China's tourism boom prompts fears that Bali is being 'sold cheap'
26 August 2018
Denpasar: Australians have flocked to Bali for decades, drawn by the luxurious accommodation, cheap food and beer and the distinctive cultural experience. Many feel something approaching a sense of ownership of the idyllic island.
But we are far from the only people who enjoy Bali's charms, and the type of tourists travelling to Bali is changing rapidly.
The emergence of so-called "zero-dollar" Chinese tourism is beginning to reshape the market in Bali, and local tourist groups, as well as the Chinese consul on the island, are concerned that dodgy operators and business practices are cutting locals out of a share of the profits from shopping, while also risking the safety of Chinese visitors.
According to statistics from the Bali Tourism Promotion Board, Australia is no longer the number one source for tourists to Bali. For the first time, that honour now belongs to China.
In 2017, 1.09 million Aussies visited Bali, down from 1.14 million in 2016. In the same period, the number of Chinese visitors leapt from 987,000 to 1.39 million.
Zero-dollar tourism works like this. Back in China, would-be tourists are offered heavily discounted, all-inclusive package tours that include accommodation as well as flights, transport, meals and translators.
The trade-off is that, along with the usual trips to the beach and fine restaurants, tourists are also taken to overpriced shops and urged – in some cases, reportedly even intimidated – into buying marked-up goods.
At least some of the time, money from shopping then flows back to the tour operator from the shop owners, to make up for the money lost from the discounted travel package.
The zero-dollar tourism model is already in use in countries including Thailand, Vietnam and Russia.
According to the South China Morning Post, Thai authorities have put the squeeze on zero-dollar tourism. This is, in part at least, because so much of the revenue from the shopping component of the tours flows straight back to China. The shops in Thailand are Chinese-owned and run by Thai proxies.
Bali Tourism Board chairman Ida Bagus Agung Partha Adnyana estimates the number of zero-dollar Chinese tourists coming to Bali now could be as high as 70 per cent of the nearly 1.4 million people coming to the island, which is "very alarming", though he can't prove the claim.
Locals are losing out when Chinese tour groups are taken to Chinese-owned or backed shops and "payments are made directly to China", Agung tells Fairfax Media.
Unscrupulous operators are "squeezing" tourists to shop while in Bali, he adds, and skipping over the cultural tourism Bali has to offer, taking visitors to "shops owned by the Chinese".
"They pay using WeChat payment [a payment platform in China], so it didn't even go through Indonesia, it went straight back to China," he says.
"Chinese tourists, of course, they benefit Bali. They are staying in Bali's hotels, restaurants; they still pay for the tour packages. [It's] just the shopping that we are missing out [on]. But our image will be bad, it will create an image as if Bali is 'cheap'."
In 2017, 1.09 million Aussies visited Bali, while the number of Chinese visitors was 1.39 million.
The Indonesian government needs to crack down on the number of foreigners working as tour guides for Chinese groups without the appropriate visa, he says.
Hery Sudiarto, the head of the Chinese committee for Asita, the Indonesian tours and travel agents' association, confirms "these [zero-dollar] practices exist in Bali, it is not a secret".
"I can't accurately say how many of the 1.4 million tourists [in 2017] were part of the [zero-dollar] packages, because we don't have the statistics, but it was significant, very significant."
Sudiarto says Chinese tourists used to fit three categories: "Low, middle, high. Now there are maybe seven, there are segments higher than high, below low. Now there's 'very low', special request."
It's that lowest category that is a concern, Sudiarto says, because high volumes of tourists and poor-quality tour packages could drive down Bali's reputation as a high-end tourist destination.
Latex, batik and agar wood products are some of the more popular items being sold to Chinese tourists but, Agung says, sometimes the products being sold aren't actually made in Indonesia.
"Like latex: why would Chinese come all the way here to buy pillows? Because they were informed that Indonesia is a producer of rubber, when the products are really from China. That's one of their sales tricks," he says.
In a car park near Ngurah Rai airport in Bali, a row of buses is lined up outside a shop, though there is little in the way of signs out front to indicate what is for sale inside.
Inside, a sign says that this shop sells latex products, and a locker with hundreds of ID tags stands next to a reception desk and a handful of staff.
