Indonesia is renowned worldwide for its breathtaking natural landscapes, rich cultural heritage, and warm hospitality. As one of the fastest-growing tourism markets in Southeast Asia, Indonesia presents a wealth of opportunities for foreign businesses.
This article explores the tourism industry’s outlook, potential business opportunities, regulations, and leading players while offering insights on how to start a tourism company in the country.
Indonesia Tourism Industry Outlook
The tourism industry plays a significant role in shaping Indonesia’s future, with continuous growth expected in the coming years. In 2023, tourism contributed around 4.2% to Indonesia’s GDP, and this share is projected to increase steadily. The Ministry of Tourism and Creative Economy (Kemenparekraf) has set a target of 8.5 million international visitors for 2024, focusing on attracting high-spending tourists to boost the sector further.
The sector’s recovery post-pandemic has been impressive, with international arrivals jumping by 251% in 2022, following the easing of travel restrictions, according to Statista. In addition to well-established destinations like Bali, Jakarta, and Yogyakarta, emerging hotspots such as Labuan Bajo and Mandalika are becoming increasingly popular among travelers. This growth is expected to continue, further solidifying tourism as a key pillar of Indonesia’s development.
Also read: 30 Best Places to Visit in Indonesia: Top Guide for Tourists
Tourism’s Role in Indonesia’s Economy
Tourism is a crucial driver of Indonesia’s economy, providing substantial contributions to both GDP and employment. In 2024, the sector’s contribution to the national GDP is projected to exceed IDR 1,131 trillion, representing 5.1% of the total. The World Travel & Tourism Council (WTTC) has noted that tourism supported 12% of Indonesia’s total employment in 2023, reflecting the sector’s importance in providing job opportunities across the country.
Domestic tourism is also on the rise, with spending expected to reach IDR 344 trillion in 2024, marking a 9.7% increase from 2019. On the international front, visitor spending is forecast to hit IDR 291 trillion (USD 19.1 billion) in 2024, signaling a strong recovery from the pandemic. Looking ahead, the sector is set to make an even greater impact, with expectations for tourism to contribute nearly IDR 1,828 trillion annually to Indonesia’s GDP by 2034, supporting over 17 million jobs—one in every nine jobs in the country.
Also read: Major Industries in Indonesia (Based on Contribution to GDP)
Tourism Business Opportunities in Indonesia
Foreign investors will find diverse opportunities across Indonesia’s tourism sector:
Hospitality and Accommodation
With a rise in international and domestic travelers, there’s increasing demand for luxury resorts, boutique hotels, and eco-lodges, especially in emerging destinations.
Travel and Tours
Companies offering bespoke experiences such as adventure tourism, cultural tours, and sustainable travel packages are highly sought after.
Infrastructure Development
As part of its “10 New Balis” initiative, Indonesia is prioritizing infrastructure in lesser-known destinations, creating opportunities for businesses in construction, transportation, and logistics.
Digital Platforms and Technology
The rapid adoption of digital travel services like booking platforms and virtual tours highlights the potential in tech-driven tourism solutions.
Also read; 25 Profitable Business Ideas and Opportunities in Indonesia
Indonesia Tourism Business Regulation
Establishing a tourism business in Indonesia requires adherence to several regulations designed to protect both investors and local communities. Key points include:
Business Licensing
Foreign-owned tourism companies must comply with the Risk-Based Business Licensing (OSS-RBA) framework, simplifying the registration process.
Investment Restrictions
Certain sectors, such as small-scale travel agencies, are reserved for local entrepreneurs, while foreign companies are encouraged to invest in larger-scale ventures.
Tax Incentives
Investors in designated tourism zones may benefit from tax holidays and exemptions.
Environmental Compliance
Tourism businesses must adhere to strict sustainability and environmental guidelines to minimize ecological impact.
For detailed guidance, consult Indonesia Investment Coordinating Board (BKPM) and Kemenparekraf. (or you can chat us for FREE consultation!)
Also read: Indonesia Travel and Entry Requirements 2024: Complete Guide
Examples of Tourism Companies in Indonesia
Several prominent players shape Indonesia’s tourism landscape:
- Traveloka: As a leading travel-tech company, Traveloka dominates the online booking market, offering flights, hotels, and tours to millions of users.
- Aman Resorts: Known for its ultra-luxury accommodations, Aman Resorts operates exclusive properties in Bali and other iconic destinations.
- Panorama Group: A major player in travel services, Panorama Group specializes in inbound and outbound tour packages.
- Archipelago International: This hospitality group manages over 150 hotels across Indonesia, catering to various traveler segments.
How to Start a Tourism Company in Indonesia
To establish a tourism company in Indonesia, foreign investors should follow these steps:
- Market Research and Feasibility Study: Understand the target market, competition, and regulatory requirements.
- Choose a Business Structure: Options include forming a PT PMA (Foreign Investment Company) or partnering with local businesses.
- Register with OSS-RBA System: Submit necessary documents, including a business plan, to obtain a license.
- Secure Investment Approvals: Ensure compliance with foreign ownership limits in the tourism sector.
- Hire Local Talent: Employing local staff fosters community relationships and aligns with government policies.
- Marketing and Partnerships: Utilize digital platforms and collaborate with travel agencies to attract international clients.
Indonesia’s tourism industry offers a lucrative gateway for foreign investors, with abundant opportunities across hospitality, infrastructure, and digital innovation. By navigating the regulatory landscape and leveraging the country’s dynamic growth, foreign businesses can establish a strong foothold in this thriving sector.
If you are considering starting a beauty business in Indonesia, there are a number of resources and support services available to help you get started.
InvestinAsia is among the companies that specialize in aiding you with Indonesia company registration. We boast a team of seasoned experts who can guide you throughout the process of:
- Foreign company / PMA registration in Indonesia
- Indonesia representative office registration
- PT PMDN Set Up
- Virtual office setup in Indonesia
- Business registration number in Indonesia
- Indonesian Business Licenses
- Indonesia Trademark Registration
If you are interested in starting a business in Indonesia, you can start by contacting us for FREE consultation.
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