negative impacts of tourism in indonesia

Tourism in Indonesia

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Tourism in Indonesia is big business. But why is this industry so important and what does it all mean? Read on to find out…

Geography of Indonesia

The tourism industry in indonesia, statistics about tourism indonesia, popular tourist attractions in indonesia, types of tourism in  indonesia, economic impacts of tourism in indonesia, social impacts of tourism in indonesia, environmental impacts of tourism in indonesia, faqs about tourism in indonesia , to conclude: tourism in indonesia.

Indonesia, an archipelago of over 17,000 islands, offers a mesmerising blend of cultures, landscapes, and historical wonders. Stretching from the bustling streets of Jakarta to the serene beaches of Bali and the ancient temples of Yogyakarta, Indonesia presents a unique tapestry of experiences for every traveller. In this article, I’ll provide insights into the diverse world of Indonesian tourism, capturing its vibrant traditions, natural beauty, and the myriad attractions that beckon visitors from around the globe. Join me as we embark on a journey through the multifaceted allure of Indonesia.

Indonesia is an archipelago located in Southeast Asia and is the world’s largest island country. Here is an overview of the geography of Indonesia:

• Location: Indonesia is situated between the Indian Ocean and the Pacific Ocean, spanning both the Western and Eastern Hemispheres. It is located between mainland Southeast Asia and Australia.
• Archipelago: Indonesia consists of more than 17,000 islands, with five main islands: Sumatra, Java, Kalimantan (Borneo), Sulawesi, and Papua. These islands are surrounded by smaller islands and islets, forming a vast archipelago.
• Size and Borders: Indonesia covers a total land area of approximately 1.9 million square kilometers (736,000 square miles), making it the 14th largest country in the world by land area. It shares land borders with Malaysia, Papua New Guinea, and Timor-Leste.
• Mountains and Volcanoes: Indonesia is known for its stunning mountain ranges and active volcanoes. The highest peak is Puncak Jaya in Papua, standing at 4,884 meters (16,024 feet). Other notable mountains include Mount Bromo, Mount Rinjani, and Mount Merapi.
• Rivers and Lakes: Several rivers flow through Indonesia, including the Kapuas River in Kalimantan, the Musi River in Sumatra, and the Citarum River in Java. Lake Toba in North Sumatra is the largest volcanic lake in the world and a popular tourist destination.
• Biodiversity: Indonesia is incredibly rich in biodiversity, with diverse ecosystems such as rainforests, coral reefs, mangroves, and savannas. It is one of the world’s most biodiverse countries, home to numerous endemic species, including the Komodo dragon and orangutan.
• Climate: Indonesia experiences a tropical climate, characterized by high temperatures and humidity throughout the year. The country has two main seasons: the wet season (October to April) and the dry season (May to September).
• Coastal Areas: Indonesia has an extensive coastline that stretches for approximately 54,716 kilometers (34,000 miles). It is surrounded by the Indian Ocean to the west and south, and the Pacific Ocean to the north and east.
• Coral Reefs: Indonesia’s waters are renowned for their vibrant coral reefs, making it a popular destination for diving and snorkeling. The Coral Triangle, located in the waters surrounding Indonesia, is considered the world’s epicenter of marine biodiversity.
• Natural Hazards: Due to its location along the Pacific Ring of Fire, Indonesia is prone to earthquakes, volcanic eruptions, and tsunamis. It is important for visitors to stay informed about any potential hazards and follow local authorities’ instructions.

The geography of Indonesia offers a diverse and picturesque landscape, from towering mountains to pristine beaches, making it a fascinating destination for nature enthusiasts and adventure seekers alike.

Indonesia is a country that attracts millions of tourists each year with its diverse culture, natural beauty, and rich history. The tourism industry in Indonesia plays a significant role in the country’s economy. Here is an introduction to the tourism industry in Indonesia:

Cultural Heritage: Indonesia is home to a vibrant mix of cultures, including Javanese, Balinese, Sumatran, and many more. Tourists are drawn to explore ancient temples, traditional dances, music performances, and local arts and crafts.

Natural Attractions: Indonesia boasts stunning natural landscapes, including pristine beaches, lush rainforests, active volcanoes, and diverse wildlife. Popular natural attractions include Bali’s beaches, Komodo National Park, Borobudur Temple, Mount Bromo, and the Togean Islands.

Adventure Tourism: Indonesia offers numerous opportunities for adventure tourism. Activities such as hiking, trekking, diving, surfing, and whitewater rafting are popular among tourists seeking thrilling experiences in destinations like Raja Ampat, Lombok, Yogyakarta, and Borneo.

Ecotourism: With its rich biodiversity and conservation efforts, Indonesia has become a hub for ecotourism. Travelers can explore national parks, wildlife reserves, and marine protected areas, contributing to sustainable practices and supporting local communities.

Culinary Experiences: Indonesian cuisine is diverse and flavorful, with regional specialties like nasi goreng, rendang, satay, and sambal. Food tourism is popular, and tourists can embark on culinary tours, cooking classes, and street food adventures.

Wellness and Spa Retreats: Indonesia offers a range of wellness and spa retreats, particularly in Bali. Tourists can indulge in traditional massages, yoga classes, meditation retreats, and wellness treatments set amidst serene natural surroundings.

Island Hopping: Indonesia’s vast archipelago provides opportunities for island hopping adventures. Travelers can explore different islands, each with its unique landscapes, cultures, and attractions. Popular island destinations include Bali, Lombok, Java, Sumatra, and the Gili Islands.

Heritage Sites: Indonesia is home to several UNESCO World Heritage Sites, such as Borobudur Temple, Prambanan Temple, Komodo National Park, and Ujung Kulon National Park. These sites attract history enthusiasts and cultural travelers.

Shopping and Souvenirs: Indonesia offers a range of shopping experiences, from bustling markets to modern shopping malls. Tourists can purchase traditional handicrafts, batik textiles, silver jewelry, wood carvings, and other unique souvenirs.

MICE Tourism: Indonesia has also gained prominence as a destination for Meetings, Incentives, Conferences, and Exhibitions (MICE) tourism. The country has modern convention centers and facilities that cater to business and corporate events.

The tourism industry in Indonesia continues to grow, offering a wide range of experiences and attractions for visitors. The government, along with tourism organizations, promotes sustainable tourism practices to preserve the country’s natural and cultural heritage while providing economic opportunities for local communities.

Now lets put things into perspective. Here are some statistics about tourism in Indonesia:

• Tourist Arrivals: In 2019, Indonesia welcomed over 16 million international tourist arrivals, making it one of the most visited countries in Southeast Asia.
• Contribution to GDP: Tourism contributes significantly to Indonesia’s economy, accounting for approximately 6% of the country’s GDP.
• Employment: The tourism sector in Indonesia provides employment opportunities to millions of people, both directly and indirectly. It is estimated that tourism supports around 13 million jobs in the country.
• Top Visitor Countries: The top five countries of origin for tourists visiting Indonesia are China, Malaysia, Australia, Singapore, and India.
• Popular Destinations: Bali is the most popular destination in Indonesia, attracting the majority of international tourists. Other popular destinations include Jakarta, Yogyakarta, Lombok, and Bandung.
• Cultural Tourism: Cultural tourism plays a significant role in Indonesia’s tourism industry. The country is home to numerous cultural attractions, including ancient temples, traditional dances, and unique arts and crafts.
• Ecotourism and Adventure Tourism: Indonesia is known for its diverse natural landscapes and offers opportunities for ecotourism and adventure tourism. Popular activities include diving, hiking, wildlife watching, and exploring national parks.
• Cruise Tourism: Indonesia has been focusing on developing cruise tourism, with several ports of call for cruise ships. Popular cruise routes include Bali, Komodo Island, and Raja Ampat.
• Domestic Tourism: Domestic tourism is also a significant contributor to the tourism industry in Indonesia. Indonesians travel within their own country to explore different regions and enjoy local attractions.
• Tourism Infrastructure: The Indonesian government has been investing in improving tourism infrastructure, including airports, roads, accommodations, and attractions, to enhance the visitor experience and support the industry’s growth.

These statistics highlight the importance of tourism in Indonesia’s economy and the country’s popularity as a tourist destination.

Indonesia offers a wide range of popular tourist attractions that cater to various interests. Here are some of the most renowned attractions in Indonesia:

• Bali: Known as the “Island of the Gods,” Bali is Indonesia’s most popular tourist destination. It offers stunning beaches, vibrant nightlife, lush rice terraces, ancient temples, and traditional arts and culture.
• Borobudur Temple: Located in Central Java, Borobudur Temple is the world’s largest Buddhist temple. It is a UNESCO World Heritage Site and attracts visitors with its intricate stone carvings and panoramic views of the surrounding landscapes.
• Komodo National Park: Situated in the eastern part of Indonesia, Komodo National Park is home to the Komodo dragon, the world’s largest lizard. Visitors can explore the park’s diverse marine life, hike to scenic viewpoints, and witness the unique reptiles in their natural habitat.
• Mount Bromo: Located in East Java, Mount Bromo is an active volcano and a popular destination for adventure seekers. The stunning sunrise views from its summit, the otherworldly landscape of the surrounding Bromo Tengger Semeru National Park, and the opportunity to hike and ride a jeep across the volcanic terrain make it a must-visit attraction.
• Ubud: Nestled in the heart of Bali, Ubud is known for its lush green landscapes, traditional art and crafts, and serene atmosphere. Visitors can explore art galleries, visit ancient temples, experience traditional Balinese dance performances, and enjoy the tranquility of the surrounding rice fields.
• Raja Ampat Islands: Located in West Papua, the Raja Ampat Islands are a paradise for diving enthusiasts. The region boasts stunning coral reefs, crystal-clear waters, and an abundance of marine life, including manta rays and colorful fish species.
• Tana Toraja: Situated in South Sulawesi, Tana Toraja is famous for its unique funeral rituals and traditional houses known as Tongkonan. Visitors can witness elaborate funeral ceremonies, explore traditional villages, and admire the intricate wood carvings that depict the local culture.
• Yogyakarta: Yogyakarta, often referred to as Jogja, is a cultural hub in Java. It is known for its ancient temples, including the UNESCO-listed Prambanan and the magnificent Borobudur. Visitors can also explore the royal palaces, visit art markets, and indulge in traditional Javanese cuisine.
• Gili Islands: The Gili Islands, located off the coast of Lombok, offer a tranquil escape with their pristine beaches, clear turquoise waters, and laid-back atmosphere. These islands are perfect for snorkeling, diving, and enjoying a relaxing beach vacation.
• Jakarta: As Indonesia’s capital city, Jakarta offers a blend of modern and traditional attractions. Visitors can explore historical sites such as Kota Tua (Old Town), visit museums, enjoy shopping in malls, and experience the vibrant city life.

These attractions showcase the diverse landscapes, rich cultural heritage, and natural beauty that make Indonesia a popular destination for travelers from around the world.

Indonesia offers a wide range of tourism experiences that cater to various interests. Here are some of the most popular types of tourism in Indonesia:

• Beach Tourism: With its thousands of islands, Indonesia is famous for its stunning beaches. Bali, Lombok, Gili Islands, and Raja Ampat are just a few of the many destinations that attract beach lovers with their pristine white sands, crystal-clear waters, and opportunities for snorkeling, diving, and water sports.
• Cultural Tourism: Indonesia is rich in cultural diversity, and cultural tourism is a major draw for visitors. Places like Yogyakarta, Solo, and Ubud in Bali offer insights into traditional arts, crafts, music, dance, and local customs. Visitors can witness traditional ceremonies, explore ancient temples, and immerse themselves in the unique cultures of different regions.
• Adventure Tourism: Indonesia’s diverse landscapes provide ample opportunities for adventure tourism. Hiking volcanoes, such as Mount Bromo or Mount Rinjani, trekking through lush jungles, white-water rafting, and surfing are popular activities for adventure enthusiasts. The country also offers opportunities for wildlife spotting, including orangutans in Borneo and Komodo dragons in Komodo National Park.
• Eco-Tourism: Indonesia’s rich biodiversity and natural wonders make it a prime destination for eco-tourism. Visitors can explore national parks like Taman Negara in Sumatra, explore the rainforests of Kalimantan, or venture into the remote areas of Papua to witness unique flora and fauna.
• Wellness and Spa Tourism: Indonesia is renowned for its wellness retreats and spa resorts. Places like Bali and Lombok offer a wide range of wellness experiences, including yoga retreats, meditation centers, traditional healing therapies, and luxurious spa treatments.
• Historical Tourism: Indonesia has a rich history dating back thousands of years, and historical tourism is popular among visitors. Sites like Borobudur Temple, Prambanan Temple, and Sultan’s Palace in Yogyakarta attract history enthusiasts who want to explore the country’s ancient past.
• Culinary Tourism: Indonesian cuisine is diverse and flavorful, making culinary tourism a popular choice. Visitors can indulge in local delicacies such as nasi goreng (fried rice), satay, rendang, and sate lilit. Exploring traditional food markets and taking cooking classes are also popular activities.
• Shopping Tourism: Indonesia offers a vibrant shopping scene, especially in cities like Jakarta and Bandung. Visitors can explore modern malls, traditional markets, and art markets to find unique handicrafts, batik textiles, traditional souvenirs, and fashionable items.
• Religious Tourism: Indonesia is home to various religions, and religious tourism is prominent. From visiting the iconic Borobudur Temple and Prambanan Temple for Buddhist and Hindu pilgrimages to exploring mosques and historic churches, there are religious sites that attract visitors of all faiths.
• Diving and Snorkeling Tourism: Indonesia is part of the Coral Triangle, which is known for its rich marine biodiversity. Diving and snorkeling enthusiasts flock to destinations like Bali, Komodo National Park, Raja Ampat, and the Gili Islands to explore vibrant coral reefs, encounter colorful fish species, and witness manta rays and sea turtles.

