Diana Mariska, Jakarta – The Indonesian government is offering 50 percent off flight tickets to persuade domestic and international tourists to keep visiting the country's favorite tourist destinations as the global tourism industry faces an uncertain future due to the continuing coronavirus outbreak.
The government stimulus is aimed at boosting tourist arrivals by 40 percent in 10 major destinations – Batam, Bali, Yogyakarta, Silangit, Malang, Labuan Bajo, Lombok, Manado, Tanjung Pandan and Tanjung Pinang, Transportation Minister Budi Karya Sumadi said on Wednesday.
"This program is expected to boost domestic tourist arrivals by 25 percent and international arrivals by 10 percent. Cheaper hotel rates will make up an additional 5 percent," Budi said in Jakarta.
"In total, we expect an increase of between 30 percent and 40 percent [in tourist arrivals] to keep the tourism business going in those destinations," he said.
Speaking separately on Wednesday, Finance Minister Sri Mulyani Iindrawati said the government will spare Rp 443 billion ($31.9 million) from the state budget to reduce ticket fares on domestic flights by 30 percent, while three state-owned enterprises including oil and gas company Pertamina and airport operators Angkasa Pura and Airnav will offer incentives to reduce fuel and ground handling costs, the key components in determining ticket fares.
The combined incentives could reduce airfares by up to 50 percent, she said.
In addition, a budget of nearly Rp 300 billion has been allocated for a program to lure international visitors, including Rp 98.5 billion set aside for domestic airlines and travel agencies so they can provide discounts for foreign tourists.
The Finance Ministry will also pay 33 district and municipal governments Rp 3.3 trillion to suspend hotel and restaurant taxes for six months.
The Tourism and Creative Economy Ministry will receive Rp 103 billion for promotional campaigns, Rp 25 billion for tourism events and Rp 72 billion to hire social media influencers whose main task will be to inform visitors that Indonesia is free from the coronavirus outbreak.
Indonesia recorded 16.1 million international arrivals last year, up slightly by 1.8 percent from the previous year.
However, the country's reliance on Chinese visitors – who made up nearly 13 percent of the total international arrivals last year – makes it particularly vulnerable to the global tourism downturn caused by the Covid-19 outbreak.
The government has estimated that a sharp fall in Chinese arrivals may cost the country $2.8 billion in potential revenue losses this year.