Tourism is a key pillar of Indonesia’s economy, with significant potential to drive economic growth in the coming years. Home to an archipelago of more than 17,000 islands, Indonesia is endowed with natural landscapes and a rich cultural heritage. However, much of its potential is untapped, as Bali maintains its position at the forefront of the tourism industry.
With the island of Bali being Indonesia’s most wellknown destination, the issue of over-tourism is becoming an increasingly noticeable problem. To address this, the government is keen to diversify tourism destinations and utilise the underexplored parts of the country that have much to offer holidaymakers.
Over-Tourism
The large number of visitors to Bali has come into focus in recent years. To accommodate new businesses and hotels, land is being bought up at the expense of the island’s natural attractions. In addition, the quality of tourism has come into question – in May 2023 the regional authorities issued a circular containing rules for visitors by which to abide, including respecting the local culture, dressing appropriately and paying for services using the local currency. With infrastructure stretched and residents expressing dissatisfaction with the effects of over-tourism, in February 2024 a new levy on tourists in Bali was introduced, although there have been issues about enforcing payment of the tax among visitors.
Priority Destinations
The 10 New Balis programme was launched in 2016 during the first term of President Joko Widodo, better known as President Jokowi. The initiative aimed to promote 10 alternative holiday destinations to Bali to alleviate various issues related to over-tourism on the island. The programme has since been streamlined to focus instead on five places around the country not in Bali, being rebranded as super priority tourism destinations (DPSP). These locations are Borobudur in Central Java, Lake Toba on Sumatra, Mandalika on Lombok, Labuan Bajo in East Nusa Tenggara and Likupang in North Sulawesi.
Sandiaga Uno, Indonesia’s minister of tourism and creative economy, has said that the aim of the initiative is to develop these destinations so that they are of a competitive standard, comparable to Bali. Upgrades and expansions of accessibility infrastructure – including airports, ports and roads, amenities and telecommunications networks, tourism products and human resources – are all on the agenda.
Progress on the DPSPs has been mixed. Tourism in Lake Toba is steadily increasing, with the Samosir District Tourism Office forecasting 850,000 visitors in 2023 and 1m in 2024. In November 2023 an estimated 100,000 visitors came to Lake Toba for the Aquabike Jetski World Championship. Borobudur Temple in Central Java targets 2m annual visitors, which seems to be achievable given that in 2022 domestic visitors alone totalled 1.4m, a huge increase compared with roughly 423,000 in 2021. To meet this target, the Ministry of Religious Affairs intends to invite Buddhist communities around the world to visit the temple.
Mandalika – home to the Mandalika International Circuit race track – is being promoted as a sports tourism destination. The most recent MotoGP Indonesia event in October 2023 recorded a 20% year-on-year growth in revenue, with ticket sales exceeding the target set by the Ministry of Tourism and Creative Economy, and hotel occupancy in some zones reaching 100%. The ministry estimates that ticket sales and tourist expenditure related to the 2023 race totalled Rp914bn ($59.4m).
However, Likupang has yet to attract significant numbers of new tourists. Despite upgrades to basic infrastructure and training, there has been little in the way of the development of tourism-related facilities. Similarly, Labuan Bajo, home to Komodo National Park, has seen major infrastructure development, but as of 2022 was yet to see tourist numbers return to pre-COVID-19 pandemic levels. In May 2023 Labuan Bajo hosted the 42nd ASEAN Summit as part of efforts to boost tourism in the area following the pandemic.
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