These types of tourism showcase the diverse offerings of Indonesia, attracting travelers with varying interests and preferences.

Tourism plays a significant role in the economy of Indonesia, contributing to its GDP, employment, and foreign exchange earnings. Here are some key economic impacts of tourism in Indonesia:

• GDP Contribution: Tourism makes a substantial contribution to Indonesia’s GDP. In 2019, the direct contribution of travel and tourism to the country’s GDP was approximately 5.2%. When considering the indirect and induced impacts, the total contribution of tourism to the GDP was estimated to be around 11.8%.
• Employment Generation: Tourism is a major job creator in Indonesia. The industry provides employment opportunities for various sectors, including hotels, restaurants, transportation, tour operators, travel agencies, and handicrafts. In 2019, travel and tourism supported about 13.8 million jobs, accounting for approximately 10% of total employment in the country.
• Foreign Exchange Earnings: Tourism brings in significant foreign exchange earnings to Indonesia. In 2019, international tourism receipts amounted to around $20.7 billion. This revenue helps improve the country’s balance of payments, supports the local currency, and contributes to economic stability.
• Regional Development: Tourism helps in the development of various regions in Indonesia. Popular tourist destinations, such as Bali, Yogyakarta, and Lombok, receive substantial investments in infrastructure, accommodation, and services. This development spreads economic benefits beyond major cities and contributes to the growth of local economies.
• Small and Medium Enterprises (SMEs): Tourism provides opportunities for small and medium-sized enterprises to thrive. Local businesses, such as homestays, restaurants, handicraft producers, and tour operators, benefit from the demand generated by tourists. This promotes entrepreneurship, empowers local communities, and supports sustainable economic growth.
• Infrastructure Development: The growth of tourism in Indonesia has led to infrastructure development. Airports, roads, ports, and other transportation facilities have been expanded and improved to accommodate the increasing number of tourists. This infrastructure development not only enhances the tourism experience but also benefits other sectors of the economy.
• Investment Opportunities: The tourism industry attracts both domestic and foreign investments, driving economic growth and diversification. Investments are made in hotels, resorts, entertainment facilities, eco-tourism projects, and transportation infrastructure. These investments create employment opportunities, generate revenue, and stimulate economic activities in the related sectors.
• Income Distribution: Tourism in Indonesia contributes to income distribution by generating employment and income opportunities for local communities. Revenue generated from tourism activities can have a multiplier effect, as it circulates within the local economy through spending on goods and services. This helps improve the standard of living and reduces income inequalities.
• Cultural Preservation: Tourism in Indonesia often promotes the preservation of cultural heritage and traditional practices. Communities with unique cultural attractions benefit from tourism, as it encourages the preservation and promotion of their customs, arts, crafts, and traditional performances. This not only helps sustain cultural identity but also provides economic incentives for cultural preservation efforts.
• Diversification of Economy: The tourism industry contributes to the diversification of Indonesia’s economy. It reduces dependence on specific sectors and creates alternative sources of income. This diversification strengthens the overall resilience of the economy and reduces vulnerability to external shocks.

It is important to note that the COVID-19 pandemic has significantly impacted the tourism industry worldwide, including Indonesia. The full extent of its impact on the economic contributions of tourism in Indonesia is still being assessed, and recovery efforts are underway to revive the sector.

Tourism in Indonesia has several social impacts that influence local communities, cultural preservation, and social dynamics. Here are some key social impacts of tourism in Indonesia:

• Cultural Exchange: Tourism in Indonesia facilitates cultural exchange between visitors and local communities. Tourists have the opportunity to experience Indonesia’s rich cultural heritage, traditions, and customs. This interaction fosters mutual understanding, appreciation, and respect for diverse cultures.
• Preservation of Cultural Heritage: Tourism in Indonesia often plays a vital role in preserving cultural heritage. Popular tourist destinations in Indonesia, such as Borobudur Temple, Prambanan Temple, and traditional villages, receive conservation efforts and financial support due to their cultural significance. Tourism revenue helps maintain and protect cultural sites, arts, crafts, and traditional practices.
• Community Empowerment: Tourism in Indonesia provides income and employment opportunities for local communities. Small-scale businesses, homestays, local guides, and artisans benefit from the demand created by tourists. This economic empowerment enhances the quality of life, improves infrastructure, and supports community development initiatives.
• Awareness of Environmental Conservation: Tourism in Indonesia can raise awareness about environmental conservation. Many tourist attractions in Indonesia are natural wonders, such as Komodo National Park, Taman Negara Gunung Leuser, and Raja Ampat. Visitors, through guided tours and educational programs, learn about the importance of preserving natural resources, ecosystems, and wildlife habitats.
• Infrastructure Development: Tourism development often leads to improved infrastructure in local communities. Airports, roads, accommodations, and public facilities are upgraded to cater to the needs of tourists. This infrastructure development benefits not only tourists but also local residents, improving their access to services and enhancing their overall living conditions.
• Cultural Revitalization: Tourism in Indonesia can contribute to the revitalization of traditional cultural practices. Local communities may revive traditional dances, music, handicrafts, and rituals to showcase their cultural heritage to visitors. This revitalization helps preserve and promote cultural traditions that may have otherwise declined over time.
• Education and Awareness: Tourism provides educational opportunities for local communities. Visitors often show interest in learning about the local culture, history, and traditions. This encourages local communities to share their knowledge and traditions, leading to the preservation and transmission of cultural knowledge across generations.
• Pride in Local Identity: Tourism in Indonesia can instill a sense of pride in local communities. Recognizing the value and appeal of their own cultural heritage, communities may take pride in preserving and showcasing their traditions, resulting in increased self-esteem and cultural identity.
• Social Integration: Tourism in Indonesia can foster social integration by bringing together people from different backgrounds. Visitors and locals interact, exchange ideas, and share experiences, contributing to social cohesion and understanding.
• Community-Based Tourism Initiatives: Community-based tourism initiatives empower local communities to participate actively in tourism development. These initiatives ensure that the benefits of tourism are distributed more equitably, allowing communities to have a voice in decision-making, preserving their cultural heritage, and maintaining control over their resources.

While tourism in Indonesia brings numerous social benefits, it is important to manage its impacts responsibly to avoid negative social consequences such as over-commercialization, cultural commodification, and social inequalities. Sustainable tourism practices that involve local communities and respect their traditions and values are crucial for maximizing the positive social impacts of tourism in Indonesia.

Tourism in Indonesia, like in many other countries, has both positive and negative environmental impacts. Here are some key environmental impacts of tourism in Indonesia:

• Natural Resource Consumption: Tourism in Indonesia places demands on natural resources such as water, energy, and land. Increased tourist arrivals often lead to higher water consumption, increased energy usage for accommodation and transportation, and land development for hotels, resorts, and infrastructure. This can strain local resources and put pressure on ecosystems.
• Waste Generation: The tourism industry generates significant amounts of waste, including plastic, packaging, food waste, and other disposable items. Improper waste management and disposal practices can lead to pollution of water bodies, soil, and air, impacting the natural environment and ecosystems.
• Loss of Biodiversity and Habitat Degradation: Popular tourist destinations in Indonesia often include natural areas, such as rainforests, coral reefs, and marine ecosystems. Increased tourism activities can lead to habitat destruction, deforestation, and loss of biodiversity. Unsustainable practices like overfishing, improper waste disposal, and unregulated development can degrade natural habitats and harm wildlife populations.
• Pollution and Carbon Emissions: Tourism-related activities contribute to pollution, including air and water pollution. Transportation, especially air travel, generates greenhouse gas emissions that contribute to climate change. Water pollution can occur through wastewater discharge from accommodations and recreational activities, impacting marine ecosystems and coral reefs.
• Deforestation and Land Conversion: Tourism development can lead to deforestation and land conversion for hotels, resorts, and infrastructure projects. This can result in the loss of valuable forest ecosystems, disrupt wildlife habitats, and contribute to soil erosion and land degradation.
• Coral Reef Damage: Indonesia is known for its stunning coral reefs, which attract divers and snorkelers. However, irresponsible diving practices, anchoring, and the use of harmful chemicals for sunscreen can cause damage to coral reefs, affecting their health and biodiversity.
• Water and Coastal Erosion: Increased tourism activities and infrastructure development along coastlines can contribute to water erosion and coastal degradation. Beach erosion, loss of sand dunes, and alteration of natural sediment patterns can impact coastal ecosystems and diminish the aesthetic value of the area.
• Water Pollution from Tourism Activities: Recreational activities such as boating, swimming, and snorkeling can introduce pollutants into water bodies, including oil spills, sewage discharge, and litter. These pollutants can harm aquatic life, coral reefs, and water quality.
• Pressure on Protected Areas: Indonesia has many protected areas, including national parks and reserves. High visitor numbers and inadequate management can result in increased pressure on these fragile ecosystems, leading to habitat disturbance and wildlife stress.
• Cultural and Heritage Impact: Increased tourism can put pressure on cultural and heritage sites, leading to overcrowding, erosion of traditional practices, and loss of authenticity. Uncontrolled tourism development can disrupt local communities and their way of life.

It’s important to note that many efforts are being made in Indonesia to promote sustainable tourism practices and minimize the negative environmental impacts of tourism in Indonesia. This includes implementing waste management programs, promoting eco-friendly accommodations, educating tourists about responsible behavior, and supporting conservation initiatives. Responsible tourism practices and awareness are essential for protecting Indonesia’s diverse ecosystems and preserving its natural beauty for future generations.

Now that we know a bit more about tourism in Indonesia, lets answer some of the most common questions on this topic:

Sure! Here are 10 frequently asked questions about tourism in Indonesia along with their answers:

What is the best time to visit Indonesia?

The best time to visit Indonesia is during the dry season, which generally falls between April and October. However, the specific ideal time to visit may vary depending on the region you plan to explore.

What are the must-visit destinations in Indonesia?

Some popular destinations in Indonesia include Bali, Jakarta, Yogyakarta, Komodo National Park, Borobudur Temple, Mount Bromo, and Raja Ampat.

Do I need a visa to visit Indonesia?

It depends on your nationality. Many countries are eligible for visa-free entry or visa on arrival, allowing visitors to stay for a certain period. However, some nationalities may require a visa in advance. It’s recommended to check the visa requirements for your specific nationality before traveling.

What is the currency of Indonesia?

The currency of Indonesia is the Indonesian Rupiah (IDR). It’s advisable to carry local currency for convenience, although major tourist areas also accept major credit cards.

Is it safe to travel in Indonesia?

Overall, Indonesia is considered a safe destination for tourists. However, it’s always important to take general safety precautions, such as being aware of your surroundings, avoiding isolated areas at night, and taking necessary precautions against theft.

What are some traditional Indonesian dishes I should try?

Some popular Indonesian dishes to try include nasi goreng (fried rice), satay, rendang (spicy beef stew), gado-gado (vegetable salad with peanut sauce), and nasi padang (rice with various side dishes).

Is it necessary to get vaccinations before traveling to Indonesia?

