Tourism: a socio-economic priority for Indonesia

Suryo Sulisto, the current Chair of the Indonesian Chamber of Commerce and Industry (based in Jakarta), recognizes the importance of the travel and tourism industry to economic enrichment and would li

Tourism: a socio-economic priority for Indonesia

Suryo Sulisto, the current Chair of the Indonesian Chamber of Commerce and Industry (based in Jakarta), recognizes the importance of the travel and tourism industry to economic enrichment and would like to see more Americans visiting Jakarta, Bali, and parts of the archipelago. He would also like to see an increase in foreign investment in the form of 4-5 star hotels and theme parks.

In 2008, tourism was the third largest contributor to foreign exchange. Current data (January–October 2011) shows that 6.27 million tourists visited the destination with three-quarters of visitors arriving from the Asia–Pacific region and one-fourth from Europe, primarily UK, France, and Germany. Most travelers enter Indonesia by air, with the 2.32 million landing at Bali’s Ngurah Rai International Airport and 1.6 million selecting Jakarta’s Soekarno-Hatta International Airport.

Tourism to Indonesia has increased 8.47 percent over 2010 with most holiday travelers (59 percent) wending their way to Bali; West, Central, and East Java; Jakarta; North Sumatra; Lampung; South Sulawesi; and South Sumatra. Only 38 percent of travelers come to Indonesia with a business agenda.

According to Sulisto, “Current source markets are primarily Asian including Japan, Korea, Taiwan, and China.” He thought, “Perhaps the US tourism market has declined because there are no direct links from the US to Indonesia and travelers connect through Singapore and Hong Kong.” He went on to mention that, “Garuda Indonesia Airlines is considering re-entering the US market, but this transportation addition is not likely to happen very quickly.”

To grow the Indonesian market, Sulisto would like to see the introduction of theme parks, the addition of 4- and 5-star hotels, and the expansion of festivals that are similar to the very popular jazz program introduced in 2005 by Peter F. Gontha. The Java Jazz Festival has become one of the world’s largest jazz events with over 150,000 tickets sold in 2011. The event is ranked at the top of international music festivals and compared to jazz events in Montreux and Montreal.

Indonesia By Sea
Cruise tourism has garnered the attention of the Indonesian government because data indicates its growing importance to the economy. In 2010, there were 198 cruise calls to the country representing 94, 228 passengers. The new plan will focus on improving seaports for cruise ships and making Bali a cruise hub by 2014. The Indonesia Investment Coordinating Board is looking for private investment of US$24m to develop the Bali cruise terminal that will cover 9000 sq. meters and have a capacity for two large cruise ships.

Expansion Opportunities
Most of the tourism growth is likely to come from international markets, although the potential for domestic expansion is significant. The large size of the country makes it an easy option for Indonesians to discover its various regions. With many public holidays, a domestic tourism focus appears, at first glance, to be a really good idea – until marketers realize that these holidays are rarely paid, making the concept of “taking a holiday” to visit another part of the country an option that is not feasible. However, in response to the budgetary constraints of local Indonesians, the government has developed “tourism events” across the country, and in 2010, 80 programs were held in smaller regions that are not populated by international and/or up-market visitors.


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Challenges
While Indonesia has the potential to be a prime–time tourism destination, it faces infrastructure challenges, a bias to maintaining communities in traditional (or authentic) ways, and security/safety concerns. Many airports are not ready for tourism increases, and wide-bodied aircraft cannot be accommodated at all locations. Local communities prefer to follow the “old” ways of living, much of which is tied to traditional spiritual values. In addition, security and geological disruptions have prompted many countries to issue travel warnings, suggesting that travel to Indonesia be postponed or canceled.

Currently, the US State Department recommends vigilance when traveling to Indonesia, for theft and other crimes of opportunity prevail at airports and other public areas. The department also suggests that visitors sign up for US Embassy alerts on their cell phones and keep important documents (i.e., passports) close at hand in case of emergency exits from the country.

In response to the challenges, Sulisto stated that there is a “Masterplan for Economic Expansion” that was initiated in early 2011 and includes infrastructure projects that will “…improve the transfer of people and goods in the country,” and “…several airports and seaports will be built.” The projects will require 32 million rupiah or US$3.6 billion. With government financing available for only 20 percent of the projects, Sulisto said that, “Private companies are invited to participate through the public-private partnership framework with a concession of at least 30 years which can be extended.”

A Good Fit
Sulisto’s background and expertise makes him the perfect executive to pilot public-private partnerships with global organizations. A graduate of the University of Wisconsin, he obtained his MBA from Washington and Jefferson University in Washington, Pennsylvania. He also holds a degree from The National Defense Institute of Indonesia. A former Eisenhower Fellow, he served on the Board of Trustees of the Eisenhower Fellowship that was chaired by President George Bush, Sr. He has also been a Special Envoy for the Americas under President Habibie, a Vice Chair of the British Chamber of Commerce and Chair of the Indonesian Business Alliance against AIDS/HIV.

When Sulisto completed his education in the USA, he returned to Indonesia to start Satmarindo, a shipping and marine services company, providing oil exploration services to oil companies exploring in the Java Sea. It quickly became one of the largest fleets in Southeast Asia with the operation of 40 vessels (e.g., tankers, supply and diving vessels, and crew boats). Currently, Sulisto’s company is engaged in oil production and exploration, coal mining, marine and air transportation, resort development, and retailing.

For information on hospitality, travel, and tourism development opportunities in Indonesia: [email protected] or [email protected] .

Author: editor

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