Devalued Rupiah: The Path to More Arrivals?

The Indonesian Rupiah’s exchange rate against the United States Dollar (US$) continues to weaken. This has been happening for over a month, and the Rupiah’s exchange rate has now exceeded Rp. 16,000 per U.S. dollar. 

As Kompas.com reports, the declining value of the Rupiah against the U.S. Dollar will make Indonesia a “travel bargain” for people from countries with currencies linked to the value of the U.S. Dollar or with currencies stronger than the Indonesian Rupiah. 

Indonesian Rupiah

Indonesia’s Minister of Tourism and the Creative Economy, Sandiaga Uno, is proactively seeking to increase tourist numbers by exploiting the situation surrounding the weakened Rupiah. His strategic initiatives aim to mitigate the potential negative impacts and maximize the benefits for Indonesia’s tourism and creative economy sectors. 

Sandiaga argues that the devaluation of the Rupiah presents unique challenges to the tourism and creative economy sectors. The strengthening of the U.S. dollar against the Rupiah will increase the costs of many economic components of tourism, such as transportation. Sandiaga says the short—to mid-term goal for Indonesian tourism is to increase the number of foreign flights, specifically focusing on Australia, India, and Russia.

In Australia’s case, while many flights operate between Indonesia and Australia, Indonesia now seeks to increase flight frequencies and new destinations in both countries. The potential for tourism growth between Indonesia and Australia is significant, as seen in data collected by the Central Statistics Agency (BPS) showing Australia as the second largest source of tourists to Indonesia in March 2024, contributing 11.92% of all arrivals. 

In addition to a desire to see more flights from Australia, Russia, and India – Sandiaga said Indonesia also wants more flight connections with the Middle East and North Asia.

Current plans also include adding more flights from the Middle East via Dubai, Doha, and Istanbul. Meanwhile, flights from North Asia were being added via Tokyo, Seoul, and Hong Kong. “We will be able to increase the number of tourists and ensure that the tourists are of high quality.

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