It’s recommended to consult with a healthcare professional or travel clinic to get the necessary vaccinations and medical advice based on your travel plans and personal health history. Common vaccinations include Hepatitis A, Typhoid, and Tetanus.

Can I drink tap water in Indonesia?

It’s generally advisable to drink bottled or filtered water in Indonesia to avoid any potential health risks. Bottled water is widely available and affordable.

Are there any cultural customs or etiquette I should be aware of?

Indonesian culture values politeness and respect. It’s advisable to dress modestly, especially when visiting religious sites, and to ask for permission before taking someone’s photo. Learning a few basic Indonesian phrases can also be appreciated by the locals.

What are some popular water activities in Indonesia?

Indonesia offers various water activities such as snorkeling, scuba diving, surfing, and island hopping. Popular spots include Bali, Gili Islands, and Komodo National Park.

Indonesia’s rich tapestry of islands offers a captivating blend of cultures, landscapes, and historical wonders. From the bustling streets of Jakarta to the serene beaches of Bali, the archipelago promises diverse and unforgettable experiences. If you enjoyed this article, I am sure you will like these too:

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Travel and tourism in Indonesia - statistics & facts

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• Premium Statistic Quarterly change in international tourism receipts COVID-19 in Indonesia 2022
• Premium Statistic Monthly number of international visitor arrivals Indonesia 2020-2023
• Premium Statistic International tourism receipts during the COVID-19 pandemic in Indonesia Q4 2022
• Premium Statistic Monthly change in international tourist arrivals due to COVID-19 Indonesia 2020-2022

Quarterly change in international tourism receipts COVID-19 in Indonesia 2022

Quarterly change in international tourism receipts during the novel coronavirus (COVID-19) pandemic in Indonesia in 2022

Monthly number of international visitor arrivals Indonesia 2020-2023

Number of international visitor arrivals in Indonesia from January 2020 to March 2023 (in 1,000s)

International tourism receipts during the COVID-19 pandemic in Indonesia Q4 2022

International tourism receipts during the novel coronavirus (COVID-19) pandemic in Indonesia as of 4th quarter in 2022 (in thousand U.S. dollars)

Monthly change in international tourist arrivals due to COVID-19 Indonesia 2020-2022

Monthly change in international tourist arrivals during the novel coronavirus (COVID-19) pandemic in Indonesia as of December 2022

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May 12, 2021

High-end tourism in Indonesia fails to empower local people during pandemic

by Chloe King, The Conversation

The COVID-19 pandemic has wreaked havoc on the travel and tourism industry globally. Indonesia is no exception.

The tourism industry in the country with the fourth-largest population in the world has slowed down during the pandemic.

Foreign arrivals dropped by 75% from 16.11 million in 2019 to just 4.02 million in 2020 . This was a hard blow to a tourism economy that supplied 5.7% of the country's gross domestic product and provided 12.6 million jobs in 2019 .

To revive the industry, the Indonesian government has launched a new approach to promote high-end tourism .

High-end tourism is meant to combat the often unsustainable growth in mass tourism. It attracts fewer tourists who spend more on luxury trips than typical mass tourism experiences. In theory, this reduces environmental impacts while increasing economic benefits .

Our latest research in Wakatobi National Park, an area of immense marine biodiversity spread across four main islands in Southeast Sulawesi province, demonstrates the limitations of high-end tourism development.

While it may offer some conservation benefits, its inherently high price tag means it caters to the most privileged sectors of society, while the local political elite accrue the profits.

Tourism development must do more to focus on providing benefits for communities beyond just financial gains. It should support local communities to increase their skills and knowledge to equip them to be resilient to crises and economic shocks.

Unsustainable travel experiences

Our six-month research effort compared high-end, volunteer-based and community-based tourism operating in the marine-rich Wakatobi National Park. The aim was to see which form of tourism development best equipped communities to respond to crises like COVID-19.

Wakatobi National Park is part of a government initiative to develop "high-quality" tourism destinations across the country through its so-called "10 New Balis" program. This effort aims to accelerate tourism development in 10 new destinations beyond the country's top tourist destination, Bali.

According to interviews with the regional tourism office in Wakatobi, the local government has set a goal of increasing visitor numbers from 20,000 to 100,000 by 2025 by focusing on high-end tourism development.

Wakatobi National Park was designated as a national park in 1996 and covers an area of 13,900 square kilometers. The park has two foreign-owned dive operators on the islands of Tomia and Hoga, with local homestay operators proliferating throughout the park.

A high-end dive operator in the national park offered a valuable case study in exemplifying how exclusive and expensive tourism development has left communities less resilient and ill-prepared to face a crisis.

Guests pay between US$300 and US$1,000 per person for a single night stay. The operator is able to use these fees to pay each village around Tomia (17 in total) between Rp 1.25 and 7 million (about US$85-475) each month in exchange for halting destructive fishing practices and avoiding fishing on 30 kilometers of reef, including a no-take zone. Local dive operators cannot take guests on or near the resort's reef.

While this has significantly protected and improved natural resources and financial capital, local fishers and dive operators alike lost agency and ability to use the reefs.

Additionally, other respondents noted that the payments did not reach the community directly. The Badan Permusyawaratan Desa (BPD), considered the "parliament" of local villages in Indonesia's new era of regional autonomy, controls the money.

Respondents felt they did not have a say in how the BPD spends the money it receives from the high-end dive operators.

Respondents alleged it benefited the local "political elite" in the BPD as the politicians spend the money based on "their will, not the will of society."

"What [the high-end operator] does is right, with their regulations and money, but they have a greater responsibility to society. Society does not need the money, we need the skills. If they just give money, it will only benefit the political elite," one respondent said.

Due to the exclusive and closed-off nature of the resort, guests rarely interact with the local community. This was frequently cited as a point of frustration.

Intercultural exchange and informal interaction facilitated through home-stay operators help to increase human capital and community skills. With high-end resorts, this interaction is rare.

Furthermore, no local people from the national park had been trained as dive guides during the 25 years the foreign operator was in business. Few respondents were able to identify opportunities for upward mobility and skills training for local staff.

Such tourism development is reminiscent of colonialist structures that pervade Indonesia to this day, through the acquiescence of rural elites to extract profits and control resources, whether through exploitation or today's modern modes of conservation.

Tourism for all

High-end dive tourism models, where marine reserves are privately financed and enforced, may have led to critical and obvious gains in marine biodiversity and conservation success.

Misool in Raja Ampat, in the most eastern island of Indonesia, is another example of an area that has seen substantial biodiversity benefits . The total biomass of the marine reserve increased by 250% over just six years due to a similar luxury tourism model.

However, for whom are these resources being conserved? What is being made to be resilient, and why? Suppose the answer is to drive future tourism growth, limited to those wealthy enough to provide and access such "high-quality" tourism experiences. In that case, we must return to view the crisis at hand.

With tourism at a standstill for more than a year, local communities have been left to face the consequences without opportunities to increase their skills and knowledge, which would have helped ensure their resilience to such a crisis.

Emerging into a post-COVID-19 landscape, where climate change threats loom large in the communities where tourism once boomed, tourism must first and foremost be developed with local communities in mind.

As one respondent said in a focus group discussion: "[People from capital] Jakarta wants to develop only high-end tourism, but I don't agree. Tourism should be for everyone to come, not just the rich."

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Technology can bring more tourists back to Indonesia – but first we need a map to guide us

Interaction Designer, University of Technology Sydney

Disclosure statement

Ainnoun Kornita terafiliasi dengan Kementerian Pariwisata dan Ekonomi Kreatif. Saya bekerja di organisasi tersebut.

University of Technology Sydney provides funding as a founding partner of The Conversation AU.

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In 2020, the COVID-19 pandemic hit the world and has been devastating for human life. Global tourism collapsed as tourist arrivals decreased by 71% in 2021 .

That has had a significant impact in countries like Indonesia, where tourism was booming pre-pandemic : tourism generated Rp536.8 trillion in 2017 , or 4.1% of Indonesia’s total gross domestic product, with 12.7 million jobs in the industry.

However, digital technology adoption has been an unexpected silver lining of the pandemic, emerging as a tool that can help accelerate tourism recovery worldwide. It shifts tourist preferences and priorities towards digital travel. It also presents new business opportunities in offering more relevant online experiences.

More tourism activities now offer hybrid events, particularly for music festivals, concerts and business meetings. Virtual reality and augmented reality (VR/AR) provide a new travel experience, and have been adopted by hotels, destinations and online travel marketplaces all over the globe.

There is, however, a challenge in technology adoption to support tourism in Indonesia: its comparatively low information and communication technology (ICT) readiness.

According to a May 2022 World Economic Forum report, Indonesia was ranked 68th in 2020 in its ICT readiness. This ranking was based on the expansion of individual internet usage and 3G mobile broadband network coverage in each country.

While Indonesia’s ranking had slightly increased from 70th in 2019, it was behind Singapore, Malaysia, Thailand, and Vietnam.

The use of digital platforms for financial services, transportation and shipping and leisure activities in Indonesia are slow, and should be a subject for improvement.

From dreaming to sharing, tech can help tourists

One study emphasises how technology needs to be a catalyst to create meaningful tourism experiences.

The tourist experience is the backbone of business success, as it drives people to make travel decisions.

The key to enhancing this experience is understanding how tourists make travel decisions through different travel stages: from dreaming, planning, booking, and experiencing, to sharing.

Using technology to improve the tourism experience throughout all travel stages is critical. Technology helps connect tourism supply and demand, creating physical and virtual experiences. It enables tourism providers to maintain competitiveness in the market. Tourists also use technology to plan their trips, experience destinations and reflect on their travels to obtain satisfaction.

Several technologies that shape the tourism experience include Big Data , cloud computing , VR/AR, blockchain, artificial intelligence, social media, gamification and the internet of things .

For example, the Skyscanner chatbot on Facebook or Whatsapp assists with travelling needs, from digging out information to offering fast responses during the booking process. In another example, Iceland has upgraded Keflavik Airport’s automated baggage tracking system to alert travellers when their baggage is nearby.

Advanced technology creates value throughout tourism experiences by providing choices and convenience, flexibility, safety, fun and enjoyment, and real-time, reliable information. As a result, tourists have more options and flexibility in every stage of their travel journey: from acquiring information, planning an e-itinerary, booking and purchasing flights or hotels online, to sharing their experiences.

Opportunities and challenges for Indonesia

Indonesia has a large population, growing mobile internet penetration and a vibrant start-up ecosystem, with the most growth recorded in e-commerce and online transportation. All of those factors demonstrate Indonesia’s potential for adopting advanced technology.

But Indonesia must also catch up to other countries in capturing its digital potential. The inequality of ICT infrastructure between regions and income classes has become the main barrier to the accessibility of good quality internet.

Moreover, digital literacy – especially on safety – is low and needs improvement .

A World Bank report shows digital payment adoption is relatively low, with 50% of Indonesian online buyers preferring to pay cash on delivery.

The lack of awareness, knowledge and trust, regulation and appropriate infrastructure curb e-commerce growth in Indonesia.

Such conditions could hinder the success of the Indonesian tourism industry, as it needs to maintain competitiveness amid growing digital demands. Without advanced technology, the tourism industry will not thrive in the ever-changing global market.

A map for the future

The Indonesian government needs a map to design digital strategies that match with tourists’ expectations and needs. The map would present tourists’ experiences, including their interactions with the most relevant digital touchpoint in every travel stage (from dreaming to sharing).

Such a map could address digital tourism challenges, and help the tourism industry offer a frictionless, seamless, and better-quality tourism experience.

The map could also raise awareness among tourism stakeholders about the current digital technology in Indonesia and tourism in particular.

Areas that the Indonesian government could focus on to provide the best digital services include:

• improving digital government services in the tourism sector
• utilising digital strategies for promoting tourism
• adopting data integration and interoperability in the tourism sector
• investing in digital literacy for tourism industry workers
• more research and development for technology adoption in the tourism sector
• enhancing digital services for businesses, and
• simplifying, updating and revising policies and regulations related to digitalisation in the tourism sector.

Implementing the action plans above could accelerate digital transformation in Indonesia’s tourism industry. In doing so, it would increase the quality of tourism services on offer for people interested in visiting Indonesia.

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Negative Impacts of Tourism in Bali: A Comprehensive Guide

In this article, we explore the negative impacts of tourism in Bali, such as environmental issues and effects on equality, as well as touching on some of the positive consequences of tourism.

