Tourism's contribution to Indonesia's GDP can grow higher
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Investor Daily - Kontribusi pariwisata terhadap PDB Indonesia berpeluang tumbuh lebih tinggi
19 May 2022
Jakarta – The tourism sector’s contribution to Indonesia’s gross domestic product (GDP) is still low at only 5%. The contribution is lower than other G20 countries such as Spain (14%), Italy (13%), Turkey (11%), as well as an ASEAN country Thailand (12%). To increase the contribution, more promotions, access repairs, and affordability are required.
Tiket.com CEO George Hendrata explained that digital economy in the ASEAN area reached around US$100 billion based on the data from Google and Temasek. From the amount, around 30% to 40% is contributed by travel. From the 30-40%, around 30% is from Indonesia. This shows that Indonesia is a large country, and it is expected to receive 16 million tourists this year.
“Our tourism’s GDP contribution is at 5%. So, there is a chance to match Malaysia and Singapore [with tourism] contributing around 10-12%. Moreover, we can also be like Thailand, Spain, and Italy,” George said during the Fortune Indonesia Summit (FIS) 2022 event held by IDN Media in Jakarta on Wednesday (18/5/2022).
According to George, there are at least three crucial keys to increase tourism’s contribution to the GDP. The first is attraction, as Indonesia has 17 thousand islands that can promote new locations. He explained that his company held workshops for local operators to show what can be exposed so that people know what can be seen or which location is suitable for photography.
“We have a responsibility to share how beautiful our tourism is with Labuan Bajo and Raja Ampat. This must be implemented continuously so that the places will keep on being visited by international or domestic tourists in the future,” George said.
The second is accessibility. He explained that Tiket.com was always observing the flight traffic data. So, they can provide an input on where maybe a new airport is required or where an airport needs to be renovated.
The third is affordability. Tiket.com will try to secure as many suppliers as possible so that their prices are affordable for travellers. “We want to [increase our contribution to the GDP] faster. We carry out [efforts] with related ministries. We also have an inter-intern program with the Ministry of Tourism and Creative Economy so that we can learn from each other,” he stated.
During the occasion, Tourism and Creative Economy Minister Sandiaga Uno, in his video, explained that the creative economy was slowly but surely becoming the backbone of the national economy after the Covid-19 pandemic. This is because the sector is the most enduring since the Covid-19 pandemic occurred at the start of 2020.
“The potential is increasing because this is the sector that has been proven to endure every dynamic, including the global Covid-19 pandemic,” he stated.
Sandi revealed that, based on the forecast data from the strategic study deputy of the Tourism and Creative Economy Ministry, the creative economy contributed Rp1,273 trillion to Indonesia’s GDP throughout 2021. “Our advantage and potential in the creative economy sector makes us optimistic about the industry becoming a new economic driver in Indonesia in the future and collaborating with other sectors,” he stated.
Meanwhile, Trade Minister Muhammad Lutfi explained that the economy and the global trade was still uncertain due to a multidimensional crisis. IMF, in April 2022, corrected the global economic growth to 3.6% or by 0.8% compared to the forecast in January.
The global food and energy crisis is one of the reasons why the economic growth is slowing down. Inflation in several countries is growing uncontrollably. “However, we must be grateful as, in the first quarter of 2022, Indonesia’s economy grew 5.01% compared to last year,” he said.
The Trade Minister explained that Indonesia’s inflation from January to April 2020 was quite low at 2.1%. Indonesia’s trade balance performance continues its surplus trend for 24 months in a row. The surplus from January to April 2020 reached US$16.89 billion, sustained by the surplus from oil and gas export that reached US$24.6 billion. Lutfi explained that, amid the various challenges and complexities, Indonesia’s trade currently needed several stakeholder platforms that can synergise Indonesia’s potential in the future.
