Tourism in Indonesia is an important component of the Indonesian economy, as well as a significant source of its foreign exchange revenues. Indonesia ranked 20th in the world tourist industry in 2017, and ninth-fastest among all countries in tourist-sector growth, third-fastest in Asia and fastest in Southeast Asia. In 2018, Denpasar, Jakarta and Batam were among the ten cities globally with the fastest tourism growth at 32.7%, 29.2% and 23.3% respectively. Tourism ranked as the fourth-largest export earner among goods and services sectors.

In 2019, Indonesia recorded 16.10 million foreign tourist arrivals, seeing a 1.9% increase from 2018. In 2015, 9.73 million international visitors entered Indonesia, staying in hotels for an average of 7.5 nights and spending an average of US$1,142 per person during their visit, or $152.22 per person per day. Singapore, Malaysia, China, Australia, and Japan are the top five sources of visitors to Indonesia.

The Travel and Tourism Development Index 2024 ranks Indonesia 22nd out of 119 countries overall with a Travel and Tourism Competitiveness Index score of 4.46. This is an improvement for the Indonesian tourism sector. In 2019, Indonesia ranked 40th out of 140 countries overall with an index score of 4.3. This is also an improvement from Indonesia's 2017 position of 42nd out of 136 countries overall with an index score of 4.2. The 2015 report ranked the price competitiveness of Indonesia's tourism sector 3rd out of 141 countries. The report mentions that Indonesia scored well in the 'T&T Policy and Enabling Conditions' subindex (ranked 9th). The country also scores highly on natural and cultural resources (ranked 17th). However, the country scored poorly in the infrastructure subindex (ranked 75th), as some aspects of tourist service infrastructure are underdeveloped.

In 2016, the Indonesian government was reported to be investing more in tourism development by attracting more foreign investors. The government has given priority to 10 areas as follows: Borobudur, Central Java; Mandalika, West Nusa Tenggara; Labuan Bajo, East Nusa Tenggara; Bromo-Tengger-Semeru, East Java; Thousand Islands, Jakarta; Lake Toba, North Sumatra; Wakatobi, Southeast Sulawesi; Tanjung Lesung, Banten; Morotai, North Maluku; and Tanjung Kelayang, Bangka Belitung Islands. As quoted in the newspaper The Jakarta Post, the government is aiming for 275 million trips from domestic tourists by the end of 2019. The government has also secured commitments from potential investors, totalling $70 million for building accommodations, marinas and ecotourism facilities in 3 of the prioritised 10 areas. Indonesia was ranked seventh among travel publisher Lonely Planet's top 10 countries to visit in 2019. The country ranked fourth among the top 25 destinations in the world in 2018 by the travel site TripAdvisor.

Overview

Indonesia's tourism industry benefits from a tropical climate, a large archipelago of 17,508 islands, 6,000 of them inhabited, and the world's second-longest shoreline (54,716 km) after Canada. Indonesia is the world's largest and most populous country situated entirely on islands. The beaches in Bali, the diving sites in Bunaken, Mount Bromo in East Java, Lake Toba and various national parks in Sumatra – all are popular scenic destinations. Indonesia is culturally diverse, with 719 living languages used across the archipelago. The ancient Prambanan and Borobudur temples, Toraja, Yogyakarta, Minangkabau and Bali (with its many Hindu festivities) are popular destinations for cultural tourism.

Indonesia belongs to the Pacific Asia Travel Association (PATA) and hosted its annual conference in 1963 and 1974 in Jakarta, and in 2003 in Bali. Indonesia also hosted the PATA Travel Mart in 1985 and 1989 in Bali, and in 2016 in Jakarta.

Tourism in Indonesia is overseen by the Indonesian Ministry of Tourism. International tourism campaigns have focused on the country's tropical coastlines and cultural heritage sites. Resort infrastructure has been developed in several popular destinations, particularly Bali. The integration of cultural affairs and tourism under a single ministry shows that cultural tourism is considered an integral part of Indonesia's tourism industry, and conversely, that tourism is used to promote and preserve the cultural heritage.

Some challenges faced by Indonesia's tourism industry include the development of infrastructure to support tourism across the large archipelago, incursions of this industry into local traditions (adat), and the impact of tourism development on local life. The tourism industry has also faced setbacks because of security problems. Since 2002, warnings have been issued by some countries about terrorist threats, as well as ethnic and religious conflicts in some areas, significantly reducing the number of foreign visitors for a few years. However, the number of international tourists has recovered since 2007; this number reached a new high in 2008, and it has continued to rise since then.

The 2019 Travel and Tourism Competitiveness Report ranks Indonesia 40th out of 140 countries overall, with a score of 4.3. This report lists the price competitiveness of Indonesia's tourism sector as 6th out of 140 countries. The report states that Indonesia scores well on visa policy (3rd) and international openness (16th), as well as on natural (17th) and cultural resources (24th). However, Indonesia scores poorly on infrastructure (98th), because some aspects of tourist service infrastructure are underdeveloped. Other aspects that must be improved include health and hygiene, environmental sustainability, and affinity for travel and tourism.