By Victoria Heinz, of www.guideyourtravel.com All images courtesy of Victoria Heinz

Have you ever dreamed of visiting the beautiful beaches and temples of Bali? This Balinese paradise is a popular tourist destination for many travellers, however it’s important to be aware that tourism may have its drawbacks.

In this article we will examine some of the negative impacts that travel in Bali can have on both the people and environment. From increased infrastructure problems to waste management issues – it pays to do your research before planning a trip, especially if you’re planning to visit popular areas like Uluwatu or Canggu. So read on to find out more about these potential pitfalls and how you can make conscious choices while enjoying Bali!

As any traveller to Indonesia is aware, the country is brimming with lush nature and unique wildlife. It’s a paradise for anyone looking to explore or escape in its natural beauty. However, beneath the surface lies an environmental crisis facing Indonesia today that demands action from both local and international travellers alike.

Table of Contents

Overview of Indonesia’s Current Environmental Situation

Indonesia is currently facing a significant environmental challenge. The rapid expansion of industries such as mining, agriculture, and forestry has resulted in deforestation, soil degradation, and air pollution. Additionally, the country’s coastline and marine life have been heavily impacted by plastic waste pollution.

The government has made some strides in addressing these issues by implementing policies and programs aimed at conserving the environment, such as reducing greenhouse gas emissions and promoting sustainable agriculture . However, much more needs to be done to protect Indonesia’s vast natural resources for future generations .

The Most Pressing Environmental Issue in Indonesia – Deforestation and Land Conversion

Indonesia is facing a critical environmental issue that requires immediate attention – deforestation and land conversion. As one of the most biodiverse countries in the world, Indonesia’s forests are home to countless species of flora and fauna. However, rampant deforestation for agriculture, logging, and mining activities is causing irreversible damage to these precious ecosystems.

This not only affects the environment but also the livelihoods of local communities and indigenous peoples who rely on these forests for survival. The scale of deforestation in Indonesia is staggering, making it an urgent concern that must be addressed to ensure the sustainability of the country’s natural resources and the well-being of its people.

What are the Negative Impacts of Tourism in Bali?

• Overcrowding Issues

As our world becomes more connected and travel becomes easier, more people are flocking to popular tourist destinations. Unfortunately, this influx of visitors has led to a host of overcrowding issues.

Certain areas simply aren’t equipped to handle the sheer volume of people, leading to increased pollution, traffic congestion, and unsustainable practices. It’s heartbreaking to see natural wonders like the beaches in Uluwatu and national parks in northern Bali overrun with tourists, leaving trails of litter and damage in their wake.

The challenge now is finding ways to balance the economic benefits of tourism with the need to preserve these destinations for future generations to enjoy. Can we encourage sustainable tourism practices and limit the number of visitors to these sensitive areas? It’s a difficult question to answer, but it’s one that we must grapple with if we hope to protect these precious resources.

• Environmental Damage

As more and more people travel to exotic destinations, the impact on local ecosystems cannot be underestimated. While tourism can provide much-needed economic stimulus to an area, it can also lead to environmental damage if visitors are not conscientious.

Sun tanning on coral reefs can actually bleach and kill these delicate structures, while littering can overwhelm local sanitation systems and pollute waterways. This is especially a problem in southern Bali and neighbouring islands like Flores . It is important for tourists to understand the impact of their actions on the environment and to take steps to minimise their footprint while still enjoying all the beauty and wonder that our planet has to offer.

• Loss of Traditional Cultural Practices

Balinese culture has always been a source of pride and identity for its people. However, with the rise of tourism in recent years, the influx of foreign visitors has brought significant changes to traditional cultural practices.

While tourism has brought economic benefits to the Balinese people, it has also resulted in some traditional practices becoming lost or forgotten. Sadly, many younger Balinese generations do not have the same appreciation or understanding of their cultural heritage as their elders do.

It’s important for us to remember that preserving these customs and traditions is vital in maintaining the unique identity of the Balinese people. The loss of these practices can result in the homogenization of cultures worldwide, which would be a great shame.

• Increase in Prices

As the economy grows, so does the demand for goods and services. However, this surge in demand has also brought with it a rise in prices. Unfortunately, this means that many locals may find it increasingly difficult to afford necessities such as housing, food, and healthcare.

While it’s great to see our economy thriving, it’s important to ensure that no one is left behind. We must work together to find solutions that allow everyone in our community to access the goods and services they need to lead happy and healthy lives.

• Economic Inequality

Economic inequality has become a growing concern in many places around the world, especially in areas like Bali where wealthy tourists flock for their vacations. The trend of these travellers outbidding local residents for available housing and properties has been on the rise, leading to an ever-widening gap between the two groups.

This inequality can have devastating consequences, such as pushing out long-time residents and making it nearly impossible for them to find affordable housing. As a result, locals are left at a significant disadvantage compared to those who have more financial resources.

• Negative Impact on Local Economy

Tourism has undoubtedly provided financial benefits to Bali, but the extent of these gains is debatable. Unfortunately, much of the wealth generated is not finding its way into the hands of local businesses and individuals, which is concerning.

Instead, multinational companies appear to be reaping most of the rewards. This has created a negative impact on the local economy, as Bali is becoming increasingly reliant on outside businesses for revenue.

As a result, the Balinese are struggling to keep their businesses afloat, which can have significant consequences for the island’s overall economic stability. It is vital that Bali’s tourism industry takes a more balanced approach to ensure that both local businesses and multinational corporations benefit from the tourism boom.

What are Three Positive Consequences of Tourism in Bali?

The effects of tourism aren’t all bad and it’s important to recognise the positive impacts as well as the negative ones.

• Boosting Economic Growth

Bali has been experiencing a significant economic growth boost thanks to the surge in tourism. The influx of visitors has brought in tremendous revenue to the local economy, allowing the region to invest heavily in various infrastructure projects.

The island now boasts modern facilities, high-end accommodations, and top-notch dining options, attracting even more tourists to this vibrant location. With the expansion of new attractions, Bali’s economy shows no signs of slowing down, and the local market continues to thrive. There is no denying that tourism has become a crucial driver of economic growth in Bali, bringing with it endless opportunities for progress and development.

• Creating Job Opportunities

Not only does tourism in Bali provide people with a chance to explore new places and cultures, but it also generates job opportunities for locals. The impact of tourism is particularly profound in rural areas where employment options are scarce.

By providing direct jobs such as tour guides, hotel staff, and drivers, as well as indirectly creating jobs through the demand for local products and services, tourism plays a vital role in sustaining local economies.

• Spreading Cultural Awareness

As tourists flock to new destinations, they bring with them a desire to experience the local culture, to see and understand what makes a place unique. This desire to learn creates opportunities for locals to share their traditions, arts, and crafts with a broader audience, enabling a cultural exchange that benefits everyone involved.

Through tourism, visitors gain a deeper appreciation for the local way of life, while locals are able to showcase the best of their communities and preserve their cultural heritage. It’s a win-win scenario that enhances local culture while creating lasting connections between people from around the world.

About the Author

Victoria is a travel blogger and writer from Germany who now calls Bali her permanent home. She works full-time on her two travel blogs www.guideyourtravel.com  and www.myaustraliatrip.com  and her sites aim to provide helpful and realistic travel advice.

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In the spirit of reconciliation Unsustainable Magazine acknowledges the Traditional Custodians of country throughout Australia and their connections to land, sea and community. We pay our respect to the Elders past and present and extend that respect to all Aboriginal and Torres Strait Islander peoples today.

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International Handbook of Disaster Research pp 2413–2424 Cite as

Tourism Industry and the COVID-19 Pandemic: A Case Study in Indonesia

• Huong Ha 2 &
• Timothy Wong 3  
• Reference work entry
• First Online: 01 October 2023

46 Accesses

The COVID-19 pandemic of 2020–2021 has devastated most economies. According to the latest forecast by International Monetary Fund ( 2020 ), a 5.4% contraction in global GDP in 2021 was projected. The global economy had been badly hit, as global trade declined and tourism was brought to a halt. With the shrink in the global economy and expected harsh conditions, Indonesia had reduced its 2020 GDP growth outlook to 2.3%, down from 5.3%. Indonesia is well-known among tourists for its iconic landscape and distinctive culture of both its big islands, such as Java and Sumatra, as well as small islands such as Komodo Island, Lombok, and Wakatobi Island. This main attraction had brought about significant growth in tourism in these islands over the years. However, with an escalating number of COVID-19 cases and related deaths being reported in Indonesia, the country’s immediate priority would inevitably be to mitigate the impact of the pandemic.

Thus, this chapter aims to shed light on the strategies adopted by the tourism industry in Indonesia as well as the experiences it has encountered during the COVID-19 pandemic and seeks to explore how the industry could recover from this difficult circumstance. The preliminary findings reveal that there is an increasing need for the government to improve the business environment by having proper policies and putting in place effective mechanisms for coordinating nationwide efforts to enable speedy recovery for a more resilient and sustainable tourism workforce.

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Ha, H., Wong, T. (2023). Tourism Industry and the COVID-19 Pandemic: A Case Study in Indonesia. In: Singh, A. (eds) International Handbook of Disaster Research. Springer, Singapore. https://doi.org/10.1007/978-981-19-8388-7_166

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Navigating the Pitfalls Understanding the Negative Impacts of Tourism in Indonesia

Indonesia , with its mesmerizing beauty and warm hospitality, has long been a traveler’s paradise . But as the tourism industry continues to flourish, it’s essential to take a closer look at the not-so-sunny side of the picture. In this article, we’ll delve into the less-talked-about but crucial topic: the negative impacts of tourism in Indonesia . By understanding these challenges, we can work towards a more sustainable and responsible way of exploring this stunning archipelago.

Environmental Consequences

Overdevelopment and Habitat Destruction

The allure of Indonesia’s natural landscapes has led to rapid development in tourist hotspots . While this brings convenience, it often comes at the expense of pristine environments. Lush forests give way to resorts, and untouched beaches transform into crowded shorelines. The result? A loss of biodiversity and natural beauty that initially attracted visitors.

As tourists flock to Indonesia , the environmental footprint grows. Air, water, and noise pollution become significant concerns in heavily frequented areas. The marine ecosystems suffer too, with coastal areas bearing the brunt of marine pollution. Trash and debris endanger marine life and disrupt fragile ecosystems, creating a detrimental ripple effect.

Deforestation

Tourism’s demand for infrastructure often leads to deforestation, impacting Indonesia’s wildlife habitats. Logging and land clearance for hotels, resorts, and roads destroy critical ecosystems. Wildlife loses their homes, and these pristine areas are forever altered.

Cultural Disruption

Loss of Cultural Authenticity

While tourism brings economic benefits, it can erode the authenticity of local cultures. Commercialization and the quest for mass appeal can homogenize indigenous traditions, robbing them of their uniqueness. The charming villages and their way of life that initially drew travelers may slowly disappear in the face of globalized tourism.

Social and Economic Inequality

Tourism’s impact isn’t always evenly distributed. While some benefit, others face economic hardships. Income disparities can widen as tourism generates jobs with varying pay scales. Gentrification, driven by tourist demands, can push out local communities, further perpetuating inequality.

Erosion of Traditions

Indonesia’s rich tapestry of traditions is at risk of unraveling. As tourism takes center stage, traditional practices can fade into obscurity. The lure of modernization and economic opportunities can pull younger generations away from their cultural roots, leading to the loss of time-honored customs.

Strain on Infrastructure

Overcrowding

Indonesia’s popularity as a tourist destination can result in overcrowding, particularly in iconic locations. Overwhelmed by the sheer number of visitors, these destinations can lose their charm. Infrastructure struggles to cope, leading to congestion and inconvenience.

Environmental Degradation

With more tourists come increased waste, putting pressure on waste management and sewage systems. Improper disposal can lead to environmental degradation, impacting local ecosystems and water quality. The paradise that travelers seek can be marred by the very presence of tourists.

Increased Cost of Living

The demand for accommodations and services from tourists can drive up property prices. This, in turn, raises the cost of living for locals, making it increasingly challenging for them to afford homes in their own communities. This phenomenon can create resentment and further exacerbate social issues.

Economic Dependency

Vulnerability to External Factors

Indonesia’s heavy reliance on tourism leaves it vulnerable to economic fluctuations and global events. Natural disasters, political instability, and health crises like the COVID-19 pandemic can have severe consequences on the tourism industry, leading to economic hardships.

