Waspadalah terhadap penipu yang aktif di WA mengatasnamakan Indonesia Investments
11 May 2025 (closed)
Jakarta Composite Index (6,832.80) +5.05 +0.07%
Analysis of Domestic Tourism in Indonesia – Crucial Contributor to National Economic Growth
Those who follow our reports might be aware that we’ve been unable to obtain data regarding the foreign visitor arrivals into Indonesia since the start of 2025. The main problem seems to be that the publication of foreign tourism-related data has moved from Indonesia’s Statistical Agency (Badan Pusat Statistik, or BPS) to the Ministry of Tourism and Creative Economy. But, unfortunately, this ministry hasn’t released any data (related to foreign visitors in 2025) on its website (yet).
So, instead of discussing the topic of foreign tourism, this situation actually presents us an occasion to take a closer look at domestic tourism. This is a topic we have never really discussed in depth (with the exception of Idul Fitri-related traveling), despite domestic tourism being an important element in the national economy of Indonesia.
Why is domestic tourism an important element in the national economy? Well, first, when Indonesians travel then it triggers a money rotation across Indonesian society, which is positive for national economic growth.
Let’s illustrate this (briefly) with an example. When a middle-class family in Jakarta goes on holiday to Bandung for a weekend by train then this family is bound to spend money on a wide variety of products and services during that trip (expenditures it would not have made if that family had stayed home). They might spend two nights in a hotel, visit the Bandung Zoo, eat in restaurants, drink in cafes, buy souvenirs to take back home (and give to friends or family), and of course need transportation.
When this happens on a large scale (with not one but many families spending money on various products and services), then more of those products and services need to be produced (and offered) in society. For example, during the weekend, a hotel may need extra staff to handle the guests (implying these extra staff-members earn more money, which they –in turn– can spend on more products and services in their daily lives, hence the cycle starts again).
This brings a particularly interesting money flow when it are city-dwellers who visit the more remote areas of the country. These typically rural areas lag behind in terms of economic and social development, and so when tourists arrive they give that local economy a much-needed boost.
True, if that family from Jakarta goes on holiday to Bandung, it means some missed opportunities for business-owners in Jakarta. After all, if that family had not gone to Bandung, then it might have spent some money on products and services in Jakarta. However, typically, people spend significantly more when on holiday, and therefore there is still a net increase in the money rotation when people go on holiday.
Secondly, considering tourism is a ‘tertiary need’ (meaning that people only tend to go traveling when their basic needs have been met), domestic tourism also gives us some interesting information about Indonesians’ purchasing power (which, in turn, gives us some information about the national economy of Indonesia).
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