Indonesia will need further investment in tourism supporting infrastructure to balance out its key hospitality sector, which currently accounts for 80 percent of total tourism investment.
This was agreed at the International Tourism Investment Forum (ITIF) 2024, held in Jakarta on June 5-6, organized by the Indonesian Ministry of Tourism and Creative Economy and supported by the United Nations Tourism Organization.
Bayona: We need to diversify and work with governments to create new incentives and regulations
Speaking at the opening ceremony of ITIF 2024, Indonesia’s Minister of Tourism and Creative Economy Sandiaga Uno said: “Indonesia saw tourism investment exceed $3 billion last year, beating the target of $2.6 billion. However, 80 percent of this investment went to hotels, restaurants and cafes.”
“We need more investment in the ecosystem, including developing sustainable products and inclusive community-based tourism. We need $15 billion to $20 billion in investment capital.”
According to data from the United Nations Tourism Agency, accommodation accounts for the largest portion of greenfield FDI investment in the Asia-Pacific region, accounting for 46% of total investment from 2013 to 2023.
“This sends a strong message that we need to diversify and work with governments to create new incentives and regulations to stimulate investment in our support sector,” UN Tourism Executive Director Natalia Bayona said.
Meanwhile, Indonesia’s Finance Minister Sri Mulyani Indrawati said in her keynote speech that despite global economic challenges, Indonesia continues to show relatively strong and resilient growth of 5 percent.
Sound fiscal policy has been a strategic tool to maintain economic stability, including harnessing the tourism sector’s potential to support inclusive economic growth towards Indonesia’s 2045 Vision.
“For Indonesia to reach its goal of becoming a high-income country by 2045, we need growth of 6-7 percent or even 8 percent. Tourism and the tourism industry can be a source of quality and inclusive growth,” Sri Mulyani said, adding that Indonesia’s abundant natural resources, rich cultural heritage and renowned hospitality were key assets.
However, there are many challenges that need to be addressed, such as improving the quality of human resources and developing the infrastructure to support growth.