Leakage of Tourism Revenue

While tourism generates substantial revenue, a significant portion of it may not benefit local communities. Foreign-owned businesses often repatriate profits, leaving only a fraction of the economic benefits within Indonesia . This leakage limits the positive impact of tourism on local economies.

Understanding the negative impacts of tourism in Indonesia is the first step towards more responsible and sustainable travel. As travelers, we have a role to play in minimizing these adverse effects. Supporting local businesses, respecting local cultures, and advocating for responsible tourism practices can help preserve Indonesia’s natural beauty , cultural heritage, and economic stability. By being conscientious travelers, we can ensure that future generations can enjoy the wonders of Indonesia without compromising its integrity.

All Destinations , Asia , Indonesia

The impacts of tourism in bali.

I’ve got a love-hate relationship with Bali. On one hand, it’s a beautiful island with amazing scenery, lovely locals and an intriguing Hindu culture. On the other, it’s suffocatingly touristy, can feel very inauthentic and has some real problems that are arguably worsened by mass tourism.

Bali has spectacular sunsets and gorgeous views, but it is arguable that a) you’ll be sharing your experience with thousands of other tourists and b) that the way tourism in Bali is set up inadvertedly negatively impacts people there, even if it is not meant to.

Now, I’m not against tourists in Bali – I was a tourist in Bali, after all. I’m against the way tourism in Bali is executed, which has caused a beautiful island to become a tourist trap. After spending five weeks in Bali, I saw some amazing sights. I climbed up Mount Batur, snorkeled in Nusa Penida and explored the rice fields of Ubud and Canggu.

However, I still felt kind of uncomfortable there. Because a lot of the time, you can’t escape the mass tourism of the island, and as a responsible traveler , it left me thinking about the real impact that I had by being there.

The Positive Impacts of Tourism in Bali

Tourism has brought a lot more jobs to the island, many of which are paid better than other opportunities. Balinese employment is now varied, with some people opting to own guesthouses and others doing their own tours of the island. Generally, most Balinese people I spoke to were optimistic about tourism because of the range of employment options that are now available to them. Many Balinese and other Indonesian people have moved to the tourist hotspots to work and send money back to their families.

Economic Advantages

Tourists bring money, and when it’s spent in the right place, it helps the Balinese economy. Because many tourists to Bali are in ‘holiday mode’, they’ll often spend a sizable amount on food, drinks, and shopping. When spent in the right places, this helps the individuals who run the restaurants, guesthouses cafes, etc. Furthermore, as their money is often spent within Bali it strengthens the economy of the island and Indonesia as a whole.

Meeting Foreigners and Sharing Cultures

Globalisation is both good and bad. In a positive light, tourism to Bali has helped locals learn about other countries and has opened them up to the possibilities of remote or international work. Meeting people from all over the globe has amazing advantages, as we can all learn from each other in so many ways, and many people in Bali who aren’t even in the travel industry are now doing a different job, thanks to tourism.

The Negative Impacts of Tourism in Bali

Even without the growing westernization of Bali, it is crazily busy. Bali has a huge population anyway, and then when you take into account the thousands of tourists who descend on the island each year and Indonesians who have moved to the island to work in the tourist industry, you’ve got an island that’s about to sink.

Busyness isn’t something that many people favour when they want a beach break and yes, sometimes you’ll struggle to get a good spot on some of the busier beaches in Bali. But overpopulation has some bigger concerns, especially in places as small as Bali. More people means more traffic (it once took me an hour to drive five kilometres), more development – which can affect the environment – and sadly, more rubbish.

Plastic Pollution

It is no secret that Indonesia has a plastic problem . Not much on the island gets recycled, and because everywhere is so close to the sea, that’s where it ends up – very quickly. It’s easy to forget about the huge plastic crisis that the world is experiencing when we’re offered a straw or a plastic bag – but when visiting Bali or anywhere else in the world (particularly coastal destinations) we really need to be helping the solution, not contributing to it. Sadly, more tourists mean more plastic cups and straws, and more trash in the ocean. I’m not very comfortable contributing to this.

There are also other environmental impacts of tourism on Bali, like the growing need of accommodation options for wiping out protected natural areas. This disrupts the ecosystem and could create a lot of problems for Bali in the long run.

The Dark Side of Bali

Tourism has also introduced some less than desirable qualities to Bali – prostitution, and subsequently, human trafficking is on the rise. The introduction of tourists has also seen the introduction of drugs, which have the death penalty for in Indonesia. You can learn more about these issues – and how to help to prevent them – at Dark Bali .

Economic Leakage

While tourism in Bali has brought more money, a lot of the time it only benefits the owners – who are often foreign. Staff of these big companies are typically not paid that much, and most of the money goes into the wealthy owner’s pocket, who may be from Britain, Australia, the US or any other country – generally a wealthier one than Indonesia. This means that the impacts of these businesses to the Balinese are mainly negative – business is taken away from local competitors, land is taken up, and prices are hiked up for locals.

Cultural Suppression

Balinese culture is one of the main reasons that I love the place. But, due to the overtourism, culture is being more and more suppressed – and it’s really sad. This is one of the negative effects of globalisation – tourists who come to Bali and treat it as their own place, without paying attention to the Balinese way of life, are really wrecking the traditions here. This is a problem all over the world, but out of everywhere I’ve visited I noticed it especially in Bali.

Is Bali Worth Visiting?

Everything being said, I still love Bali, and I still will go back to Bali. I just want to promote the right kind of Bali tourism. There are ways that we can increase the positive impacts of tourism in Bali and decrease the negatives. How? I’ll tell ya…

• Eat at local warungs – not only are these restaurants delicious, and have good vegan and vegetarian options, but they are locally run so the money goes back to the owner, which is normally a family. The prices here are a lot cheaper than what you’ll pay in western restaurants as well. Plus, Indonesian food is great and caters for most dietary restrictions .
• Stay in homestays when possible – Bali is dotted with these. Some are basically locally run hotels, others are local homes. As long as it’s run by Balinese people, it will help them out.
• Take taxi drivers’  tours – many drivers do this as another way of earning an income and find it more enjoyable than driving different people around all day. They are really flexible with their tours and will take you to less touristy places if you ask. If there’s a few of you in the car, it’s a great deal.
• Cut your use of plastic – take reusable straws (you can buy some here), resuable coffee cups (click here to buy) and reusable bags (here’s some)
• Get to know the Balinese people! – English is quite widely spoken in Bali, and the locals are lovely people. They’re always down for a chat, and will love to share their culture and traditions with you.
• See traditional shows – Balinese dance shows are easy to come across, especially in Ubud. There are lots of other ceremonies and rituals, some which tourists are allowed to watch. Having an interest in these keeps them alive.
• Learn about the history and religion of the island – you can do this by visiting some of the many temples in Bali  and chatting to locals about their spirituality and beliefs.
• Head to some less explored places of the island – these areas will be quiet and calm, and a place to experience ‘real’ Bali. You’ll be able to meet some locals here and stay in a homestay.
• AVOID big companies that obviously have their roots in other countries. This includes multi-national hotels, some beach clubs and foreign restaurants and bars.
• Get involved in ethical volunteering, read up about some of Bali’s issues and spread the word about what we can be doing to help. I highly recommend ‘Under the Volcano – The Story of Bali’ ( purchase it here )  to get a good understanding of the island’s history.

Have you visited Bali? What did you think of it? For more ethical travel posts, subscribe to Claire’s Footsteps or follow me on Facebook!

19 thoughts on “ The Impacts of Tourism in Bali ”

Thumbs up Claire for seeing what is happening. Bali by now stinks and sinks under mass tourism who treat the island & take up land as if it IS theirs. Then too, this cannot happen if tourism development is a well balanced arm of government. Alas, it’s AGAIN a corrupt money game, misused by government & foreign investors and overused by long & short terms tourism wrecking it even further. At least most of them.

Thanks for the comment Elisa. I know, it’s really sad and it’s such a beautiful culture that’s being oppressed 🙁 I will still visit Bali, however, and support all of the local businesses and cultures that I love there. I hope you can still find some beauty in the island as well!

I first went to Bali 24.years ago. I then went 9 years ago and again recently. My opinion is that Bali is sinking as you say under the consequence of mass tourism. Attitudes of the Balinese have changed in a negative sense towards tourists. They desire a better life for themselves and their families which is human nature. The main worry of recent is that they can now obtain credit from lenders relatively easily, thus there is more traffic on the roads. I noticed a huge amount of new scooters and cars. They are paying up to 40% interest, private investors can obtain over 20% interest. What would happen if there was a natural disaster like an earthquake or volcanic eruption? Total collapse of the infrastructure leading to the end of tourism for an unknown period of time. These are very worrisome times and I don’t see a solution.

I enjoyed reading your post Claire. My family are visiting Bali in a few weeks and I am using your site to help my IGCSE Geography students understand the good things and bad things about international tourism. Well done

That’s great to hear Neil, I’m glad it’s helping! Thanks a lot for your comment 🙂

Wonderful Post. Really, this is the perfect case study for analyzing how tourism impacts indonesia.

Thanks Prakriti!

Thank your for your attention in bali tourism impact. i am a balinese born and rise in rich culture area of ubud and i can say that all your writing are correct. nowadays beside cultural degradation because of mass tourism we also face a land use change where more and more rice field and riverside, green area were change to villa, hotel and other tourism facility. many of balinese aren’t aware of current change, there are feel more satisfied with evoluiton of thing because its easier to make money from tourism. *sorry for my english

Hi Nyoman, it’s great to hear from a local and thanks for your encouraging comment. Yes I completely agree, industries are changing fast in Bali but that doesn’t necessarily convenience everyone and it definitely should be taken more into account. If you have any more ideas about how tourists in Bali can be more sustainable please do drop me an email at [email protected] , it would be great to get some local perspectives in this post. Also your English is really good! My Indonesian is very bad but I try to speak some words when I’m there and I really like the language 🙂

Hmm yes, interesting.

I found your work to be very helpful with my English tourism assignment, Thanks

Glad to hear that!

GIad to hear that!

I am a Balinese born in Kuta and yes these tourism problems are a great deal in my area.

This really helped me a lot thank you!!??

You’re welcome!

Thank you Claire for your analysis..I use this in my geography class to discuss the impacts of tourism industry in Bali..

Glad to hear this is helpful! 🙂

Comments are closed.

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Tourism-induced poverty impacts of COVID-19 in Indonesia

a Department of Tourism, Sport and Hotel Management, Nathan Campus, Griffith University, 170 Kessels Road, Nathan, QLD 4111, Australia

Anda Nugroho

b Fiscal Policy Agency, Ministry of Finance, Jl. Dr. Wahidin Raya No.1, Jakarta 10710, Indonesia

International tourism is an important sector in developing countries for its ability to alleviate poverty. Impacts of COVID-19 are detrimental to all tourism destinations. This paper examines the pandemic effects on poverty of regional economies based on a multi-household CGE model using Indonesia as a case study. Results are critically important for policymakers, as the pandemic retracts achievement of poverty reduction significantly, more than a decade of effort for Bali in this case study. Adverse impacts are transferred to other non-tourism destinations through inter-regional trade flows. The paper provides empirical evidence to call for government's targeted support to combat the economic impacts of the pandemic improve poverty more effectively.

1. Introduction

Tourism plays an important role across many countries. In 2019, the sector accounted for 6.8% of total world exports and 4% of direct contribution to the world GDP. The outbreak of the coronavirus began in late 2019 (COVID-19 hereafter) and spread across the world and resulted in border closures of more than 130 countries by April 2020. This effectively shut down the tourism industry worldwide, reducing the sector's world export share to 2.8% and its direct GDP contribution to 1.8% ( UNWTO, 2021 ), a significant downturn of the world economy, and put millions of jobs at risk.

The sector has an essential role in alleviating poverty in many developing countries ( Cárdenas-García, Sánchez-Rivero, & Pulido-Fernández, 2013 ; Croes & Rivera, 2015 ; Mahadevan, Amir, & Nugroho, 2016 ; Telfer & Sharpley, 2007 ; Zhao & Xia, 2019 ). For Indonesia, among the top industries, tourism contributes around 5.8% to the national GDP ( WTTC, 2018 ). Being a labour-intensive sector, it is one of the main sources of employment, the economic downturn of COVID-19 would push many households into poverty.

