Tourism to Indonesia has a lot more than doubled in the last decade, with almost ten million international tourists going to the country this past year. The last year also has seen a major increase in tourism from Australia, perhaps partly as a result of decision to waive visa entry fees in March 2016. An absolute of 105,754 Australian tourists travelled to I Am Indonesia in August 2016, 49 % more than August 2015. The Indonesian Government is aiming to double the number of international tourists seeing the country by 2019. As Tourism Minister Arief Yahya notes, the tourism sector has been acknowledged through the Indonesian Government as a central portion of the country’s economic growth strategy, which aims to boost the sector’s contribution to GDP to eight percent by 2019. Consequently, the budget for tourism and promotional programmes has skyrocketed from 300 billion rupiah ($30 million) in 2014 to 2.6 trillion rupiah ($263 million) in this year’s budget.
While Indonesia’s tourism sector is growing, it remains confined to a number of popular destinations. Statistically from BPS-Statistics Indonesia, in 2014, 78 per cent of tourists stayed in hotels in Bali, Jakarta as well as the Riau Islands, which together comprise just .9% of Indonesia’s total land mass. To expand tourism beyond these areas, the Widodo Government has pledged to build up ten new holiday destinations across the country. To aid achieve that, $1.1 billion has been invested in tourism in the first six months time on this year. Unlike the government’s plan, however, the majority of that investment traveled to Bali and Jakarta.
The principal challenge in expanding the tourism industry is attracting investment in areas apart from Bali and Jakarta. For investors to formulate several of the more remote islands of Indonesia, the government needs have position the infrastructure into position to support the tourism industry. So far, the Indonesian Government has assigned thirty priority infrastructure projects to the period 2016-19, which will require investments of about $500 billion. To accommodate that, the us government has put an elevated focus on infrastructure in the state budget, allocating $34 billion towards infrastructure from the 2017 draft budget, a rise of 17 percent on the 2016 budget. Despite having the excess funding, however, the us government can only meet thirty percent from the funding required for the thirty projects. Developing the infrastructure to bring in and support investment in prospective tourist destinations, therefore, is only able to be accomplished through additional investment. With signs that foreign investment in Indonesia is slowing, and also the deficiency of government tourism funding for areas besides Bali and Jakarta, it appears to be unlikely at this time that this Widodo Administration will achieve the arrange for developing ten new holiday destinations by 2019.
Looking at the long term, security concerns from terrorism in the area could pose challenges to Indonesia’s tourism industry. Using the 2002 Bali bombing, tourism numbers plummeted by 57 percent, leaving around 2.7 million tourism workers unemployed. Even though effects were short-lived, the bombings still had dexjpky39 significant impact on the market. While the appearance of terrorist attacks targeting Westerners in Indonesia remains low, the growing variety of tourists opting to visit such popular hotspots as Jakarta and Bali might make those areas an ideal target for terrorist groups. This is especially an issue considering the general boost in extremist groups in South-East Asia and which, in accordance with Singaporean Defence Minister Dr Ng Eng Hen, tend to be more organised, more networked and get clearer aims under the influence of the so-called Islamic State, that was behind the January 2016 attack in Jakarta. Although that incident did not have any significant impact on tourism in Indonesia, more frequent attacks could. Concurrently, though, it might work as a motivation to get more visitors to new destinations all over the archipelago.