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Indonesian businesses expect muted recovery after 2023 tourism rebound

Jakarta Post - February 5, 2024

Deni Ghifari, Jakarta – More than 11 million foreign tourists visited Indonesia last year, according to Statistics Indonesia (BPS), signaling a strong post-pandemic recovery, but businesses expect greater challenges this year as potential visitors and politicians keep their eye on the general election.

The 2023 tourism figure was nearly double the 5.9 million visits recorded in the year before, marking a continued rebound after a pandemic-induced nadir of 1.7 million visits in 2021.

However, the 2023 count remains below the 16.1 million foreign tourist visits logged in 2019, before the pandemic.

Nonetheless, the figure exceeded the Tourism and Creative Economy Ministry's target of 8.5 million foreign tourist visits for last year.

"The tourism sector's performance in 2023 had been very good," Indonesian Hotel and Restaurant Association (PHRI) secretary-general Maulana "Alan" Yusran told The Jakarta Post on Thursday.

He said it thanks to a handful of international events initiated or promoted by the government, which spurred a number of bookings in the meetings, incentives, conventions and exhibitions (MICE) category.

One such gathering was the ASEAN Summit, which had constituent events in tourist destinations such as Bali and Labuan Bajo, West Nusa Tenggara.

Indonesia also hosted several international sporting events, including the FIBA World Cup, an international basketball competition, and a MotoGP event in Mandalika. Other events included concerts featuring international-caliber stars, such as Coldplay and Slipknot in the Hammersonic music festival.

Alan said 2024 might be a challenging time for tourism given that the year could be lacking in international events as the country was holding a general election that could last through the first half of the year.

The first round of voting will be held on Feb. 14, but if no candidate wins a majority, a runoff vote will be held in June.

"Maybe we will be in a political atmosphere for the whole year, especially if it goes to a second round," Alan said, adding that this would keep the government's focus on politics rather than bringing in international events.

The Tourism Ministry has set a target of 14.3 million foreign tourists visits for this year, but Alan noted that this figure could be difficult to achieve given the challenges of the election year.

Tauhid Ahmad, executive director of the Institute for Development of Economics and Finance (Indef), said in December of last year that he expected sluggish economic activity in the United States, China, Japan and several other developed countries to have an impact on tourist visits to Indonesia.

Excluding ASEAN nations, Australia provided the largest number of foreign tourists in Indonesia last year, followed by India and the US, according to BPS data. Tourists from these countries also typically stayed longer and spent more than average.

Alan noted that despite the big visitor numbers last year, not all tourist destinations were recovering at the same pace, with many trailing behind Bali, the country's most popular foreign tourist spot.

Bali hotels saw occupancy hover around 54.16 percent last year, above the national figure of 51.27 percent.

Overall, nationwide hotel occupancy has inched closer to its pre-pandemic level of 54.81 percent in 2019.

Alan said that while hotel occupancy would soon return to the pre-pandemic average, it would not mean good times for all operators.

"If we dissect each region, you'll be able to see which regions are contributing big to the national occupancy rate, [...] while the rest are still experiencing heavy pressure, so it's still far from recovered," he added.

Tourism expert Didien Junaedi told the Post on Thursday that the 2023 tourist figures were "good" but noted that there was still more work to be done.

He said it was possible that foreign tourist numbers would return to pre-pandemic levels this year but that it would depend on the course of the election, as international visitors would prefer a stable domestic situation.

He added that Bali would remain attractive to foreign visitors despite a US$10 tourist tax expected to be introduced this year.

Source: https://asianews.network/indonesian-businesses-expect-muted-recovery-after-2023-tourism-rebound