Pandemic studies generally assess the impacts very broadly across all factors from supply to demand sides in the economy ( del Rio-Chanona, Mealy, Pichler, Lafond, & Farmer, 2020 ; Fernandes, 2020 ; Maliszewska, Mattoo, & Mensbrgghe, 2020 ; McKibbin & Fernando, 2020 ). Fernandes (2020) points out that the consequences of the pandemic are not equally distributed in an economy. Ataguba (2020) alludes to the fact that poor and vulnerable people may bear a greater burden of the COVID-19 pandemic. So, to what extent would this pandemic affect poverty in a tourism destination of a developing country such as Bali of Indonesia? Who would be affected the most among all local workers? More importantly, would the impacts be on the tourism destinations only or spill over to other non-tourism-dependent regions in the country as well? These are important factors for policy development that policymakers need to know. The tourism-driven aspect of poverty across regions in a country from crises such as the phenomenon COVID-19 pandemic has not been addressed in the literature. Without this knowledge, government policies are at risk, as there is no basis for the government to base their policy development on. These questions are the motivation that constitutes the contribution of our study to the literature.

This study adds to the current literature on the impacts of COVID-19 the regional dimension, with a strong focus on the tourism-induced poverty impacts by region and by household group. In addition, as the standard Computable General Equilibrium (CGE) with a single representative household sector is unable to capture the poverty and distributional impacts, the standard household sector in the Indonesian CGE model is augmented to 100 household groups to capture the impacts on poverty and income distribution across all destinations. It is a new and comprehensive approach compared to most current studies. These contributions are essential, to provide insights for accurate response policies across time.

This study will focus on the international tourism effects, as the loss of international tourism demand is clearer than that of the domestic market when lockdowns were imposed intermittently. Moreover, the international segment is the main market for foreign income, its role and effects warrant a careful attention from government and policymakers for policies that can build a resilient tourism sector. As such, the paper focuses on the short-run impacts in 2020 where findings are more relevant for the objectives.

2. The economic tourism impacts of infectious diseases

Tourism has been affected by infectious diseases previously, including the swine flu ( Haque & Haque, 2018 ; Page, Song, & Wu, 2011 ), the severe acute respiratory syndrome or SARS ( Dwyer, Forsyth, & Spurr, 2006 ; Kuo, Chen, Tseng, Ju, & Huang, 2008 ; Liu, Moss, & Zhang, 2011 ), foot and mouth disease ( Blake, Sinclair, & Sugiyarto, 2003 ), Ebola in 2013–14 ( Sifolo & Sifolo, 2015 ), and the Middle East respiratory syndrome (MERS) in 2012. By and large, previous studies tend to adopt mainly traditional modelling methods ( Liu, Kim, & Song, 2022 ) and they highlight that those infectious diseases have significant negative impacts on inbound tourism demand and on the wider economy. The main reason for a downturn of tourism during an outbreak is due to border closures and lockdowns ( McKercher & Chon, 2004 ), limiting movements of visitors, consequently causing losses to tourism revenue and simultaneously driving down the aviation industry significantly ( Chen, Demir, García-Gómez, & Zaremba, 2020 ; Liu, Kim, & O'Connell, 2021 ) during restriction time.

The scale and scope of COVID-19 are unprecedented and far more destructive than the previous ones, including social impacts ( Qiu, Park, Li, & Song, 2020 ), that the pandemic ignites a large volume of very diverse academic discourse ( Yang, Zhang, & Rickly, 2021 ). Indeed, it is the most serious public health threat since the 1918 Spanish flu pandemic ( Ferguson et al., 2020 ), as the world economy is much more integrated in the supply chain and containing a higher share of the service sector, particularly in developed countries ( Boissay & Rungcharoenkitkul, 2020 ). The World Bank (2021) reports a 3.5% contraction in the global economy for 2020. Sharp declines in individual economies around the world are also noted in Australia ( Pham, Dwyer, Su, & Ngo, 2021 ); African countries ( Ataguba, 2020 ), Tanzania ( Henseler, Maisonnave, & Maskaeva, 2022 ); the United States of America ( del Rio-Chanona et al., 2020 ; Muellbauer, 2020 ), and a wide range of developed and developing countries ( Fernandes, 2020 ; Maliszewska et al., 2020 ; McKibbin & Fernando, 2020 ).

The approaches to modelling infectious diseases are quite diverse. These include the use of econometrics approaches ( Haque & Haque, 2018 ; Kuo et al., 2008 ; Liu et al., 2011 ; Page et al., 2011 ), artificial neural networks ( Jaipuria, Parida, & Ray, 2021 ), Input-Output multiplier model ( Hai, Zhao, Wang, & Hou, 2004 ), the computable general equilibrium (CGE) models ( Blake et al., 2003 ; Dwyer et al., 2006 ; Maliszewska et al., 2020 ; McKibbin & Fernando, 2020 ; Pham et al., 2021 ), the dynamic stochastic general equilibrium modelling technique ( Yang, Zhang, & Chen, 2020 ), and the Tourism Satellite Accounts (TSA) approach ( Pham et al., 2021 ; Wu, Cao, Liu, & Chen, 2022 ). The modelling choice will determine the outcomes of the analysis, as each approach has distinct characteristics. Partial equilibrium approaches such as econometric and artificial neural networks mainly focus on observed variables while assuming everything else is constant, thus constraining the feedback effects between supply and demand, and between industries. The use of I—O framework captures the inter-industry linkages very well. However, the technique relies on a fixed linear relationship assumption; price effects and resource constraints are not taken into consideration thus leading to overestimated results ( Blake, Arbache, Sinclair, & Teles, 2008 ). Using the same I—O database, the CGE modelling technique adds the economic optimisation theory to deal explicitly with price effects and resource constraints. Thus, it offers a more robust capability for economy-wide analyses, as prescribed in Arrow (2005) that “… in all cases where the repercussions of proposed policies are widespread, there is no real alternative to CGE ”. For these reasons, the CGE modelling technique is adopted in this study.

From the tourism perspective, the System of National Accounts does not recognise tourism as a sector explicitly in the economy, thus it is not possible to understand the size and the importance of the sector among many other sectors in the economy. The TSA framework was developed by UNWTO (2010) so as to ‘ allow an expansion of the national accounts for selected areas of interest while maintaining the concepts and structures of the core accounts ’ ( ABS, 2019 ).

TSA plays an important role in tourism analysis and is the main tool to estimate the direct contribution of tourism to the economy ( Pham & Dwyer, 2013 ). Using TSA alone cannot capture tourism impacts on the rest of the economy though. This gives rise to the approach that integrates the TSA framework and the CGE modelling technique to create a powerful modelling tool that can capture the economy-wide flow-on effects ( Pham et al., 2021 ). On the one hand, the approach explicitly represents tourism as a sector in the economy; and, on the other hand, tourism consumption is decoupled from household consumption (domestic tourism) and exports (inbound tourism), the crowding-out effects on the same commodities by tourism demand versus household consumption (or exports) can be clearly delineated.

It is also important to note that all COVID-19 economic impact studies of tourism focus on the national level of the impacts. At the regional (sub-national) level, the pandemic has immensely diverse effects on tourism destinations. Although essential, the regional poverty impacts of tourism demand are ignored. Our research is set out to elaborate the modelling tasks further to unveil the regional impacts on poverty explicitly. From this angle, this paper has an important contribution in terms of policy implication for many other countries, as the task to alleviate poverty is increasingly an important objective. If the consequences on poverty of this pandemic are not addressed, the potential poverty effects could result in long lasting poor outcomes for many individuals.

3. Poverty and tourism

Poverty has always been an issue for many developing countries as it is a long-term multidimensional social-economic problem. It is the main cause of malnutrition, lack of education, poor health, lack of basic needs of living standard ( Barnett, 1998 ; Brooks-Gunn & Duncan, 1997 ; Larson, 2007 ). Poverty hinders productivity, constraints economic growth and socially stimulates crimes ( Breunig & Majeed, 2020 ; Holzer, Whitmore Schanzenbach, Duncan, & Ludwig, 2008 ).

Tourism has been identified as one of the effective tools that can be adopted to alleviate poverty in countries that are not rich in natural resources. Tourism creates job opportunities, generates foreign exchange earnings, improves the terms of trade, and increases investment that, in turn, will increase household income and help reduce poverty ( Blake et al., 2008 ; Croes & Vanegas, 2008 ; Mahadevan et al., 2016 ; Njoya & Seetaram, 2018 ). Nevertheless, a drawback is that tourism boom can hurt non-tourism exporting activities due to the Dutch disease effects of the real exchange rate appreciation that tourism can crowd out non-tourism exporting industries ( Blake, 2008 ; Pham, Jago, Spurr, & Marshall, 2015 ).

Although the tourism-poverty nexus has been studied in the tourism literature, the analysis is too aggregate, mostly at the national level. The regional dimension of poverty where tourism impacts actually occur has not been examined adequately. As such, analysis can overlook the actual conditions where appropriate policies are needed for improvements. As evidenced from Indonesia, the regional poverty incidence in 2019 ranges from 26.5% in the poorest region to only 3.4% in the wealthiest region ( Statistics Indonesia, 2021 ). Therefore, without the regional analysis, it is hard to translate national perspective into accurate policy responses at the root level where tourism activities take place and are intended to improve poverty conditions.

The nature of tourism in Indonesia is not homogenous across all regions due to its geographical landscape. Bali and Yogyakarta are the most popular tourist destinations in the country ( Table 1 ). However, both regions offer different experiences for visitors. Bali is more appealing to international visitors while Yogyakarta is more attractive to the domestic tourism market. Among all regions, Bali alone contributes more than 40% of total international tourism revenue to the country ( Table 1 ). Within Bali, the international market dominates with more than 83% of revenue share on a 10-year average (2010–2019) although international markets account for less than 40% of total visitor number over the period. In contrast, although the number of domestic visitors on the 10-year average accounts for more than 90% of total visitors to Yogyakarta, the international market is still a major source of income (more than 50% on the 10-year average) for the region ( Table 1 ). The role of international tourism market is certainly very important to destinations in Indonesia.

National and regional tourism indicators by selected tourism region.

Source: ( Statistics Indonesia, 2021 ).

Table 2 provides the combined shares in gross regional product (GRP) and gross domestic product (GDP) of two dominant tourism expenditure items, hotels and restaurants, to highlight the role of tourism at the regional and national levels. For Bali, the share had dwindled from 21.6% down to 18.9% over the period 1998–2005 ( Table 2 ) due to adverse external shocks, including terrorist attacks (2002), the suicide bombings (2005), as well as the bird flu outbreak in 2004. The suicide bombings seemed to divert visitors away from Bali to Yogyakarta, thus the share of hotel and restaurant in GRP for Yogyakarta increased slightly (9.2% to 11.7%).

Tourism contribution and broad poverty assessment by selected tourism region.

The tourism industry improved slowly over the period 2007 to 2015 for both Bali and Yogyakarta, through the global financial crisis. The post-2015 period experienced a boom in international tourism, induced by the visa-free policy for 169 countries the Indonesian Government introduced in 2016. The number of foreign visitors increased by almost 54.8% from 10.4 million visitors (2015) to 16.1 million (2019). The visa-free policy seems to have benefited Bali the most, with a strongest increase of 0.7 percentage points (from 19.6% to 20.3%) in the share of hotels and restaurants in the region's GRP. Over the 15-year period from 2005 to 2019, tourism had steadily adjusted back to the pre-crisis levels in both Bali and Yogyakarta. Overall, the share at the national level declined slightly after the Bali bombings and seems to have stabilised at the level of 3.0% ever since. Similar data of Tables 2 for other regions are provided in Appendix A.

Alongside improvements in tourism before COVID-19, the portion of the population living below the poverty line had decreased from 24.2% to 9.2% between 1998 and 2019 nationally ( Table 2 ), a significant improvement for Indonesia, mainly due to a sustained robust economic growth over the past decades with an average annual rate of 5.3% since 2000 ( Statistics Indonesia, 2021 ), the main driver of the long-term poverty reduction ( Asra, 2000 ; Balisacan, Pernia, & Asra, 2003 ).

As seen in Table 2 , Bali is among the provinces with the lowest poverty incidence, second to the capital city Jakarta (Appendix A). Such achievement can be attributable to the foreign income from the international tourism market ( Table 1 ), the main industry of Bali. The persistent growth in per capita income improves the poverty consistently over time.

However, the success in poverty reduction has not been translated into equal improvement in income distribution among all regions, as reflected by the Gini index ( Table 2 ). A large value for the Gini index indicates higher inequality among income earners. Table 2 shows that the inequality did not improve significantly overall between 2010 and 2019 and income distribution for Bali and Yogyakarta fluctuated over the period 2010–2019, more so for Bali.

