Indonesia’s tourism industry has been a cornerstone of its economy, driving cultural exchange and significant economic growth. As the world adjusts to life after the pandemic and changing traveler preferences, 2025 will be an essential year for travel industry in Indonesia.
This article will examine the trends, opportunities, and challenges shaping the future of Indonesia’s leisure sector.
Tourism rebound for Indonesia
Indonesia witnessed a resurgence in international travel sector in 2024, with over 1.9 million foreign tourist arrivals in October 2024. This number marks an increase of 22.1% compared to October 2023, with tourists from Malaysia, Australia, and Singapore.
Moreover, domestic visitors also showed a notable surge, amounting to 81.3 million arrivals, a significant increase of 29.83% compared to the previous year. These figures underline Indonesia’s resilience and adaptive strategies in rebuilding its travel appeal after the COVID-19 pandemic with several new initiatives.
Key drivers of Indonesia’s tourism growth
Indonesia’s vacation market has witnessed impressive growth in recent years, fueled by several key factors contributing to its ongoing success. These factors include:
Ecotourism and Sustainable Practices
The rise in tourist interest in sustainable infrastructure destinations reflects a growing awareness of ecological issues. Travelers are now more focused on minimizing their environmental impact and supporting preserving natural resources. This trend highlights the importance of balancing travel industry with ecological conservation efforts.
Infrastructure Development
The ongoing enhancement of supporting infrastructure, such as airports, roads, and hospitality facilities, has significantly improved connectivity and amenities, contributing to a better overall travel experience.
Supportive Government Policies
The Indonesian government has implemented strategic initiatives to enhance its tourism development plan. One of these initiatives is introducing a simplified visa policy designed to facilitate easier entry for foreign tourists.
Digital Transformation
To attract more visitors to Indonesia, improving online marketing, making booking easier, and offering virtual tours is crucial. These strategies will make Indonesia’s rich cultural and natural offerings more accessible and attractive to potential visitors.
Indonesia’s tourism outlook in 2025
With its continuous increase in tourist arrivals and improved infrastructure, Indonesia offers immense tourism potential in the upcoming year. Here’s the highlight to Indonesia’s travel industry outlook in 2025:
1. Projected Growth in International Arrivals
The leisure sector in Indonesia is forecasted to experience significant growth, aiming at 16 million foreign visitors in 2025, driven by relaxed travel restrictions and increased interest in Southeast Asia.
2. Rising Popularity of Secondary Destinations
Emerging tourist spots such as Lake Toba, Mandalika, and Labuan Bajo will be continuously promoted to diversify Indonesia’s leisure destination for foreign visitors.
3. Expanding Wellness and Medical Tourism
The global shift toward wellness and medical sector has positioned Indonesia as an attractive destination for travelers seeking rejuvenation. Luxury spa retreats in serene regions continue to attract tourists with their holistic wellness services.
Read more: Start tourism investment in Bali and Lombok
Expanding Indonesia’s tourism horizons
The Indonesian government will promote Super-Priority Destinations such as Borobudur, Likupang, Mandalika, Lake Toba, and Labuan Bajo to attract high-quality tourists and expand national tourist destinations. This initiative will be implemented over the next 5 years by improving the region’s infrastructure and transportation accessibility.
Niche markets, such as Halal vacation and senior-friendly travel options, are also unlocking new demands. Indonesia is strengthening its competitive and inclusive travel hub position by diversifying its offerings to specific tourists needs.
Read more: 4 Ways to Benefit from Growing Tourism in Semarang
Challenges in Indonesia’s travel industry
Despite its thriving opportunities, Indonesia’s tourism sector poses significant challenges in 2025. Businesses must explore the obstacles to seamlessly navigate its industry’s strategic potential, with key challenges as follows:
- Overtourism: We can use several strategies to reduce challenges in popular tourist destinations. These include setting visitor limits, promoting alternative tourist spots, and encouraging travel during off-peak seasons.
- Climate Risks: Consistently promoting eco-friendly tourism can help reduce risks associated with environmental degradation and increase awareness of sustainable practices.
Simplify your tourism business entry in Indonesia
Indonesia’s travel industry is poised for significant growth in 2025, offering tremendous opportunities to tap into its dynamic tourism business landscape. InCorp can help you seize the opportunities in Indonesia’s tourism sector with simplified company registration and investor KITAS service.
Why choose InCorp?
- Seamless market entry: Our high-quality assistance will minimize the complexities of business setup and ensure smooth business operations in Indonesia.
- Comprehensive support: We provide end-to-end services to comply with local regulations and requirements.
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Disclaimer
The information is provided by PT. Cekindo Business International (“InCorp Indonesia/ we”) for general purpose only and we make no representations or warranties of any kind.
We do not act as an authorized government or non-government provider for official documents and services, which is issued by the Government of the Republic of Indonesia or its appointed officials. We do not promote any official government document or services of the Government of the Republic of Indonesia, including but not limited to, business identifiers, health and welfare assistance programs and benefits, unclaimed tax rebate, electronic travel visa and authorization, passports in this website.
Verified by
Ales Cina
Consulting Manager at InCorp Indonesia
Aleš manages solution delivery at InCorp Indonesia, optimizing incorporation processes and client relationships. His experience in internal auditing, retail, and sales offers valuable global insights. Aleš, with a degree in Economics and Finance from the Czech Republic, helps clients navigate cross-border business challenges, focusing on cultural and legal insights.
Frequently Asked Questions
- Business Identification Number (NIB)
- Standard Certification
- Standard Certification is necessary for medium-low and medium-high-risk businesses
- Licenses/Permits
- Local Company (PT): 100% local ownership.
- Foreign Company (PT PMA): can be entirely owned by foreigners; however, restrictions in business sectors apply
- Representative Office: a branch of the parent company overseas whose purpose is to conduct marketing-related activities without generating income or profits
A nominee arrangement is an arrangement that uses another person’s name as a subject. In Indonesia, it is prohibited. This restriction aims to prevent situations where a company is owned by one party but beneficially owned by another. According to the law, any nominee agreement between a local party and a foreign investor is deemed null and void.
In Indonesia, the licensing system has been updated with the implementation of the Omnibus Law. Businesses are categorized into four risk levels based on the PMA company classification. Licensing requirements vary accordingly, with three main types:
Low-risk businesses needing only an NIB
High-risk businesses require licenses/permits
Additionally, basic requirements, including business location, must be met. Many licensing processes are facilitated through the Online Single Submission (OSS) platform managed by the Investment Coordinating Board (BKPM).
In a PMA Company in Indonesia, shareholders typically have limited liability, meaning they’re not personally liable for agreements or losses beyond their shareholding, except in certain circumstances. Liability may extend if the company isn’t properly established or if shareholders exploit the company in bad faith, engage in unlawful acts, or deplete company assets to the detriment of creditors.
In Indonesia, there are three company types that you can establish based on your business nature, requirements, and preferences.
