Tag: Business

When President Joko “Jokowi” Widodo set out to double Indonesia’s foreign tourist arrivals within the five years of his presidency, many were skeptical. Now, the target seems to be within reach. Combined government efforts that included the massive development of airports and tourist destinations, aggressive digital promotions and a visa-free policy have, along with the weakening rupiah, attracted 16,2 million foreign tourists to Indonesia last year, which is 71 percent more than four years ago.

Still, some setbacks were unavoidable. A series of volcanic eruptions, earthquakes and tsunamis over the past 12 months, as well as the tragic crash of Lion Air flight JT-610 into the Java Sea near Jakarta, resulted in the government missing its target to woo 17 million foreign tourists last year.

Industry players worry that the bad image created by these disasters would take long to erase and thus undermine the country’s ability to attract 20 million foreign tourists this year.

“Indonesia is situated on the Ring of Fire; we could not predict or prevent any disaster. What we need now, is to work extra hard to ensure that the world knows that when disaster strikes here, all tourists and local residents are well cared for,” said Elly Hutabarat, chairwoman of the Indonesian Travel Agent’s Association (Astindo).

She cited Mexico as an example of a country that had just been hit by an earthquake, but still managed to quickly revive its tourism industry.

“We see Mexico, which had just experienced an earthquake, is responsive and is able to give up-to-date information to the world. Such efforts are able to quickly revive their tourism industry,” Elly said.

Border Tourism, Low-Cost Terminals

The government has not given up, as the tourism industry could potentially generate $20 billion in foreign exchange revenue this year, which is crucial to plugging the country’s persistent current-account deficit.

Guntur Sakti, head of communications at the Ministry of Tourism, said the government has implemented a strategy to meet this year’s tourist arrival target by developing border tourism, hub tourism and the renovation of airport terminals to cater to low-cost carriers.

The government’s border tourism plan is aimed at making it easier, faster and cheaper for tourists to visit Indonesia from neighboring countries.

Malaysia, Singapore and the Philippines also have a similar cultural heritage and history as Indonesia.

“The potential from border tourism is massive, especially from neighboring countries,” Guntur said.

Through the hub tourism strategy, the government expects to attract a larger number of foreign tourists that travel to the capitals of neighboring countries, specifically Bangkok, Kuala Lumpur and Singapore.

The government estimates that more than 11 million foreign travelers – excluding Indonesians – transit at Singapore’s Changi Airport annually before continuing their travels to other countries for business or leisure. Guntur said this represents a massive potential for Indonesia.

He added that tourists frequently transit in Singapore or other cities in the region because of limited direct flights to Indonesia from Europe, the United States and even parts of East Asia.

For instance, about half of all Chinese tourists heading to Indonesia must transit in Singapore or Malaysia before reaching the archipelago, while 80 percent of tourists from Thailand and Malaysia are able to reach the country via direct flights.

The government also plans to renovate several terminals at Soekarno-Hatta International Airport outside Jakarta to exclusively accommodate low-cost carriers.

Terminal 1 at the airport will soon only cater to passengers of low-cost airlines traveling to domestic destinations, while Terminal 2 will cater to passengers of low-cost airlines on both domestic and international flights.

Many countries have built terminals or even whole airports to specifically accommodate low-cost airlines. This lowers the airport’s operating budget, which in turn helps to reduce airport taxes and airline ticket prices, which ultimately attract more foreign tourists.

Guntur said at least 70 percent of foreign tourists use low-cost carriers to travel to Indonesia.

“To realize our strategy and attract more tourists, we are working with state-owned airport operator Angkasa Pura to renovate Terminal 1 and 2 at Soekarno-Hatta Airport. We’ve noticed many countries operate several terminals that cater to full-service carriers and low-cost carriers separately,” he added.

The number of passengers traveling to Indonesia on low-cost carriers grows by about 55 percent annually, while the number of passengers arriving on full-service airlines only increases by about 7 percent per year, according to tourism ministry data.

Ten New Balis

The government also actively promoted its “10 New Balis” program last year to develop and promote several destinations beyond Bali, Indonesia’s most popular destination.

The 10 New Balis include Mandalika in Nusa Tenggara, Thousand Islands in Jakarta, Tanjung Lesung in Banten, Tanjung Kelayang in Bangka Belitung, Borobudur Temple in Central Java, the Bromo Tengger Semeru National Park in East Java, Labuan Bajo in East Nusa Tenggara, Wakatobi in Southeast Sulawesi and Morotai in North Maluku.

The project, spearheaded by the tourism ministry, has also established programs to develop each of the destinations by building 5,000 homestays, improving infrastructure, increasing financing for tourism to around Rp 2.5 trillion ($177 million), implementing sustainable tourism in 16 destinations, developing 10 special economic zones and developing nomadic tourism.