The impact of the pandemic on poverty has posed serious questions that policymakers in Indonesia, and other developing countries, would like to understand, and need to understand well, for their effective response policies. This compelling reason is the motivation for this paper to undertake the combined topic of pandemic-tourism and regional poverty in Indonesia as a case study that can be useful for many other countries. Our paper contributes to this debate with invaluable information.

4. Methodology

4.1. the cge core.

As visitor expenditure covers a wide range of goods and services, the economic impacts of the COVID-19 pandemic will widely permeate through industries and regions in the Indonesian economy. This warrants a regional CGE for the analysis. The model in this study is augmented from an existing regional CGE model INDOTERM, that is widely used for Indonesia ( Horridge, Madden, & Wittwer, 2005 ; Wittwer & Horridge, 2010 ; Yusuf, 2021 ; Yusuf, Roos, & Horridge, 2018 ). The original database was in 2010, containing 34 regions, 185 industries.

Regions are linked with each other through the inter-regional trade flows and with the rest of the world through the international trade flows. For each industry, intermediate inputs and the composite primary input are combined in a linear relationship, referred to as the Leontief technique. Although the model structure is flexible to alter this linear relationship when required, this linear relationship is usually kept constant throughout simulations. Intermediate inputs can be sourced from either domestic regions or overseas, depending on the relative prices of the supplies. An industry will purchase inputs from the cheapest source utilising the constant elasticity of substitution (CES) prescribed in the Armington imperfect substitution function ( Armington, 1969 ) so as to minimise the production cost. Similarly, capital, labour and land are combined in the composite primary input bundle using the CES function. Each industry produces a single output.

Demands by the households are modelled using a Linear Expenditure System at the top level, governed by household income, commodity prices and population size. Commodity demands by the households are broken down into domestic and imports sources, then among domestic regions, all using the cost-minimising CES function. The CES function is also applied to demands for investment and government consumption. Foreign demands for domestic products are modelled as downward sloping demand curves.

4.2. Poverty calculation

While the CGE core equations are inherited from the base model, an additional poverty module was developed to capture changes in income groups and poverty explicitly. Each region now has 100 groups of households corresponding to the percentiles of their per capita consumption level. Equations for income distribution reflect the individual sums of the 100 income groups (percentiles) across all industries. The income distribution provides the basis for the calculation of changes in poverty incidence ( before and after the pandemic ) for all regions (Appendix B). Poverty incidence refers to the proportions of the Indonesian population living under the poverty line with the income just enough to cover the daily food requirement for 2100 cal and monthly non-food basic items (e.g. rent and energy). The Indonesian Government estimates the poverty line for each province separately ( Statistics Indonesia, 2021 ).

4.3. Data development

Fig. 1 illustrates the database development. First, the original IO database was updated from 2010 to 2019 but parameters remain unchanged as their update is beyond the scope of this paper. The single household sector was then expanded to 100 household groups corresponding to their per capita expenditure percentiles using shares obtained from the SUSENAS household survey data, while the labour income of the regional industries was disaggregated using the SAKERNAS labour force survey data. The development maintains the original dimensions of 185 single-output industries and 34 regions. However, for simplicity, the data are aggregated down to 20 industries and reported for 5 regions (Appendix C) in this study. The updated database has a strong focus on the regional aspects of income distribution and poverty.

Construction of the 2019 model database.

4.4. Shock calculation

It is important to note that there are various ways the pandemic can affect the economy, such as health effects, supply-chain changes, demand-side shock, and direct labour supply disruption due to people staying away from work ( Baldwin & Tomiura, 2020 ). This study only focuses on the effect of losing inbound tourists due to the closure of the Indonesian international borders, similar to the approach in Pham et al. (2021) . The actual data of visitor arrivals during 2020 and inbound tourism expenditure from the latest Tourism Satellite Account (TSA) are used to calculate the shocks.

Fig. 2 presents monthly arrival data for all airports of Indonesia. The numbers of visitors started declining sharply at the end of January 2020. Comparing March-2020 with March-2019, arrivals dropped to 64.7% for the Ngurah Rai Airport of Bali, 68.4% for the Adi Sucipto Airport of Yogyakarta. By April 2020, arrivals to all airports had effectively stopped, as seen in the figure ( CEIC, 2021 ).

Air gate arrivals by airport.

The exact timeframe of the international border closure was difficult to estimate. However, the immediate effect was that the international tourism market for Indonesia was closed right through 2020. Compared to 2019, the reduction in the number of arrivals at Bali airport in 2020 was 83.3%, 83.6% for Yogyakarta, 82.7% for Jakarta and Banten, and 63.6% for Papua. Nationally, the reduction was approximately 83% ( CEIC, 2021 ).

These changes in visitor numbers are translated into shocks by commodity and by region through a three-stage process: (i) distribute total tourism inbound expenditure to regions ( Statistics Indonesia, 2019 ), (ii) disaggregate total regional tourism expenditure into specific goods and services ( Statistics Indonesia, 2019 ), and (iii) calculate tourism shocks as proportions in the export values of the corresponding commodities from the region ( CEIC, 2020 ). For example, “textile products” are typical shopping items that inbound visitors buy as presents to take home from Bali. The −24.6% decline in export demand for textile products in Bali is based on −83.3% reduction of international arrivals, then (a) 48.6% of the international visitor's expenditure is allocated to Bali, (b) 1.9% of the total regional tourism expenditure in Bali is allocated to textile using the latest expenditure pattern (c) shocks are derived by dividing tourism consumption of textile by total exports of textile from Bali, as presented in Table 3 . The reduction in inbound tourism consumption is done via losses of export demands, introduced to specific export commodities of the supplying industries which are loosely defined as tourism-related industries as identified in Table 3 .

Regional shocks by product (per cent).

Source: Authors' calculation.

5.1. Simulation setting

In this study, a short-run closure was applied on the model in a comparative static mode. Short-run results reflect impacts in the immediate period, ie. 2020 in this case. Given the fact that the demand for inbound tourism further declined in 2021, results in this paper will not be in the typical year manner that can represent impacts for 2021. They may, however, be used as a proxy for 2021, as the difference in the losses in inbound tourism demands was only marginal between the two years. It is important to note that results in the study are derived from the inbound tourism aspect of the COVID-19 on the Indonesian economy. Therefore, results should not be compared directly with published statistics, as during the pandemic, the Indonesian Government provided financial supports to the economy, thus softening the impacts.

In this short-run closure setting, capital stocks and land are held constant. Rates of return are flexible to reflect changes in demand for capital and land. In contrast, nominal wages are assumed to be constant while total employment adjusts to reflect changes in labour demand nationally. Regional real wage differentials become a driver to reallocate labour between regions. Regional household consumption is driven by regional income. Investment responds to the prevailing rates of return generated in the model. Although the Indonesian Government did increase government support to prop the economy, government demand is held constant in this study order to estimate strictly the impacts from the losses of international visitors. Lastly, nominal exchange rate is used as numeraire in the model.

Primarily, the analysis in this study examines the impacts on the regional economies of Indonesia due to the losses of international visitors to the regions. The standard closure would generate adverse impacts on tourism-related industries, which then release resources to the rest of the economy. In a non-pandemic condition, where strict social distancing is not imposed, country border is not shut down, other industries can make use of the released resources at cheaper costs to expand their output and exports. However, in the infectious conditions with a large-scale social distancing in all regions, labour mobility becomes rather restrictive for other industries to fully absorb the released resources. The paper will examine both scenarios in order to give a full range of possible outcome of the pandemic through the effects of the international tourism market.

Scenario 1: A decline in the number of inbound tourists, no exports response from other industries.

Scenario 2: A decline in the number of inbound tourists, with exports response from other industries.

The export response is an important factor that affects the overall economic impact. This scenario illustrates a possibility for the domestic industries to soften the adverse impacts of the pandemic without any burden on the government budget through fiscal policies.

5.2. Macro results

We first begin the analysis with an explanation of the scenario without the export response of the non-tourism industry (Scenario 1). At the macro level (the left panel, Table 4 ), the decline in the number of inbound visitors will reduce output of tourism-related industries. Given the short-run closure setting, output contraction mainly results in losses in demand for labour, as capital stock is assumed constant in the short term. Thus, under Scenario 1, the decline of −2.7% in GDP is mainly due to a − 6.2% contraction in employment.

Macroeconomic effects (percentage change).

Source: Authors' results.

The decline in foreign tourism demand brings immediate effect on reduced income to the economy, hence driving down household consumption by −3.4%. On the other hand, real investment is also estimated to decrease by −3.9% due to the decline in the rate of return to investment as average payment to capital dropped by −7.8%. The decreases in the final demand for household consumption and investment are strong, this makes the real exchange rate devalue by −5.2%. Such depreciation will generally make imported goods relatively more expensive, domestic users tend to substitute domestically produced goods for imports. Real import is estimated to decline by −4.1% and helps improve the trade balance by 1.4%. On top the depreciation effect, the decline in imports is also partly due to lowered income thus subsequently weaker consumption.

In contrast, the devaluation can make exports from Indonesia cheaper for foreign buyers, reflected by a decrease of −5.9% in the terms of trade. As exports of other non-tourism industries are assumed not to respond, the decrease in the terms of trade somewhat reflects a welfare loss, as the domestic economy cannot import as much as before for any existing units of exported commodities.

At the regional level, not a single region could be immune to the adverse impacts of the pandemic regardless of whether they are tourism-dependent regions such as Bali and Yogyakarta, or mining-based (Papua), manufacturing-based (Banten), and service-based (Jakarta) regions. Drivers of the economic downturn for each region are slightly different though. Both Bali and Yogyakarta are estimated to lose their exports significantly (−48.7% and − 30.4%, respectively) through tourism, well above the national total exports (just −3.3%), as seen in Table 4 (row 6).

Bali, with the largest market share of inbound tourists (38.5% of total international visitors, Table 1 ), experienced the most profound economic impacts. The GRP of the region is estimated to contract by −12%, more than four times of the decline by −2.7% in GDP at the national level. In contrast, GRP of Yogyakarta is estimated to decline by only −2.9%, much lower than that of Bali, even though both are tourism-dependent regions. This is because Yogyakarta relies more on domestic visitors, the export share of inbound tourism in its GRP is relatively small (6.7%) compared to that of Bali (50.5%).

The pandemic affects not only tourism revenue but also suppresses investment across all regions in the country, essentially due to the negative rate of return. Among regions, investment in Bali is affected the most, mainly the construction industry in the region ( Table 4 ). This may have a long-term effect on the supply side of the tourism industry if the pandemic prolongs. Although not popular as a tourism destination, Banten has also experienced relatively a strong contraction in its GRP (−3.9%), slightly higher than the loss to Yogyakarta (−2.9%). This is due to a decline in the export of air transport services, contributing to a total loss of −7.5% in the region's export, as Banten is home for the largest airport and occupies the largest share of air transport services in Indonesia (Soekarno Hatta international airport). The contraction in Banten's economy is a result of lower demand for transport services by inbound visitors travelling in the country, Bali and Yogyakarta. Given the fact that airfare expenditure is one of the largest expenditure items of visitors, the decline in Banten's GRP is inevitable.

In Scenario 2 (the right panel in Table 4 ), where the assumption of fixed exports of other non-tourism industries is relaxed, the impact pattern is the same, except results are not as strong. Industries other than tourism may be able to utilize some slack labour released from the tourism-related industries to increase their competitiveness and boost their exports. The total of exports at the national level is estimated to reduce by only −2.9%, less than that in scenario 1 (−3.4%). National GDP is estimated to contract by −1.6%, which is softer by more than 1.1 percentage points compared to the GDP result in scenario 1.

The impact on employment losses in the second scenario (−3.9%, row 8) is significantly lower than that in scenario 1 (−6.2%), due to resource reallocation. As the slack labour is now partially absorbed among other non-tourism related industries to produce more output, which also tends to add marginal demand for capital; thus, although rental to capital is still falling (−4.0%), it is not as low as the result in scenario 1 (−7.8%). Subsequently, investment is estimated to reduce modestly by only −1.5%. The combined effects of less losses of employment and rental income result in a less severe adverse outcome for household income, therefore the reduction in household consumption is estimated to be just −1.5% (row 2), a significant improvement from scenario 1 (−3.4%). Trade balance in this scenario declines by −1.6%, not improving as in scenario 1, mainly because import is not declining as much in scenario 1.

