Indonesia ramps up investment into its tourism industry, with the aim to make it a pillar of the economy
Bali is to Indonesia what Goa is to India, Paris is to France and Las Vegas is to the USA. Bali had always absorbed a huge chunk of total foreign tourists in Indonesia until 2019, making it a key driver of Indonesia’s large tourism economy. It is no surprise that Indonesia is looking to replicate Bali’s success even as tourism picks up to pre-pandemic levels with its new “10 new Bali’s initiative”.
The “10 New Balis” project to be set up across different parts of Indonesia has caught the fancy of organizations outside the country. Qatar Investment Authority in September 2022 announced that it would invest more than US$500 million in this project. Organizations from Australia, Singapore and Hong Kong are amongst the other investors as the project requires a total funding of more than US$20Billion.
Tourism is one of the priority sectors for the Indonesian government. Indonesia’s tourism minister had set an aim of welcoming 1.5 million overseas tourists to the country in 2022 indicating that the government intends to focus on tourism in the coming decade. Undoubtedly, the “10 New Balis” project will only contribute to Indonesia’s long-term economic growth and development and will certainly have a transformative impact on local service-led communities.
In May 2022, the Tourism and Creative Economy Minister Sandiaga Uno announced that Indonesia ranked 32nd in the Travel and Tourism Competitiveness Index (TTCI) among the 117 countries that participated in 2021. The country had improved by 12 places despite facing major losses during the COVID-19 pandemic. This indicates that Indonesia is still a sought-after destination for tourists.
Post pandemic, the government set milestones keeping in mind the necessary protocols for foreign travel and tourism. The “10 New Balis” project resumed in 2021 and is expected to be completed by 2026. The project is being implemented in phases with priority destinations – Lake Toba in North Sumatra, Borobudur in Central Java, Labuan Bajo in East Nusa Tenggara, Mandalika in West Nusa Tenggara-being the focal points of development.
Source: Statista
Putting words to numbers, the tourism and hotel revenue in Indonesia is expected to more than double from 2021 to 2026, with an accelerated CAGR of 12.59%. Up to 169 countries enjoy visa free travel to the nation since 2016. And with these new destinations, the country estimated to increase its foreign tourist arrivals to 20 million from a peak of 7 million tourists pre-pandemic. Currently, tourist footfalls are mainly from Singapore, Malaysia, China, Australia and Japan and with the recent relaxations to entry restrictions, Indonesia is expected to find favour from other countries as well.
Not just “10 New Balis”, tourism development in Indonesia has also included concepts such as SEZ tourism, health tourism, rural tourism and cultural heritage tourism spread across different parts of the country. Indonesia is also eyeing a Bali rebirth. It is developing the Sanur region in Bali Province as a Special Economic Zone for medical tourism. One can safely assume that Indonesia is gearing up for largescale infrastructure development at least for the next two decades.
The world’s largest archipelago, Indonesia consists of over 17000 islands making it an attractive destination for tourists. Its rice terraces, historical architecture and a mix of sea and tropical rainforests define its landscape and make it a catnip for tourists across the world. Over the next few decades, Indonesia can provide a niche experience for tourists looking for an immersive holiday.
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