The tourism industry is an important part of Indonesia’s economy, contributing over two percent of its gross domestic product. The importance of international tourism in its regions, however, varied greatly, with the island of Bali being arguably Indonesia’s most popular tourist destination. Prior to 2020, tourism in Indonesia was experiencing steady growth, spurred by increasing numbers of foreign visitors. However, the outbreak of the COVID-19 pandemic in 2020 showed how precarious it was for an economy to be so heavily geared towards international tourism.
By developing and marketing more tourist destinations to international visitors, the Indonesian government had hoped to use this industry to further spur economic growth. Tourism provided Indonesia with valuable foreign exchange inflows, in the form of international tourism receipts , as well as investments and capital in tourism-related businesses. For the local economy, tourism usually brought infrastructure improvements, as well as creating jobs. In the past decade, employment in Indonesia’s tourism sector had been steadily increasing.
On the other hand, the Indonesian government had been heavily promoting domestic tourism to boost the industry. Although the number of domestic trips made in Indonesia far surpasses that of international visitors, domestic tourists spend on average around just half of what international visitors to Indonesia spend. Thus, the uptake in domestic tourism could not adequately compensate for the losses incurred from the decrease in international tourists. For the industry to bounce back to pre-pandemic levels, the safety of international travel must be guaranteed. With the rising number of people who got COVID-19 vaccinations worldwide, including in Indonesia, it is hoped that the tourism sector would continue to experience growth and recovery.
Indonesia as a global tourism destination
Indonesia is a vast archipelago and offers tourists a wide range of attractions and activities, from romantic beach holidays, wellness tourism, culture, to adventure and sports, including some of the best dive spots in the world such as Raja Ampat. In 2021, the Indonesian Tourism and Creative Economy Ministry had singled out five ‘super-priority’ destinations to promote: Lake Toba in Sumatra, Borobudur in Java, Labuan Bajo in East Nusa Tenggara, Mandalika in West Nusa Tenggara, and Likupang in North Sulawesi. A budget of 351.6 billion Indonesian rupiah was allocated in 2022 to develop these destinations further.By developing and marketing more tourist destinations to international visitors, the Indonesian government had hoped to use this industry to further spur economic growth. Tourism provided Indonesia with valuable foreign exchange inflows, in the form of international tourism receipts , as well as investments and capital in tourism-related businesses. For the local economy, tourism usually brought infrastructure improvements, as well as creating jobs. In the past decade, employment in Indonesia’s tourism sector had been steadily increasing.
Indonesian tourism: on the road to recovery
The outbreak of the COVID-19 pandemic, however, put the brakes on the growth of international tourism. Numerous countries worldwide started introducing travel restrictions in early 2020, leading to an almost overnight stop in international travel. The decrease in international tourists led to negative quarterly growth of tourism receipts in Indonesia, with the island of Bali being particularly hard hit. Foreign tourist arrival numbers to Bali decreased by 100 percent, affecting the island's hospitality, food and beverage, and cultural sectors the hardest. To revive the island's economy, in October 2021, the Indonesian government has reopened Bali for international tourists. Starting in April 2022, international tourists visiting Bali, Batam, and Bintan Islands will no longer be required to undergo quarantine. However, just like all arrivals from overseas, international tourists also have to be fully vaccinated upon their arrival and tested negative. Many hope that this would improve the situation significantly.On the other hand, the Indonesian government had been heavily promoting domestic tourism to boost the industry. Although the number of domestic trips made in Indonesia far surpasses that of international visitors, domestic tourists spend on average around just half of what international visitors to Indonesia spend. Thus, the uptake in domestic tourism could not adequately compensate for the losses incurred from the decrease in international tourists. For the industry to bounce back to pre-pandemic levels, the safety of international travel must be guaranteed. With the rising number of people who got COVID-19 vaccinations worldwide, including in Indonesia, it is hoped that the tourism sector would continue to experience growth and recovery.
