International visitor numbers to Indonesia grew three times higher than regional and global growth in 2017
While ASEAN’s growth was 7% in 2017, Indonesia’s growth was 22%. We asked Arief Yahya, Minister of Tourism of Indonesia to tell us more about how tourism has developed in the country.
The number of foreign tourist arrival to Indonesia in 2017 reached 14.04 million visitors. This is the result of various efforts by Ministry of Tourism to promote Wonderful Indonesia branding in our main target markets countries, such as China, Singapore, Malaysia, Australia, Japan, India, South Korea, and other markets like European countries. Additionally, according to Travel and Tourism Competitiveness Index report 2017 by World Economic Forum, Indonesia’s rank has improved significantly, moving up from 50th rank in 2015 to 42nd rank in 2017.
During 2017, Wonderful Indonesia branding successfully won 27 awards at various events in 13 countries. And up to September 2018, Indonesia has received 31 awards at various events in nine countries.
WE WILL PROVIDE INCENTIVES FOR AIRLINES WHO WANT TO OPEN NEW ROUTES TO INDONESIA
How important is tourism as part of your economy and what are the projections? Tourism has been declared as the leading sector under the presidency of Joko Widodo. As a result, tourism development in the country has the full commitment and support from other related ministries. As one of the key sectors to Indonesia’s economy, it has contributed to foreign exchange around US$15 bn in 2017 and employment of 12 million in that year. The Ministry of Tourism is very optimistic on the growth of Indonesia’s tourism and it is projected to be the biggest foreign exchange earner in 2019 with around US$20 bn. Indonesia is also committed to make tourism as the best in the region. Not only that, the Ministry has been targeted to reach 20 million foreign tourists by 2019. In order to achieve those targets, the Ministry of Tourism has prepared three ultimate weapons: providing incentives for airlines, hot deals programs, and a competing destination model (CDM). The Ministry of Tourism will provide incentive for airlines from around the world who want to open new routes to Indonesia, for example giving subsidy for each passenger or joint promotions. For hot deals programs, we are looking at selling excess capacity and give customers big discounts of those excess capacity. CDM is a new method of marketing by combining machine learning ability, big data analysis, and implementing precise contextual advertising on targeted potential tourists.
WE HAVE 10 TOURISM PRIORITY DESTINATIONS – KNOWN AS ‘10 NEW BALI’
What are the priority destinations for Indonesia?
The Ministry of Tourism has set 10 Tourism Priority Destinations – known as 10 New Bali – Lake Toba, Cape Kelayang, Mandalika, Wakatobi, Morotai Island, Kepulauan Seribu and Jakarta Old Town, Cape Lesung, Borobudur and Bromo Tengger Semeru. The aims for this strategy are to boost and spread out foreign visitors to other potential tourist destinations in Indonesia beyond Bali, and to distribute the economic benefit of tourism further to other areas across the country. Moreover, the development of 10 New Bali is expected to attract foreign investment to tourism sector by improving ease of doing business in those regions.
The main focus of the Ministry of Tourism is developing attractions, accessibility, and amenities, as well as promoting investment in 10 New Bali.
What investments is Indonesia making at this time in its tourism infrastructure? The achievement of investment in Indonesia’s tourism sector in 2017 reached US$1.8 bn, grew by 32% 2016, when investment reached US$1.4 bn. The development of 10 New Bali and National Tourism Strategic Area needs investment for about IDR500 tn in total, or more than US$30 bn. It consists of both government investment and private investment. For the period of 2019 until 2024, tourism in Indonesia mainly needs investment for 120,000 hotel rooms, 15,000 restaurants, 100 theme parks, 100 diving operators, 100 marinas, 100 special economic areas and other tourism amenities.
INDONESIA IS THE COMPLETE DESTINATION
What are the main USPs of Indonesia when it comes to tourism?
When it comes to tourism, Indonesia is considered to be a complete destination, we have everything! Indonesia is suitable for different tourist interests, we have nature, culture and heritage, cuisine – and affordable prices. However, there are two main unique selling propositions for Indonesia, which are nature (white sandy beaches spreading throughout the country, active volcanoes in Java, sublime diving in Raja Ampat, West Papua) and cultural heritage (wide variety of traditional experiences from 300 ethnic groups, home for Buddhist and Hindus temple/shrines).
These USPs have also been acknowledged by the Travel and Tourism Competitiveness Index report from World Economic Forum in 2017, which ranked Indonesia in the 16th position for natural and cultural resources among all the countries in the world. For price competitiveness, we are in fifth position, so for the same amount of dollars, you can get more stuff in Indonesia.
At ITB Asia, the first Muslim Travel Pavilion will appear. How is Muslim travel evolving?
In conjunction with the increased interest in Halal tourism, we are observing a trend that the spending power of middle income families around the world is increasing, which allows more Muslims to travel for leisure – beyond Hajj and Umrah trips – hence the growing demand of Muslim Travel or halal tourism.
Muslim travellers are starting to have higher expectations while traveling; beyond basic sight- seeing and shopping packages, Muslim travelers now expect their needs to be met while partaking in trips ranging from adventure travel to beach holidays as well as in immersive experiences. Non-Muslim countries, such as Thailand, Japan and Korea are starting to target the Muslim travel segment and are developing products tailored to the needs of Muslim travellers. Globally there are travel companies leading the way in Halal tourism by offering unique experiences to Muslim travelers. Domestically, Indonesians are traveling more to explore their country and expect their faith basic needs to be met. To motivate destinations within Indonesia to focus on halal tourism, we launched a series of awards. We have succeeded in creating a healthy sense of competitiveness among destinations. These internal competitions propelled Indonesia to win a series of awards including the World’s Best Halal Tourism Destination and the World’s Best Halal Honeymoon destination for Lombok, the World’s Best Halal Destination for West Sumatera, the World’s Best Halal Culinary Destination for Padang, West Sumatera, and the World’s Best Halal Cultural Destination for Aceh.
In terms of regulation we have established a Halal standard for the hospitality and food and beverage sectors, and are working on educating the industry on the importance of becoming Halal certified. Being a Muslim majority country where Halal food and Muslim-friendly facilities such as masallahs and ablution facilities are widely available, it is sometimes difficult to convince the industry of the importance of becoming Halal certified. However, we repeatedly communicate that Muslim tourists from certain destinations require the assurance of Halal certification and that becoming certified makes it easier to sell their products and services. We regularly hold informational seminars and technical workshops to educate industry players on the importance of certification and how to become certified.
With the recent tragedies in Indonesia, how will the tourism market recover?
After a tragedy happens, our first main focus is rehabilitating the people, for example by giving trauma healing to the local community and the industry. Then, we focus on rehabilitating the destination, mainly on their attraction, access, and amenity. We cannot do it on our own, we need collaboration with other ministries and stakeholders, such as Ministry of Transportation or Ministry of Public Works. Then we conduct promotion for the unaffected areas in nearby regions, to show that the tourism activities are recovering and going back to normal. Our promotion strategies will include branding, advertising and selling, both inside the country and abroad.
Photo: “Arief Yahya – Minister of Tourism of Indonesia”