It is important to note that scenario 2 could not avoid the losses of employment completely. This is due to the assumption of the fixed nominal exchange rate that is intentionally applied to reflect the pandemic nature, which limits mobility of resources hence the ability to absorb the released resources to increase production capacity of non-tourism-related industries.

The increased exports of non-tourism related industries offset the total losses of the international tourism revenue more in non-tourism dependent regions than in tourism dependent regions. This is because the initial losses of the inbound sector in the tourism dependent regions (Bali and Yogyakarta) are so large that the increased production and exports of non-tourism-related industries could not improve the overall adverse impacts very effectively when the infrastructure of the non-tourism related industries in these tourism regions is not very strong. However, for non-tourism dependent regions (Jakarta, Banten, and Papua), the non-tourism-related industries are already there and play an important role (larger shares) in these regions; the cheaper costs of resources can help enhance the production of their traditional exporting industries. Importantly, the enhanced exports for the non-tourism-related industries could improve the returns to capital therefore softening the reduction in investment significantly. All in all, the enhanced exports can improve the GRP losses more effectively in the non-tourism dependent regions in comparison with Bali and Yogyakarta.

Among all industries, the tourism-related industries are estimated to decline more significantly than the others. At the national level, Arts and entertainments, hotels, restaurants and transportation, are the estimated to contract by 30.2%, 20.9%, 6.3% and 5.6% respectively in scenario 1 ( Table 5 ). And the output losses of these industries concentrate more in Bail and Yogyakarta than in other regions, except Banten with the very large output decline in transport services (−12.8%). Given the inter-linkages among industries and regional economies, output of tourism supplying industries such as utility, food products, and other manufacturing industries is also curtailed. Simultaneously, lowering household income (consumption) leads to further output contraction in non-tourism-related industries. As a result, all industries contract across all regions. Between the two scenarios, as expected, output of industries is estimated not to decline as much in scenario 2, as non-tourism-related industries could take advantage of the cheaper costs to improve their competitiveness and increase exports to offset the adverse impacts.

Effects on outputs of selected industries (percentage change).

5.3. Poverty effects

As the economy contracts, unemployment surges, poverty incidence is estimated to increase. In scenario 1, the 83% loss of inbound tourists could raise the national poverty incidence by 0.9% of the population ( Fig. 3 ) or equivalent to more than 2.4 million people out of the total 268 million people in Indonesia. This pushes the national poverty incidence from 9.2% in 2019 ( Table 2 ) to 10.1% in 2020. The decline in the number of inbound tourists effectively sets back poverty abatement at the national level by three years. Residents will face a lower living standard.

Impacts on poverty incidence (percentage incidence).

At the regional level, poverty changes are not uniform. The variation moves in line with results for GRP presented in Table 4 . Bali is the most affected destination. The decline of 12% in GRP of Bali raises the poverty incidence in the region by 2.2% in scenario 1 ( Fig. 3 ), the most severe among all regions. The increase in poverty is estimated to push the existing poverty level in Bali from 3.8% in 2019 up to 6.0%, the same level of poverty twelve years earlier in the period between 2007 and 2008 ( Table 2 ). This is a severe set-back for the Balinese, by more than a decade of what had been achieved for poverty reduction in the region.

Banten, Yogyakarta and Jakarta also suffer from increases in the poverty incidence, although not as severe. Banten is the second region that suffers from income losses, just as the order of GRP losses ( Table 4 ). This highlights the important contribution of a regional CGE model in this paper, that can detail the differences impacts across regions from the pandemic.

With the assumption of non-tourism industries being responsive to the resources released by the tourism related industries (Scenario 2), impacts on poverty incidence are significantly softened in non-tourism-dependent regions. In these regions, the regional economies can take up slack labour so that employment and wage levels do not drop significantly. Among all regions, Papua is estimated to experience a slight improvement in poverty incidence since the real income effect is somewhat stronger than the negative employment effect. In contrast, in the tourism-dependent regions, relaxing the assumption on exports for non-tourism-related commodities does not help much since production of these commodities are not readily available to take up such opportunity. In other words, too much specialisation can put a region at a higher risk due to the lack of flexibility to respond to a crisis . This underlines the importance of diversification in the industry structure to minimise risks for regions during crises.

For distributional impact, Fig. 4 , Fig. 5 present the percentage changes in real household consumption of each household group in 2020 compared to their base level in 2019 due to the international border closure. Each line encompasses all 100 household groups, corresponding to the 100 percentile income groups (horizonal axis), from poorest (household number 1) to wealthiest (household number 100).

Impacts on real consumption of all household groups compared to base year (percentage change).

Impacts on real consumption of all household groups compared to the base year (percentage change).

The most prominent evidence is that all household groups in Bali suffer significant losses compared to all other regions, in both scenarios, but more so in scenario 1 ( Fig. 4 ), ranging from 12% to nearly 19%. For other regions, the changes in real consumption tend to be equally distributed across household groups within individual regions.

For Bali alone, in relative terms, the impacts on income and consumption losses tend to skew toward the middle-income to high-income groups (30th to 100th percentiles), and more so on the middle groups between 40th to 70th percentiles. The adverse impact on the poorest groups (from the 1st to the 30th percentiles) are less severe. This is because the middle- to upper-income household groups experience a stronger negative income effect. The drop in the international tourist revenue results in lower output level across a whole range of industries, including those providing inputs into the tourism services, as well as tourism-related industries, such as hotel, art and entertainments, restaurants, utility, and transportation ( Table 5 ) in which technicians, managers, professionals in the middle- to upper-income groups take up large income shares. With relatively small shares of the low-income groups in the tourism-related industries, changes to the tourism sector do have an impact on these households but would not be as much. This finding is consistent with the previous case studies for Australia ( Pham et al., 2021 ) and Brazil ( Blake et al., 2008 ), as the low-income groups only take up a small proportion of employment in the sector.

However, the absolute level of changes in the low-income groups are the results of changes in the poverty incidence, as these groups are already close to the poverty line, small changes can push them over the threshold easily. The households that have the monthly average expenditure per capita in the range between IDR380,000 and IDR460,000 or US$29.6 to US$35.8 are the most vulnerable ones.

In scenario 2, changes in the real household consumption across regions are in similar patterns but marginally less severe ( Fig. 5 ). However, the gap between Bali and all other regions is widened up as other regions have larger foundation of non-tourism-related industries than Bali, they can expand their exports, thus reducing the adverse impacts.

6. Conclusions

This study provides empirical evidence on the adverse impacts of the decline in inbound tourists from COVID-19 on the economy and poverty. Using a regional multi-household CGE model, this study unveils the dynamic relationship between economic impacts, income distribution and poverty effects among all household groups across provinces of Indonesia, an important contribution to the current literature.

Results of this study show that the impacts of the unprecedented decline in inbound tourists from COVID-19 are devastating for a developing country like Indonesia, as it reduces growth and increases poverty significantly. All regions in the country are affected, regardless if they are tourism-dependent or not. Patterns of impacts are different across regions though, depending on the economic structure of each region. Destinations or regions with international tourism attraction like Bali are strongly affected, with the most severe economic downturn compared to all other regions in the country. Non-tourism-dependent regions are not immune to the pandemic either. The trade flows among regions are the channel that the adverse impacts are transferable across regions. Non-tourism-dependent regions are affected either because of the losses of demand from tourism-dependent regions; or, indirectly via reduction of investment driven by the declining rates of return and the deterioration in the terms of trade.

Nationally, the poverty is estimated to deteriorate and revert back to the level of 2017–2018. But at the regional level, poverty in tourism-dependent region such as Bali is estimated to escalate significantly, setting back the achievement of poverty reduction in the region for more than a decade.

Changes in income distribution within Bali show that the real consumption declines relatively larger for the middle- and upper-income groups. This is due to the fact that these groups are employed across all types of occupations in both non-tourism-related and tourism-related businesses, thus taking up larger shares than the low-income groups.

Due to economic interconnection between regions, the decline in the number of inbound visitors causes not only a contraction in the popular tourism destinations, but also in regions that supply inputs into tourism activities. Banten, the main air transportation service provider, experiences relatively a strong economic contraction due to a decline in demand for its aviation services.

This study offers important policy implications. The findings of this study can assist the efforts to mitigate the poverty impact of losing international tourists to the country. In 2020, the Indonesian Government launched a fiscal stimulus of IDR695.3 trillion (US$ 47.6 billion), equivalent to 4.3% of the country's GDP ( Indonesian Ministry of Finance, 2020 ), the stimulus covered general support for all workers across industries. While such response was much needed and might help at the early stage of the pandemic, it may require more detailed policies during the recovery to ensure rapid growth. Importantly, specific income groups of specific regions would warrant more financial support than the others when poverty alleviation is an objective, as the COVID-19 effects are not equally distributed across industries, across regions and income groups. Support can be through options such as business assistance, household assistance, and employment assistance to address poverty impact along the tourism production chains and tourism-based region. This way, the poverty impact can be minimized more effectively, as poverty can cause many poor long-lasting outcomes ( Brooks-Gunn & Duncan, 1997 ; Larson, 2007 ).

Assistance is required to help the tourism sector survive during the COVID-19 years and provides a stepping-stone to enable business owners to quickly resume their activities when international tourism returns for a long-term sustainable development. The strategic recovery plan based on the impact pattern identified from this paper will help policymakers minimise the adverse impacts and ensure a rapid remedy for poverty. Findings from this analysis are important and applicable for other countries, in particular developing nations which face similar challenges on losing inbound tourists and rising poverty and, also to prepare for similar crises in the future.

Some limitations of this study need to be noted. First, tourism is not considered as an independent economic sector; rather it is a set of tourism-related economic activities. The introduction of tourism as a specific industry such as in ( Pham et al., 2015 ) could capture the impacts more accurately. Second, as the impact from the domestic visitor is not observable due to data unavailability, this study only focuses on demand impacts from the inbound sector. The analysis of the domestic sector could be carried out when the data becomes available. Future research could also utilize a dynamic model ( Dixon & Rimmer, 2002 ; Mahadevan et al., 2016 ; Ponjan & Thirawat, 2016 ) to capture the changes in magnitude and trends over time, particularly when comprehensive international tourism forecasts ( Song & Li, 2021 ) are now readily available alongside the opening up of the international borders.

Declaration of Competing Interest

The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.

Acknowledgement

The authors would like to thank Professor Horridge and Professor Yusuf for providing us the base model to develop this paper. We would also like to thank Professor Song, Dr Liu and anonymous Reviewers for their constructive comments and feedback to improve the quality of the paper.

Biographies

Tien Pham (PhD) is an Associate Professor at Tourism, Sport and Hotel Management Department of Griffith University, with strong interests in CGE modelling, economic impact analysis, tourism policy, tourism satellite accounts and demand analysis.

Anda Nugroho was staff of the Ministry of Finance, Indonesia, and currently is a PhD candidate at Griffith University. His research covers policy and impact analysis across a range of areas in tourism and economics.

Handling Editor: Kirilova Ksenia

Appendix A. 

Tourism contribution and broad poverty assessment by tourism region (continued)

Source: Statistics Indonesia, 2021

Appendix B. : Formula for poverty incidence

Following ( Warr & Yusuf, 2014 ), a Foster–Greer–Thorbecke (FGT) class of the headcount poverty ( P r ), is performed for each of them.

where c = 1, …, 100 percentiles of expenditure per capita ( y 1 is the poorest centile group, y 100 is the richest) and r = regions in the model database; y c , r = real consumption of the c th percentile household in region r ;{ y c , r } = a set containing all y c , r ; and y p , r = poverty line in region r .

Eq. (1) consists of two terms. The first term, max { c | y c , r ≤ y p , r } calculates the highest centile for which real consumption per capita is less than or equal to the poverty line, while the second term, y p , r − max y c , r y c , r ≤ y p , r min y c , r y c , r ≥ y p , r − max y c , r y c , r ≥ y p , r does a linear approximation to where poverty incidence lies between centiles c and c + 1.

Next, the change in the poverty incidence (Δ P r ) is calculated as:

where y c , r ′ is the initial real consumption per capita calculated as y c , r ′ = 1 + y ^ c , r 100 y c , r . The percentage change in per capita the real consumption, y ^ c , r is produced from the simulation in the model.

Appendix C. Indonesia and the five selected regions

Source: created by authors using the SAS template.

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