In light of the profound shift in tourist behaviour worldwide from the pandemic, the Indonesian government is looking to prioritise sustainable tourism as a key driver of economic development, ushering in a wave of eco-friendly policies and incentives for green investments.

Quality > Quantity

"As we adapt to the new normal, the urgency of sustainability in the tourism sector has never been more pronounced," stated Rizky Handayani, Indonesian Deputy Minister for Tourism Product and Events at the 8th Tourism Hotel Investment and Networking Conference (THINC), which took place at Sofitel Bali Nusa Dua from 6-7 September 2023.

Rizky advocates transitioning from mass tourism to special interest tourism for the country's tourism development. While recognising the significance of a thriving hotel industry, the government now prioritises attracting high-quality special interest tourists.

Budi Tirtawisata, CEO of Panorama Group, echoed the government's sustainability drive, adding that Panorama has already taken steps towards sustainability amid growing consumer demand for eco-friendly options. However, he stressed the necessity of defining quantity and quality in tourism and requested clear government guidelines.

Budi believes that quality tourism does not entail excluding tourist groups from Indonesia but instead underscores the importance of upholding high-quality standards while accommodating a significant number of tourists.

“What's most important is quality, so there can be many tourists (visiting Indonesia) as long as they are of high quality,” he elaborated.

Indonesia Ministry of Tourism and Creative Economy’s Rizky Handayani and Panorama Group’s Budi Tirtawisata speaking at the 8th Tourism Hotel Investment and Networking Conference in Bali. Photo Credit: Hotelivate

Bali leads the way

Bali is one destination in Indonesia that has taken the lead in implementing green tourism practices, including electric cars and renewable energy sources like wind and solar power. Several hotels in Nusa Dua Bali have already adopted sustainable practices, such as using electric cars and transitioning to solar energy.

Rizki encourages more investors to follow suit in participating in sustainable tourism across Indonesia, promising significant incentives for eco-friendly businesses.

The government remains committed to developing priority tourism destinations like Lake Toba, Borobudur, Labuan Baju, Mandalika, and Likupang. An additional budget of Rp15 trillion (US$963 million) is set aside for this purpose over the next two years.

More investment needed

The tourism industry in Indonesia continues to show promise, with the government targeting 1.4 billion domestic tourists and 6.5 million foreign tourists by year-end. Notably, international tourist arrivals grew by 250.3% in the second quarter of 2023, with the top five source countries being Singapore, Malaysia, Australia, India, and China.

Despite the positive outlook, the tourism industry's investment levels still lag behind. The government seeks to attract more investment, with a target of US$2.68 billion. Rizky recommends investing in star hotels for investment value, with Bali and Nusa Tenggara Timur as primary destinations. The new capital city, Nusantara, also presents investment opportunities.

The government remains committed to developing infrastructure in priority tourism destinations, including Lake Toba in North Sumatra, Borobudur in Central Java, Labuan Bajo in East Nusa Tenggara, Mandalika in West Nusa Tenggara, and Likupang in North Sulawesi. An additional budget of Rp 15 trillion (US$963 million) has been allocated for these developments over the next two years.

“I invite all of you to consider these promising opportunities and join us in crafting a sustainable future for Indonesia's tourism and creative economy,” Rizky remarked.