When Fairfax Media attempted to join a group of Chinese tourists who had arrived to go shopping, staff in the shop quickly intervened and "guided" us to the reception desk.
The message was blunt. The store only accepted Chinese tourists from Chinese tour groups, and was not open to the public. As this conversation took place, another group of tourists wearing ID tags was taken to the second floor to shop.
It's not just local tourism groups in Bali concerned about the big upswing in tourism from zero-dollar packages.
China's consul in Bali, Gou Haodong, says tourism from his country is booming and "generally speaking, it's going well".
However, he has heard complaints from both sides which need to be addressed, and he is quick to condemn zero-dollar tourism. He is not impressed when told Fairfax Media was refused entry to the latex shop.
"May I suggest the local media investigate if there's anything illegal. Why they are behaving this way? ... What you told me has caused me suspicion."
Gou is so concerned that he has asked that stakeholders including tourism organisations, immigration, police, hotels and restaurant groups and government officials meet to discuss ways to tackle the problem.
"From the Balinese side we have heard complaints about illegal tourist guides coming here. And with the free visa arrangements [between China and Indonesia], they come here and set up business, that's illegal.
"From the Chinese side we have heard complaints ... like poor service. But on this one, actually it's from both sides ... There are these tourists who are recruited to join this kind of [low-profit or zero-dollar] group [who] end up being [in a] very uncomfortable experience."
Local tour operators have informally complained to him about zero-dollar tourism, he says. In turn, he wants scrupulous tour operators in Bali to focus on "high-end tourists, or cultural tourists rather than mass tourists".
And what about the tourists themselves?
Fairfax Media spoke to half a dozen Chinese tourists, most of whom were on package tours, over the course of a week. Despite the concerns raised, none had been forced to shop, though for all of them, shopping in Bali was a big part of the trip.
At the famous Tanah Lot, a temple by the sea, student Chen Lizhu from Xi'an city, in Shaanxi province, is part of a tour group of 10 people who have come to Bali for six days.
She paid 6000RMB (about $1200) for her trip, and says the hotels and restaurants that are part of the package have been excellent. Shopping, along with trips to the beach, has been a big part of it.
"We will visit a latex company later, we don't have to buy anything, depends on the prices really. But I will likely buy, because my tour guide will get points if we shop. He's nice. But no, we don't have to buy anything."
Luo Rui Jin, from Foshan, who was also visiting Tanah Lot as part of a tour group of 18 people, says shopping has been a major feature of the trip.
"We went to beaches, we went shopping too ... my cousin and her parents bought a mattress and pillows, it was 450RMB [$90]. She paid cash. I didn't buy, because I just bought my mattress a year ago, it's still new. She bought it because the product here is real [not fake], also 20 per cent cheaper than China."
It's likely, of course, that most tourists have no idea who owns the shops they are being taken to. Why would they? That's how zero-dollar tourism works.
Agung supplied fliers to Fairfax Media that he suggested were examples of zero-dollar tourism packages.
These fliers advertise tours to China with prices that appear to be well below market rates. A luxury package tour that offers three nights at a local five-star hotel, two nights at the luxury Mulia resort or equivalent, flights from China, river rafting and a glass-bottom boat tour for between $997 and $1177.
A search on the Indonesian Traveloka website puts the cost of a room at the Mulia resort in Nusa Dua at between $357 and $517 per night.
Other tour fliers specify "no shopping" and the cost of these tours can run from $1438 to $1557 for six days and five nights. The cost of similar tours that include shopping can run as low as $758, or nearly half the price.
Gou says zero-dollar tourism and unscrupulous operators could ruin "Bali's reputation as a tourist attraction".
And, referring to the recent ferry tragedy in Phuket, Thailand, which claimed the lives of dozens of Chinese tourists, Gou is also worried about safety.
"The zero-dollar groups means poor service, means unsafe facilities. If you use a good bus, you are safe. But if the bus is very poor, [it can be prone to] accidents. Boats as well, if it's very well equipped, you don't have to worry about safety. Some boats, you pay a small amount of money, your boat is unqualified ... it could result in disasters."
Sudiarto met recently with the Chinese consulate and agrees on the need to tackle the problem together. As he put it: "We don't want Bali to be sold cheap, Bali is already marketable, we don't need to sell it cheap. If we play and trade well, no one will get hurt".
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