Tourism sector in Indonesia is open to investment opportunities, according to Minister of Tourism and Creative Economy Sandiaga Salahudin Uno. He said his ministry has focused on accessibility, infrastructure and amenities for investment in tourism sector.
“Marine resorts are also part of the infrastructure,” he told Indonesia Business Post on September 12, 2022.
According to Sandiaga, eco-friendly and nature-integrated resorts – such as those developed by Bobobox in Likupang in North Sulawesi and Lake Toba in North Sumatra – have been increasingly popular. The concept of tourism has evolved into a more personalized, more localized and of a smaller size from a tourism perspective.
A second investment opportunity, the minister said, was the transition from fossil fuels to renewable energy sources. “This will open up opportunities for a more efficient and effective waste and water management,” Sandiaga added.
More events as attractions are the newest sub-sector of tourism. The ministry intends to invite more event organizers to arrange MICE (meetings, incentives, conferences and exhibitions), sports tourism, digital-based activities, sustainability and health events. “As a result, there is an opportunity since every tourism destination requires world-class support services,” he explained.
Inviting investors
In addition to targeting foreign investors, the tourism ministry has encouraged domestic investors and businesspeople to invest in tourism sector, particularly in the five super priorities and eight special economic zones.
“Foreign investors remain the largest investors in tourism sector,” he said. He added that based on data from the Investment Ministry/Investment Coordinating Board (BKPM), investment realization reached US$ 51.8 billion in the second quarter of 2022, comprising 49% of foreign investment and 51% domestic capital investment.
The five super priority tourism destinations have realized a total investment of US$ 487.3 million, comprising of 53% foreign and 47% domestic investments. “We can develop creative economic products to support the hospitality industry,” Sandiaga said.
Investing in special economic zones for tourism will require investors to secure permits, incentives, fiscal and non-fiscal facilities as well as supporting infrastructures for the special economic zones.
Super-priority destinations
Sandiaga explained that his ministry has focused on five super priority tourism destinations namely Lake Toba, Borobudur Buddhist temple in Central Java, Mandalika in West Nusa Tenggara, Labuan Bajo in East Nusa Tenggara and Likupang. The ministry also focused on eight tourism special economic zones and 12 sustainable tourism zones. The eight tourism special economic zones would need a total budget of IDR 226.79 trillion for investment and financing. In contrast, three tourism authority bodies – overseeing Borobudur, Labuan Bajo and Lake Toba – requires a total of IDR 6.7 trillion for investment and funding.
Several domestic and foreign investors have presented their plans to invest in the five super priority
tourism destinations. The planned investments would be for tourism and other supporting sectors, such as energy, information technology, telecommunications and real estate. The total investments are about IDR 172.2 billion or US$ 11.67 million. In contrast, the current commitment value is IDR 1.552 trillion
or US$ 106.24 million, while the value of investment interest is IDR 1.186 trillion or US$ 81.19 million.
The companies that have indicated their commitment are PT Tobanta Nauli Indah in Lake Toba, PT Luxor Graha Propertindo in Borobudur, PT Solar Dex Indonesia in Labuan Bajo and PT Dayamitra Telekomunikasi in Likupang as well as Ciputra Residence in Mandalika.
Sandiaga said the Indonesia Tourism Development Corporation (ITDC) was responsible for managing
Mandalika’s tourism destination. The company has committed IDR 17 trillion in total investment, including a master land utilization and development agreement with the VINCI Construction Grands Project (VCGP) worth IDR 14 trillion. VCGP, a French state-owned company Vinci Construction subsidiary, is involved in the infrastructure project design and construction, including the construction of the Mandalika International Circuit, gradually realizing a 15-year investment commitment.
