Monday, December 24, 2012

Indonesia's Tourism Industry Gaining Speed

Finding flights and accommodations to Bali, Indonesia’s biggest resort area, might be difficult this time of year, highlighting the country as a destination of choice among foreigners. 

Indonesia is well on its way to meet its target to host 8 million international tourists this year, said Mari Elka Pangestu, the Minister of Tourism and Creative Economy, last week. 

“It must be highlighted that until October, the amount of international tourists [visiting Indonesia] was increasing by 5 percent, which is higher than the estimated average growth globally, which is around 3 to 4 percent this year,” she said. 

Indonesia secured at least $9 billion in foreign exchange revenue from tourists arriving in the country, a 6 percent increase from last year’s $8.5 billion, she added. 

The average spending of international tourists in Indonesia was $1,133.81 in the January-October period, a slight increase from $1,118.26 in 2011, while the length of stay dropped to an average 7.7 days per visit from 7.84 days, Mari said in her year-end statement. 

“This is because there is an increase of visits from regional tourists because of an economic slowdown in Europe,” she added. 

Indonesia expects domestic tourism this year to generate Rp 171.5 trillion ($18 billion) in revenue, which would be up 9.3 percent from last year. 

She estimated that there will be 245 million trips for all of this year, up 3.8 percent from last year’s 236 million trips. 

Domestic tourists spent an average of Rp 700,000 per trip so far this year, up 5.6 percent from Rp 662,680 a year earlier. 

This is in line with the rise of Indonesia’s middle class, and the increased purchasing power that comes with it. 

Investors are feeling bullish on the prospect of the tourism industry in Indonesia. 

In the first nine months, the country took in $729.7 in direct foreign investment for hotels and restaurants, which shows close to a threefold increase from last year $242.2 million. 

While domestic investors poured $86.1 million into the industry, up from $39.4 million. 

The ministry predicts a significant increase of international tourists next year, partly because Indonesia will host several world-class events, including the Asia Pacific Economic Cooperation summit, the Ministerial Meeting of the World Trade Organization, and the Miss World Pageant. 

All of the three events will be organized in Bali. 

“We have set an optimistic target of 9 million international tourists next year,” Mari said. “This target is a stepping stone for achieving visits of 10 million tourists in 2014.” 

The ministry has divided the country’s tourism destinations into seven categories: sports tourism, like diving an d golf; eco-tourism; cruise ship tourism; spa and medical tourism; culture and heritage tourism; culinary and shopping tourism; and tourism from MICE, or meeting, incentives, conferences and events. 

The ministry incorporated the word “creative economy” when Mari was reassigned as its minister from the trade ministry last year. 

Mari has repeatedly claimed that Indonesia’s creative industry contributed around 6 percent to 7 percent to gross domestic product. 

Indonesia’s creative economy exports, she said, reached $10 billion a year and have the opportunity to keep growing. The creative economy also opened up jobs, employing more than 11 million Indonesians and accounting for 7 percent of job creation in the country. 

Companies from abroad are also converging in Jakarta to do business in Indonesia, filling up hotels and taking prime office space that approaches full occupancy. (Jakarta Globe)

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