Tourism tries to bank on investment momentum

With endless sunshine and thousands of kilometers of pristine white beaches at its disposal, the Tourism and Creative Economy Ministry aimed to attract more investors to develop the tourism sector in Indonesia by showcasing the tropical archipelago’s natural uniqueness during the first Indonesia Tourism Investment Day, held in Jakarta on Monday.

The ministry, in cooperation with the Investment Coordinating Board (BKPM), presented investment opportunities in 88 National Tourism Strategic Areas (KSPN), which included exotic tourism spots such as Wakatobi Islands in Southeast Sulawesi, Raja Ampat Islands in West Papua, Tanjung Puting rainforest in Central Kalimantan, among others.

“Our observation over the last few years concludes that there is a significant increase in investment in our tourism sector, such as the establishment of hotels and restaurants, or the building of infrastructure to improve [the connectivity of] tourism spots,” Tourism and Creative Economy Minister Mari Elka Pangestu told reporters on Monday evening.

By holding the event, the ministry wanted to facilitate the demands of both domestic and foreign investors, who sought more information on how to invest in the country’s budding tourism sector, she added.

Mari predicted that by the end of the year, the number of foreign tourists heading to Indonesia to top 8 million, higher than last year’s figure of 7.6 million. The figure is expected to increase to 9 million next year.

Areas of the tourism sector that had seen a significant influx of investment over the past few years were meetings, incentives, conventions and exhibitions (MICE), she said. “The sector is booming not only in Java, but outside Java as well. Makassar, for example, now has several modern convention centers to accommodate such needs.”

The ministry witnessed three memorandum of understandings (MoU) during the day: PT Banten West Java, Longlife Holding Co, Ltd and Damac Holding Co on the development of resorts in Tanjung Lesung; PT Bali Tourism Development Corporation, PDAM Central Lombok and PLN on the building of water sanitation and electricity facilities in Mandalika; and PT Bali Tourism Development and Novotel Lombok with an accommodation lease agreement.

Total investments in the three projects are estimated at Rp 2 trillion, according to data from the ministry. 

Realized investments in the country’s tourism sector, classified under investment in hotels and restaurants, rose Rp 6.9 trillion (US$208.22 million) in the third quarter, according to BKPM data. The figure is already three times higher than the Rp 2.4 trillion total tourism investments realized throughout 2011.

BKPM chairman M. Chatib Basri said that the soaring investment figure was a reflection of the country’s budding economy and growing purchasing power. The increasing 
middle-class meant more Indonesians would enter the leisure-related sectors in the economy, guaranteeing a bigger market for the country’s tourism industry, he added.

“The economic elasticity of our tourism industry is higher than two, meaning that one percent of an increase in per capita income would boost the sector growth by more than twofold. With the rise of our middle-class, this really is a lucrative sector to be built,” said Chatib.

The BKPM chairman also vowed to exert additional efforts to attract investment in the country’s tourism industry.

“This is an extremely potential sector to be developed. Perhaps BKPM and the Tourism and Creative Industry Ministry should really strengthen our cooperation so that investors invest to Indonesia not only in its manufacture and mining industries, but also in the tourism sector,” he said. (Jakarta Post)