Between 1997 and 2005, Indonesia was buffeted by a series of crises that had a devastating impact on one of its prime economic assets: tourism. An environmental crisis linked to the smoke and haze from the unregulated fires of large land owners in Sumatra and Kalimantan in 1997 closed airports in Sumatra and Kalimantan, and disrupted flights and sea traffic from Java to these destinations for several months. Beginning in mid 1997 and crescendoing in 1998, the Asian financial crisis wiped out banks, airlines, real estate projects, and an array of half-built or newly completed tourist-related projects throughout Indonesia. The decaying shell of a partially constructed Westin Hotel on Jakarta's main highway and adjacent to the famous Hotel Indonesia offers a continuing visual reminder of how the collapse of the capital markets impacted the tourism sector that seemed to offer limitless possibilities. Worse still, the Indonesian flag carrier airline, Garuda Indonesia, recorded a 90.3% drop in profit in 2000 owing to rising operating costs and, more importantly, huge foreign exchange losses (Agence France Press 21 May 2001). © 2007 Springer-Verlag New York.
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