Tourism Industry: How Can Indonesia Tap Its Tourism Potential? Challenges & Opportunities
At the 50th anniversary of the Indonesian Hotels and Restaurants Association in mid-February 2019, Indonesian President Joko Widodo emphasized that the tourism industry should become the biggest industry in Indonesia in terms of foreign exchange earnings. Indonesia – a huge Archipelago that consists of more than 17.000 islands – has so much to offer to (foreign) tourists, such as beautiful beaches and countryside, flora & fauna, diving spots, wildlife, culture, culinary, historic relics as well as vibrant city life. However, so far, it fails to tap its full potential.
This 35-page analysis of Indonesia's tourism industry, which is available in our February 2019 report, focuses on the following subjects:
• In many international rankings - such as the Most Beautiful Countries in the World Index or the Global Muslim Travel Index - Indonesia is ranked highly. It means that the international community acknowledges Indonesia's beauty. However, despite such great (free) publicity, Indonesia continues to lag behind its regional counterparts in terms of foreign tourist arrivals (specifically trailing behind Thailand, Malaysia and Singapore... and possibly soon behind Vietnam). The article first puts Indonesia in regional perspective by comparing foreign tourist arrivals in several Southeast Asian nations (with some help from the latest Travel and Tourism Competitiveness report).
• Secondly, we focus on recent government efforts and strategies that aim at attracting more foreign tourist arrivals in Indonesia, including infrastructure development, the visa-free visit entry for many nations, and specifically the "Ten New Balis" program.
• Within the "Ten New Balis" program there are four so-called "Super Priority Destinations", namely: Toba Lake (North Sumatra), Borobudur (Central Java), Mandalika (Flores), and Labuan Bajo (Flores). We discuss the tourism potential of each of these four regions, and also zoom in on the challenges that are encountered in these planned new growth centers.
• The Indonesian government wants to develop "new Balis" (replicating the success of this island that managed to welcome more than six million foreign visitor arrivals in 2018). However, in the article we discuss whether it is realistic to copy-paste this success. Therefore, we first analyze what Bali's strengths actually are (in other words, why does Bali attract so many tourists) and then discuss if these Bali-specific strengths can be found in other regions in Indonesia.
• Sudden sharply rising investment in a previously less developed tourist area (implying there is a sudden influx of investors, workers and, later, tourists in the region) could actually give rise to social tensions among the 'native population'. It is therefore important for locals (in the targeted areas) to participate in these development programs.
• The organization of events as well as general marketing and promotion are great tools to attract new tourists into Indonesia. The Joko Widodo administration has done some great work in terms of marketing or branding Indonesia overseas. We provide some examples as well as our thoughts regarding specific target audiences to make promotional and marketing campaigns more effective.
• In the years ahead halal tourism is expected to grow markedly, and Indonesia has the perfect 'internal make-up' to become a great destination in terms of halal tourism.
Read the full article in the February 2019 edition of our monthly research report. You can purchase the report by sending an email to info@indonesia-investments.com or a WhatsApp message to the following number: +62(0)8788.410.6944
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At the end of 2019 the Indonesian rupiah exchange rate will be closest to ....
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