The tourism sector is Bali is a major component of its economy by creating employment opportunities and generating local income. It contributes 33% of the island's GDP. Despite the government policy to diversify the economy in various sectors, Bali is vulnerable to changes in tourism. This is seen with events such as the 'Bali Bombings' and the 'Global Financial Crisis; which affected tourism in Bali.
The Bali bombings occurred in two separate incidents in 2002 and 2005. On October 12th 2002 three bombs were detonated using various methods in the popular tourist district of Kuta on the island of Bali. This act of terrorism killed 202 people and injured 240 in the process with 88 of those deaths being Australians. This resulted in the tarnished reputation of Bali as a tropical, island getaway and replaced it with the identity of a dangerous region. This fear and reluctance to venture to the region was also increased due to travel advisory with the Australian, Canadian, American and United Kingdom governments warning its citizens to not travel to Bali or any other part of Indonesia. As a result Bali's rate of tourism decreased by 31%. This view of Bali as a dangerous region though was somewhat reduced over time with the Australian Bureau of Statistics reporting that Bali was fourth place for most popular visited places of 2007, which displays the return of Australian tourists with Bali placing ninth place in the previous year.
The Global Financial Crisis is another event that have repacted tourism in Bali. The market crash resulted in recession in many developed nations and an overall loss of wealth. Despite this the entire country of Indonesia recorded an increase from 5,505,759 in 2007 prior to the GFC to 6,425,259 in 2009. This increase has also been displayed in Bali which has had an 18.49% increase in tourism in 2009 alone. As seen in the above graph there has been a growth in tourist numbers from all nations listed with the exception of Japan, South Korea and Malaysia. Most significantly is the 68.93% from 2009-10 from Australian tourist arrivals to Bali. This may be due to numerous factors including that Australia did not suffer to the extent that other developed nations had due to the financial crisis thus enabling us to continue to travel abroad. In addition to this it may be that due to the threat of a recession or decreased wealth Australian's opted for Bali as it was a cheaper, closer option rather than other developed nations especially since the value of the rupiah decreased.
