Indonesia Aims for $16 Billion in Tourism Investment as Sector Reaches New Heights

The largest nation in Southeast Asia offers a variety of concepts that global tourism professionals need to consider for their own work.

Whenever the world thinks of tourism in Indonesia, it is almost automatic that their thoughts turn to either Bali or Jakarta, the country’s two primary hubs for travellers.

But there is a lot more to Indonesian tourism than just paradisiacal getaways or urban adventures; also, Indonesia is giving the global tourism industry much to think about.

In this feature, we highlight the growth of the Indonesian tourism sector along with the wisdom it imparts to its peers throughout the globe.

Tourism as a Socio-Economic Driver for Indonesia

According to the World Travel & Tourism Council (WTTC)’s 2024 Economic Impact Research report, the tourism sector contributed 4.8 percent to the national economy as of end-2023 and is poised to increase that contribution to around 5.3 percent by 2034.

Tourism also generated over 543,000 employment opportunities at the time, bringing its total manpower headcount to approximately 12 million, just 2.3 percent short of the total last seen in 2019. It should also be noted that UN Tourism included ten Indonesian areas in its list of Super Priority Destinations, particularly the heritage sites of Lake Toba and Borobudur, as well as regenerative tourism zones like the Riau Islands. These areas offer significant tourism-centric investment opportunities worth more than $13 billion.

Needless to say that, with its diverse range of cultures and belief systems, Indonesia has something to offer just about everyone.

Why Indonesia is so Appealing for Tourism Investment

Indonesia attracted $60 billion in foreign direct investments (FDIs) across various sectors. Tourism received around $5.6 billion from these FDIs as of end-2024, on top of $10.5 billion from domestic investors.

So why are both domestic and foreign investors willing to invest in the Indonesian tourism sector? There are actually four reasons:

1. Constant government support: The Indonesian government has long considered tourism a socio-economic growth center, providing considerable backing to the sector. Programs dedicated to destination management, area development, and human resource training bolster this effort.
2. Market diversity: Indonesia’s rich tourism landscape meets every budget, from luxury resorts to eco-lodges, catering to various types of travelers.
3. A skilled workforce: As noted in a report by the World Bank, training initiatives have equipped nearly 18,000 participants from 155 tourism villages, generating income and employment for around 1.2 million individuals.
4. Emergent niche markets: Indonesia caters to various emerging niches like ecotourism and adventure tourism, which promise thrilling experiences and opportunities to engage with local flora and fauna.

As the tourism landscape becomes more competitive, Indonesia’s unique attributes and strengths are expected to draw attention from around the globe.