Indonesia stands to lose $4 billion in earnings from tourism if its worst-case scenario materializes and travel from China is disrupted for the whole year by a virus epidemic, the tourism minister said on Thursday.
The main tourist destination, the holiday island of Bali, had already seen around 10,000 cancellations by the end of last month, according to the Bali Tourism Board.
“We had two million (Chinese) visitors last year with an average spend of $1,400 per arrival,” Wishnutama Kusubandio told a news conference.
“With the negative trend seen in tourists from other countries, the loss would be even more significant. We will lose $4 billion.”
The minister said he was extrapolating numbers for the whole year, despite uncertainties surrounding the virus, because bookings for summer holidays, which have usually started to trickle in by now, have been low.
The government has encouraged airlines to discount fares for routes to Bali, the tourist island of Bintan south of Singapore and Manado city in North Sulawesi to attract visitors from outside China, said Adita Irawati, a transport ministry official.
Indonesian authorities have said they expect little overall economic impact despite the hit to tourism, pointing to the industry’s relatively small contribution to the economy.
Travel and tourism accounted for 6% of Indonesia’s GDP in 2018, the World Travel and Tourism Council said.
Frederico Gil Sander, the World Bank’s lead economist for Indonesia, told a forum with foreign correspondents recently that although 10% to 15% of total tourists coming to Indonesia are from China, tourism’s share of the economy is small.
The coronavirus epidemic has killed 563 people in China and two deaths have been confirmed elsewhere. Though the virus has been found in more than two dozen countries, Indonesia has no confirmed cases of infection.
(Reporting by Maikel Jefriando; Writing by Gayatri Suroyo; Editing by Ed Davies and Jacqueline Wong)