Tourism to Indonesia has greater than doubled over the past decade, with almost ten million international tourists going to the country just last year. Days gone by year has also seen a serious increase in tourism from Australia, perhaps partly due to decision to waive visa entry fees in March 2016. An overall of 105,754 Australian tourists travelled to I Am Indonesia in August 2016, 49 percent more than August 2015. The Indonesian Government is hoping to double the quantity of international tourists visiting the country by 2019. As Tourism Minister Arief Yahya notes, the tourism sector has been acknowledged by the Indonesian Government like a central part of the country’s economic growth strategy, which aims to increase the sector’s contribution to GDP to eight % 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) within this year’s budget.
While Indonesia’s tourism marketplace is growing, it remains limited to a few popular destinations. According to statistics from BPS-Statistics Indonesia, in 2014, 78 per cent of tourists stayed in hotels in Bali, Jakarta along with the Riau Islands, which together constitute just .9% of Indonesia’s total land mass. To expand tourism away from these areas, the Widodo Government has pledged to produce ten new holiday destinations across the nation. To aid reach that, $1.1 billion continues to be invested in tourism inside the first six months time of the year. In contrast to the government’s plan, however, the vast majority of that investment went to Bali and Jakarta.
The key challenge in expanding the tourism market is attracting investment in areas other than Bali and Jakarta. For investors to produce a number of the more remote islands of Indonesia, the federal government needs have place the infrastructure into position to assist the tourism industry. Up to now, the Indonesian Government has assigned thirty priority infrastructure projects for your period 2016-19, which can require investments close to $500 billion. To allow for that, government entities has put an increased give attention to infrastructure in the state budget, allocating $34 billion towards infrastructure from the 2017 draft budget, an increase of 17 % on the 2016 budget. In spite of the extra funding, however, the federal government can only meet thirty per cent in the funding needed for the thirty projects. Developing the infrastructure to draw in and support investment in prospective attractions, therefore, can only be accomplished through additional investment. With signs that foreign investment in Indonesia is slowing, plus the deficiency of government tourism funding for areas besides Bali and Jakarta, it appears unlikely at this time the Widodo Administration will achieve the prepare for developing ten new attractions by 2019.
Checking out the longer term, security concerns from terrorism in the region could pose challenges to Indonesia’s tourism industry. After the 2002 Bali bombing, tourism numbers plummeted by 57 percent, leaving around 2.7 million tourism workers unemployed. Although the effects were short-lived, the bombings still had dexjpky39 significant impact on the market. While the occurrence of terrorist attacks targeting Westerners in Indonesia remains low, the growing number of tourists deciding to visit such popular hotspots as Jakarta and Bali could make those areas a perfect target for terrorist groups. This is especially a concern because of the general boost in extremist groups in South-East Asia and which, in accordance with Singaporean Defence Minister Dr Ng Eng Hen, are definitely more organised, more networked and also have clearer aims intoxicated by the so-called Islamic State, which had been behind the January 2016 attack in Jakarta. While that incident was without any significant impact on tourism in Indonesia, more frequent attacks could. Concurrently, though, it could possibly function as a reason to draw in more visitors to new destinations over the archipelago.