Is there a canary in the coalmine? 2019 was another eventful year for the island of Bali: Outbound tourists from China stumbled in 2019, with declines seen across most leading tourism markets in the region, including, but not only, Bali.

The ongoing trade tensions between Beijing and Washington D.C., combined with the Hong Kong protests caused Chinese citizens to be more concerned with future economic conditions and more focused on their savings. With less incentive to travel, this led many Chinese citizens not to travel to Bali.

Another issue is the Chinese ‘zero-dollar’ tourism, which refers to cheap bus tours that do not generate significant revenue or jobs to local economies. After many years without action, the Balinese Provincial Government has started putting efforts into reorganizing Bali’s tourism and pursuing stricter consumer protection regulations, including the closure of unlicensed shops and tour operators.

Due to over tourism and environmental concerns, Bali was included as one of 13 destinations on Travel guide Fodor’s “no go” list in 2020. Bali faces looming ecological challenges such as trash on the beach, traffic jams in main tourist districts, and freshwater scarcity. Without solving these problems, Bali island has to rein in its tourism growth.

Nearly 6.3 million international visitors came to Bali in 2019, or about 39% of the 16.1 million foreign visitors to Indonesia (↑2% YOY). President Joko Widodo’s ambition to change this dynamic by pushing “10 New Balis” is yet to draw significant foreign visitors away from Bali to alternative destinations around Indonesia. The next largest gateways were Jakarta with 2.41m (↓14% YOY) and Batam with 1.94m (↑3% YOY). 

There has not been a quiet moment on the “Island of the Gods.” Mount Agung’s explosive activity continued in  2019, with increasingly frequent and intense explosions from February to May and two explosions in June, which produced substantial ash plumes that clouded the region. No airport closure however limited the effect on tourism arrivals.

Bali Visitor Arrivals:

Anaemic Domestic Travel is a Black Swan.

According to BPS forecasts (actual’s not yet available), the number of domestic tourists to Bali would decrease in 2019 to approximately 6.2 million, a six-year record low & down 36.5% YOY. This is blamed almost entirely on high nation-wide domestic airfares in Indonesia, with the duopoly of Garuda and Lionair forcing prices sky high.

Exorbitant domestic airfares were often more expensive than international airfares in 2019, causing travellers to rethink domestic travel and many chose Malaysia, Singapore or Thailand as vacation destinations.

Another contributing factor was the 2019 re-election of Pak Jokowi which had a dampening effect on domestic business / MICE tourism in the first few months of the year.

Read the full report here