tourism numbers continue growing – but at what cost?

That’s the question posed by a new report from Horwarth  HTL and C9 Hotelworks.

It reveals that the 23% increase in international tourism to almost 5m visitors through 2016 was fuelled by China, which  will soon overtake Australia as Bali’s number one source market.

But the report argues this may not in the long-term interest of Bali, where infrastructure such as roads, sewage and garbage collection is under immense pressure.

Ironically a major reason for the jump in Chinese tourists is the Thai government’s decision to ban  “zero dollar tour junkets” mainland China as part of a strategic shift to quality over quantity.

“In the later part of last year as Thailand’s government banned zero-dollar tour junkets from the Mainland, Bali benefited from a re-direct of business,” says Bill Barnett from C9 Hotelworks.

“Two critical factors are a knock-on effect from the dynamic shift.

“First is a lower spend per visitor.  A 2016 survey by the Bank of Indonesia highlights that the typical Chinese tourist spends around one quarter of that spent by a typical European or Australian tourist.

“With the proportion of Chinese tourists increasing the economic benefits of each new tourist is reducing.

“Secondly is the shorter length of stay. The average length of stay in Bali YTD September 2016 fell to 3.11 days, down from 3.20 days year on year.

“This is a double-whammy for hotels, with lower yield per tourist and a shorter length of stay.”

The report argues that Bali should be wary of over-dependence on China.

“It is essential however to foster other markets simultaneously to balance quantity and quality of foreign arrivals.

“The Thai experience is one to learn from, having aggressively targeted arrivals growth over the last Thailand government and tourism promotion has now shifted focus to increasing the yield per tourist.”

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