Tourism in Indonesia is an important component of the Indonesian economy as well as a significant source of its foreign exchange revenues. Indonesia was ranked at 20th in the world tourist Industry in 2017, also ranked as the ninth-fastest growing tourist sector in the world, the third-fastest growing in Asia and fastest-growing in Southeast Asia. In 2018, Denpasar, Jakarta and Batam are among of 10 cities in the world with fastest growth in tourism, 32.7, 29.2 and 23.3 percent respectively. The tourism sector ranked as the 4th largest among goods and services export sectors.
On 2019, Indonesia recorded 16.10 million foreign tourist arrivals, seeing a 1.9% per cent increase than that of 2018. In 2015, 9.73 million international visitors entered Indonesia, staying in hotels for an average of 7.5 nights and spending an average of US$1,142 per person during their visit, or US$152.22 per person per day. Singapore, Malaysia, China, Australia, and Japan are the top five sources of visitors to Indonesia.
The Travel and Tourism Competitiveness Report 2019 ranks Indonesia 40th out of 140 countries overall with Travel and Tourism Competitiveness Index score of 4.3. It is a two steps improvement from Indonesia’s 2017 position of 42nd out of 136 countries overall with index score of 4.2. The 2015 report ranks the price competitiveness of Indonesia’s tourism sector the 3rd out of 141 countries. It mentions that Indonesia has quite good travel and tourism policy and enabling conditions (ranked 9th). The country also scores quite good on natural and cultural resources (ranked 17th). However, the country scored rather low in infrastructure sub-index (ranked 75th), as some aspects of tourist service infrastructure are underdeveloped.
In 2016, the government was reported to be investing more in tourism development by attracting more foreign investors. The government has given priority to 10 destinations as follows: Borobudur, Central Java; Mandalika, West Nusa Tenggara; Labuan Bajo, East Nusa Tenggara; Bromo-Tengger-Semeru, East Java; Thousand Islands, Jakarta; Lake Toba, North Sumatra; Wakatobi, Southeast Sulawesi; Tanjung Lesung, Banten; Morotai, North Maluku; and Tanjung Kelayang, Bangka Belitung Islands. As quoted in The Jakarta Post, the government is aiming for 275 million trips by domestic tourists by end of 2019. The government has also secured commitments from potential investors, totalling US$70 million in the areas of building accommodation, marina and ecotourism facilities in 3 of the 10 areas. Indonesia is ranked at seventh place in the list of Lonely Planet‘s top 10 countries to visit in 2019. The country ranks fourth out of the top 25 destinations in the world in 2018 by travel site TripAdvisor
Both nature and culture are major components of Indonesian tourism. The natural heritage can boast a unique combination of a tropical climate, a vast archipelago of 17,508 islands, 6,000 of them being inhabited, the second longest shoreline in the world (54,716 km) after Canada. It is the world’s largest and most populous country situated only on islands. The beaches in Bali, diving sites in Bunaken, Mount Bromo in East Java, Lake Toba and various national parks in Sumatra are just a few examples of popular scenic destinations. These natural attractions are complemented by a rich cultural heritage that reflects Indonesia’s dynamic history and ethnic diversity. One fact that exemplifies this richness is that 719 living languages are used across the archipelago. The ancient Prambanan and Borobudur temples, Toraja, Yogyakarta, Minangkabau, and of course Bali, with its many Hindu festivities, are some of the popular destinations for cultural tourism.
Indonesia is a member of PATA and was the host of its annual conference in 1963 and 1974 in Jakarta, and in 2003 in Bali. Indonesia also was the host of PATA Travel Mart in 1985 and 1989 in Bali, and 2016 in Jakarta.
Tourism in Indonesia is currently overseen by the Indonesian Ministry of Tourism. International tourism campaigns have been focusing largely on its tropical destinations with white sand beaches, blue sky, and cultural attractions. Beach resorts and hotels have been developed in some popular tourist destinations, especially Bali island as the primary destination. At the same time, the integration of cultural affairs and tourism under the scope of the same ministry shows that cultural tourism is considered an integral part of Indonesia’s tourism industry, and conversely, that tourism is used to promote and preserve the cultural heritage.
Some of the challenges Indonesia’s tourism industry has to face include the development of infrastructure to support tourism across the sprawling archipelago, incursions of the industry into local traditions (adat), and the impact of tourism development on the life of local people. The tourism industry in Indonesia has also faced setbacks due to problems related to security. Since 2002, warnings have been issued by some countries over terrorist threats and ethnic as well as religious conflicts in some areas, significantly reducing the number of foreign visitors for a few years. However, the number of international tourists has bounced back positively since 2007, and reached a new record in 2008 and kept rising since then.
The 2019 Travel and Tourism Competitiveness Report ranks Indonesia 40th out of 140 countries overall with a score of 4.3. It lists the price competitiveness of Indonesia’s tourism sector the sixth out of 140 countries. The report states that Indonesia scores well on visa policy (#3) and international openness (#16), as well as on natural (#17) and cultural resources (#24). However, Indonesia has a low score in infrastructure (#98), as some aspects of tourist service infrastructure are underdeveloped. Other aspects that need to be improved include health and hygiene, environmental sustainability, and affinity for travel and tourism.