Minister suggests tourism and property industries to support each other
Indonesia's Minister of Tourism suggests combining tourism development with other industries, such as property, would likely attract more local investors.
Indonesia's tourism industry is working towards becoming the country's largest foreign exchange earner. In an interview with Globe Asia, the Minister of Tourism, Arief Yahya said Indonesia was "now among the top 20 fastest-growing travel destinations in the world.”
By 2019, it is hoped tourism’s contribution to national GDP will have doubled, bringing in USD 24 billion annually.
Indonesia registered 14.04 million foreign tourist visitors in 2017, a healthy 22% increase from the previous year. Last year’s target was 15 million visitors but volcanic eruptions in Bali discouraged many at the end of the year.
At an Investment Cooperation event held in Yogyakarta recently Yahya noted that investment in the country's tourism industry was still being dominated by foreign capital.
Local investors only made up about 10% of the tourism investment market in 2017, said Yahya, the same level as in 2015 despite there being an increase of up to 30% of local investors in 2016.
He suggested one reason for this was because of poor follow up. When the government holds investment forums, which are largely attended by potential local investors, there hasn't been adequate engagement to turn the interest into a reality.
In an effort to encourage more local investors to become a part of Indonesia's tourism goals, Yahya suggested that tourism be combined with other industries, such as property. This would make the benefits and importantly, the profits, more viable, he said. Tourism, on its own wasn't a big enough draw card.
Yahya used the building of a new airport in Yogyakarta as an example; a new airport results in an increase in land prices, which boosts the economy but it would also make sense to develop the infrastructure and the areas surrounding the city of Yogyakarta as well as the major tourist attraction at Borobudur Temple at the same time.
Source: Kumparan, Globe Asia, Global Risk Insights
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