Historical context

Indonesia seems to have been a travel destination for centuries. Some panels in Borobudur bas-reliefs depicted drink vendors, warungs (small restaurants), and taverns or lodgings where people drank and danced. The historical record of travel in Indonesia can be found since the 14th century. The Nagarakretagama (old Javanese eulogy) reported that King Hayam Wuruk's royal travel throughout the Majapahit realm in East Java included many carriages, accompanied by nobles, royal courtiers, officials and servants. Although it seemed like an affair of state, in some instances the king's trip resembled a modern-day tour, as the king visited multiple modern tourism sites – from temples such as Palah and Jajawa, to mountain scenery, bathing in petirtaan (bathing pools) and going to the beach. The 15th-century travelogue of Bujangga Manik, a traveling Hindu scholar-priest from the city of Pakuan Pajajaran, reported on his travels around Java and Bali. Although his journey was a pilgrimage, visiting temples and sacred places in Java and Bali, sometimes he behaved like a contemporary tourist – for example, sitting and fanning himself while looking at mountain scenery in the Puncak area, Gede volcano that he describes as the highest point around Pakuan Pajajaran (capital of the Sunda kingdom).

Initially, the tourism, service and hospitality sectors in the Dutch East Indies were developed to cater to the lodging, entertainment and leisure needs of domestic visitors, especially the wealthy Dutch plantation owners and merchants during their visits to the city. In the 19th century, colonial heritage hotels equipped with dance halls, live music and fine-dining restaurants were established in urban areas of the Dutch East Indies; these hotels included Hotel des Indes (est. 1829) in Batavia (now Jakarta), Savoy Homann Hotel (est. 1871) in Bandung, Hotel Oranje (est. 1910) in Surabaya, and Hotel De Boer in Medan. Since the 19th century, the Dutch East Indies have attracted visitors from the Netherlands. The first national tourism bureau was the Vereeniging Toeristen Verkeer, established by the Governor-General of the Dutch East Indies in the early 20th century; this bureau shared its head office in Batavia with the airline Koninklijke Nederlandsch Indische Luchtfahrt Maatschappij, or KNILM (not a KLM subsidiary), which began flying from Amsterdam to Batavia in 1929. In 1913, the Vereeniging Touristen Verkeer wrote a guidebook on tourist locations in the Indies. Since then, Bali has become known to international tourists, with foreign tourist arrivals rising by more than 100% in 1927. Much of the international tourism of the 1920s and 1930s was by international visitors on ocean cruises. The 1930s saw a modest but significant influx of mainly European tourists and long-term visitors to Bali. Many came for the blossoming arts scene in the Ubud area, which was both an internal phenomenon and a two-way exchange between the Balinese and outsiders.Robert Cribb, 'International tourism in Java, 1900–1930', South East Asian Research 3 no 2 (1995), pp. 193-204.

Tourism mostly disappeared during World War II, the Indonesian National Revolution and the early years of President Sukarno's era. On 1 July 1947, the government of the Republic of Indonesia tried to revive the country's tourism sector by establishing HONET (Hotel National & Tourism) led by R. Tjitpo Ruslan. This new national tourism authority took over many of the colonial heritage hotels in Java and renamed them all "Hotel Merdeka". After the Dutch–Indonesian Round Table Conference in 1949, this tourism authority changed its name to NV HORNET. In 1952, the president formed the Inter-Departmental Committee on Tourism Affairs, which was responsible for reestablishing Indonesia as a global tourism destination.https://ppgba.org/

National pride and identity in the late 1950s and early 1960s were incorporated into the architectural monumentalism of Sukarno in Jakarta; this included the development of multi-story international standard hotels and beach resorts, such as Hotel Indonesia in Jakarta (est. 1962), Ambarrukmo Hotel in Yogyakarta (est. 1965), Samudra Beach Hotel in Pelabuhan Ratu beach, West Java (est. 1966), and Inna Grand Bali Beach Hotel in Bali (est. 1966). The political and economic instability of the mid-1960s saw a radical decline in tourism again. However, during this time, Bali – particularly the village of Kuta – was an important stopover on the overland hippy trail between Australia and Europe, as well as a supposedly secret, undeveloped surf spot. To stimulate the tourism sector, Indonesia joined PATA in the early 1960s; the country was appointed host of the PATA annual conference in 1963 and 1974 in Jakarta, and in 2003 in Bali. To host the 1974 PATA conference, the Hotel Borobudur was built and named the official event hotel. At that time, the hotel was the largest and the most luxurious in Jakarta.

In the early-to-mid-1970s, high-standard hotels and tourist facilities began to appear in Jakarta and Bali. After the completion of the Borobudur restoration project in 1982, Yogyakarta became a popular tourist destination in Indonesia following Bali; tourists were mostly attracted to the 8th-century Buddhist monument, the surrounding ancient Javanese temples and the Yogyakarta Sultanate palace. From this period to the end of President Suharto's era, governmental policy on the tourism industry included many regulations and developments to encourage more international tourists both to visit Indonesia and to stay longer.

Statistics Tourist arrivals

+Annual tourist arrivals (millions)

Source: Statistics Indonesia