Bali lessons for investors

An opportunity to build Bali’s first marine tourism operation led Richard Chandler and three business partners to establish Bali Hai Cruises in 1990 and there is no doubt the business, like most associated with the Indonesian island, has been presented with some challenges over the years.

The business partners commissioned a 36-metre catamaran from Austal ships after returning from Bali, keen to make the most of the opportunity and, before long, thanks to quick growth, Bali Hai Cruises built a second catamaran of equal size.

According to Mr Chandler, Bali Hai’s blend of Western and Balinese ways is one of the important elements that aided its success.

“We try and combine Western efficiency with Balinese hospitality. The top management has been Western and the people tourists see are the smiling Balinese,” he says.

“The growth was quite exciting, and then we ran into a series of incidents that put a kybosh on that,” Mr Chandler says.

“We have had political unrest, there was a cholera scare, the Asian meltdown and there has been a whole raft of things of course culminating in the disastrous Bali bomb, followed by a second one.”

With two 300-seater catamarans, Mr Chandler says Bali Hai had too much capacity after a sag in Bali tourism thanks to a cholera scare in the Japanese market.

The business made the decision to tap into the Middle East market and sent one of the ships to Dubai.

Two years after making that move and when the Middle East business was going well, the September 11, 2001, attacks in the US occurred, which had immediate impacts for the Dubai operation.

“We had Dubai, which had only been there a couple of years, going backwards, and we had Bali that was suffering badly. We took the decision, rightly or wrongly, to stay with Bali and get rid of the Dubai operation,” Mr Chandler says.

By far though, the biggest impact in the business’ history was the tragic Bali bombings; the first in 2002 and the second in 2005.

What is referred to in the industry as the MICE market – meetings, incentives, conventions and events – was immediately affected by the disaster. The Bali tourism industry fell into a period of uncertainty.

“We survived all of that, we have carried just on two million people on our various cruises, we have expanded the product by adding accommodation at our beach club facility and we employ close on 300 people,” Mr Chandler says.

For Bali Hai, ensuring the utilisation of the vessels it has invested in has been the key to ensuring its longevity; its catamaran is used for a day and night cruise, as is the sailing catamaran, Aristocat.

After 21 years, Bali Hai has established strong relationships with wholesale tourism companies around the world.

“We package through people like Qantas Holidays, Flight Centre, Creative Holidays, all the Australian wholesalers and European Holidays,” Mr Chandler says.

Instilling confidence in tourists by having insurance with reputable companies and high security standards has been vital to Bali Hai’s success.

“That is what Japanese and European travellers are looking for; you have got to have the right cover,” he says.