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Tourism Investment in Indonesia Has Bright Prospects

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By: Dede Sulaiman)*

The number of leading tourist objects in Indonesia, of course, must be used properly, it is even possible that in the tourism sector this will bring in investors who can improve the economy in Indonesia.

Bahlil Lahadalia as the Head of the Investment Coordinating Board (BKPM) assured investors that investment in the tourism sector in Indonesia has good prospects because there is still a lot of tourism potential that has not been developed. He did not hesitate to convince his colleagues that Indonesia has many tours to go to other than Super Priority Tourism Destinations.

Bahlil said the tourism sector has a high contribution to job creation in the country. In addition, the tourism sector also encourages the development of MSMEs and the regional economy. Therefore, the government is committed to encouraging the acceleration of infrastructure development in tourism destinations through investment.

His party is committed to taking accelerated, comprehensive and measurable steps in almost all ministries to make this a tourist destination in the future, because not only Bali but also many areas that must continue to be promoted. In addition to having tourism potential, the Indonesian government also continues to make improvements from various sides to support the sector.

Bahlil also said that Indonesia’s strong economic structure after the current Covid-19 pandemic has created political stability and security. Because of advanced tourism, of course, it will not be separated from the safety and comfort for the visitors.

In line with this, the Deputy for Investment Promotion at the Ministry of Investment/BKPM Nurul Ichwan said that Indonesia’s main attraction for investors in any sector is the size of the domestic market in the country.

Nurul explained that when Covid-19 hit in 2020, foreign tourist arrivals had dropped. However, in Indonesia, the movement of domestic tourists is still stretched.

Meanwhile, Luhut Binsar Pandjaitan as the Coordinating Minister for Maritime Affairs and Investment, encouraged the entry of investment both domestically and abroad to optimize the development of five super priority tourism destinations (DPSP). The five DPSPs are Lake Toba, Borobudur, Mandalika, Labuan Bajo and Likupang.

Luhut said that the realization of investment in the tourism and creative economy (parekraf) sector in 2020 until the first quarter of 2022 reached 5.31 trillion rupiah. While achieving good investment realization, Luhut emphasized the need for special attention because the length of stay of tourists is still low in Borobudur and Lake Toba.

When viewed from the average length of stay of tourists at DPSP Mandalika, Labuan Bajo and Likupang, it is currently quite good, which is around 3-5 days. While for Borobudur and Lake Toba only about 1-2 days.

On the other hand, currently, the average foreign tourist spends around US$500-1000 per visit to Mandalika, Labuan Bajo, Borobudur and Likupang.

Therefore, Luhut asked the Head of BKPM to be able to continue to maintain the trust of investors, guard the ease of investing while paying attention to the environment and local wisdom, as well as accelerate the licensing process and provide investment incentives.

Investment in the tourism sector is claimed to absorb a lot of jobs. Thus, there needs to be a strategy carried out by the government to be able to encourage investment in this tourism sector.

On the other hand, the government’s strategy must also answer questions, such as how to attract investment to create added value. This is in line with President Jokowi’s vision of economic transformation related to downstreaming and industrialization.

On a different occasion, GIPI (Indonesian Tourism Industry Association) recommended super priority tourist destinations to be promoted to investors. The recommendation was conveyed in relation to the government’s efforts in bringing investors to the tourism sector.

According to Didien Djunaedi as General Chair of GIPI, the government needs to promote the tourism sectors in these destinations to investors from a long time ago. Thus, the entry of foreign investment during the pandemic recovery period can be maximized.

The need for super-priority tourist destinations to be used as a government priority scale related to investment in the tourism sector cannot be separated from the still quite open opportunities for tourism areas such as the province of Bali which are considered quite attractive for investors.

By sector, the lower-middle level hospitality sector is considered a segment that is able to attract investors. This is because hotels in this segment have a relatively more market that allows them to be escorted by tourists

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