SINGAPORE (eTN) – In January 2010, the information had the effect of dropping a bomb on tourism for both Batam and Bintan, two Indonesian islands from the Riau archipelago, across Singapore. New regulations following the misuse of fees imposed on citizens eligible for visa on arrivals (VOA) forced the Indonesian government to abolish the 7-day visa (at US$10) to leave only a 30-day visa for US$25. Local newpapers revealed last year that the Supreme Audit Agency (BPK) had found more than Rp 3 billion (US$321,000) in unreported fees for visas on arrival collected over a 6-month period at Bali Ngurah Rai International Airport in Denpasar, when officials issued US$10 visas to travelers who had paid in reality US$25.
The regulation made local tourism authorities and private business worried, as most of the tourists coming to the Riau Archipelago stay for a very short time, generally less than 3 days. The daily newspaper, “The Jakarta Post,” reported in January 2010 that following the introduction of the new regulation imposing the US$25 visa to all tourists on a VOA scheme, travel agencies complained immediately about the cancellation of tours from Indian and Korean travelers. A trend confirmed by Karen Chan, Marketing Communications Manager for Bintan Resorts International, who said: “Looking at the trends after the increase of the VOA fees in January 2010, the foreign nationals residing in Singapore who require VOA to Indonesia saw a decrease in the frequency of visits to Bintan.” Battles of numbers occurred then between officials and local businessmen, the latter claiming that the rise in fees could translate into a potential loss of US$460 million in a year.
Under pressure, the Indonesian government took a first step to alter the regulation in July 2010 by offering again a “group” VOA (a minimum of 4 people traveling together could then apply again for a 7-day VOA at US$10). “The situation was somewhat addressed by the implementation of this ‘group’ VOA in July 2010. Bintan Resorts saw, consequently, a positive growth of 5.7% in visitor arrivals for the year 2010, as compared to the previous year,” added Karen Chan.
The occurred changes concerned, however, only a minority of travelers. Looking at the origin of international travelers coming to Batam or Bintan, most visitors come from neighboring countries such as Malaysia and Singapore and do not, in fact, need a visa to enter both destinations. Looking at data for June 2011, Singaporeans and Malaysians represented 77.6% of all arrivals into Batam Island and 85.5% of total foreign arrivals to Tanjung Pinang in Bintan. Other large groups of travelers from Northeast Asia, India, Australia, North America, or Europe, represented in Batam only 11.5% of all arrivals in June and less than 5% in Tanjung Pinang in Bintan.
Meanwhile, last July, the Indonesian government finally confirmed the complete reversal to the old rule with the 7-day VOA applying from now to any individual traveler. “As for the recent re-introduction of the US$10 VOA in July 2011, it is still too soon to see any impact as it has been only two months, but we envisage it will have a positive effect on Bintan. For January-August 2011, we already achieved 12.4% growth in visitor arrivals, as compared to 2010. We expect this trend to continue, barring any major upheavals in the world,” told Karen Chan to eTN.
The new regulation will also please the provincial government. In August, Batam Mayor Ahmad Dahlan announced that he wanted to turn Batam into a “tourism portal” for Western Indonesia by 2015. The local administration will continue to strengthen tourism promotion and provide the legal framework and financial incentives to develop new tourism infrastructure. Among the latest projects is the start of a tourist center around Raja Haji Fisabilillah district or Barelang I bridge by the end of 2011. The center would have a concert area, a sports center, a shopping complex and a historical gallery. “The place will be Batam’s integrated tourist center,” Ahmad said to local newspapers. Batam administration has allocated Rp 3.2 billion (US$374,400) toward the project. Tourism investments currently represent 16% of all private investments on Batam Island, the equivalent of US$800 million.