TTG Asia reports that Indonesia’s ambitions for tourism investment in 2023 fell well below stated targets.
TTG’s Tiara Mahawani wrote on 24 January 2024 that while Indonesian tourism arrivals through November 2023 surpassed 8.5 million, direct tourism investment has fallen short of official expectations and remains dominated by domestic direct investment.
Although international arrivals to Indonesia in November 2023 exceeded 10.4 million people – a number that easily surpassed the targeted total of 8.5 million- investment targets remain lackluster, dominated by domestic direct investment.
Indonesia’s Ministry of Tourism tracked US$1.6 billion from January to September 2023. That total was 12% less than the US$1.8 billion total invested in tourism projects in 2022. The 2022 figure included US$1.1 billion in domestic direct investment, while the remaining US$588 million comprised foreign direct investments.
Speaking at the Indonesia Tourism Outlook 2024 Forum in Jakarta, Tourism Minister Sandiaga Uno stated that the Government pledges to be more active in developing investment opportunities. The Minister is confident that steps to facilitate tourism investment in five super-priority destinations and Special Economic Zones will bear results.
Quoted by TTG Asia, Sandiaga said: “Government policies are also made with an investor-centric approach, including our commitment to prioritize tourism development with a sustainable and environmentally-friendly concept, in line with the vision of today’s international investors.’
Indonesia government road shows are planned for 2024. A roadshow was recently conducted in the UAE, where meetings were held with Abdullah Lahej of Ayana Holdings to explore investment opportunities in Indonesia. Other investment roadshows have been undertaken to Singapore, Hong Kong, and India,
Gary Bowerman, a director of Check-in Asia, a tourism intelligence and strategic marketing firm, who also spoke at the Indonesia Tourism Outlook 2024 Forum, said he believed investment flows are slowing down the rate of new investment. He added that potential investors were less interested in injecting funds into Indonesia, as most global investors focus on feasibility studies addressing the country’s inbound market size.
Bowman said many international investors still need to be made aware of the dynamic development of the Indonesian domestic market. Bowerman urged the Indonesian Government to explain and promote this aspect to encourage international investments.
To encourage investment, Bowerman points out that the Government needs to explain its tourism plan, targets, and marketing and branding strategies to reassure international investors.
He added: “Another key point is connectivity. The Government needs to stimulate more flights to connect to destinations, both globally or domestically.”
Hariyadi Sukamdani, chairman of the Indonesian Tourism Board (GIPI), said the Government needs to maintain the investment climate and encourage local investors by optimizing financial institutions, such as the Financial Services Authority and banking sector, to develop funding instruments or create investment financing schemes.
Haryadi emphasized that local investors must not be forgotten. Domestic investors must be given incentives to grow their businesses. “When local investors increase, the domestic market will grow, and international investors will come.”
Related Links
Bali Special Economic Zone – Turtle Island
Role of Special Economic Zones in RI
Prioritized Strategic Projects for Bali
Sanur Beach: A Special Economic Zone
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