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Indonesia's tourism sector is still under-invested: Sandiaga

Jakarta Globe - June 5, 2024

Jayanty Nada Shofa, Jakarta – Indonesia's tourism industry is in dire need of investment in its supporting infrastructures as investors today mainly favor putting their money in hotels and restaurants, according to Tourism Minister Sandiaga Uno.

Government data shows Indonesia's tourism and creative economy sectors attracted around $3.6 billion in investments throughout 2023. This is far beyond the $2.6 billion tourism investment target that the archipelagic country had set that year. About $366 million in foreign direct investments (FDI) that Indonesia amassed in 2023 went to restaurants, followed by starred hotels ($319 million) and fitness centers ($34 million).

"We are under-investing in this sector. ... Last year, Indonesia recorded more than $3 billion in investments in tourism, but in reality, as we have seen in the past, the trend shows that 80 percent [of the money] was going to hotels, restaurants, and cafes," Sandiaga told the 2024 International Tourism Investment Forum in Jakarta on Wednesday.

"We need more investments in the ecosystem, including the development of sustainable products, and inclusive community-based tourism. We actually need $15-20 billion of investments," Sandiaga said.

Indonesia already posted $943.4 million in tourism and creative economy investments in Q1-2024, accounting for almost 32 percent of the full-year target of $3 billion.

The top-ranking business sectors did not change that much, with starred hotels attracting the most investments at almost $198.8 million. Seconded by restaurants ($114.4 million) with the third place going to apartment hotels (almost $18 million).

"We need more investments in the supporting infrastructure other than the hotels, restaurants, and cafes," Sandiaga said.

Indonesia is hoping to have 17 million foreign tourists throughout 2024. The country is aiming for 1.4 billion trips by domestic tourists this year. President Joko "Jokowi" Widodo has set this year's overall investment target at Rp 1,650 trillion ($101 billion).

Source: https://jakartaglobe.id/business/indonesias-tourism-sector-is-still-underinvested-sandiag