The Ministry of Tourism and Creative Economy made a statement that foreign investment in the tourism sector was permitted up to 100% provided the foreign investor was engaged with local partner so there could be sharing of knowledge in the collaboration.
Indonesia was an attractive destination country to investors as indicated by increasing performance at home recently. This was part of the concept of Hospitality Investment World [HIM Indonesia 2014 conducted by the Ministry in collaboration with Terrapin Singapore as agenda to offer collaboration opportunity and investment to all tourism operators of the tourism industry.
The activity had been exercised for the third time was a forum which connected local and international hotel owners, operators and hotels and service management to dissect strategy for tourism and hotel growth in Indonesia. Indonesia's competitiveness turned stronger while international perception of Indonesia was bettered.
The World Travel and Tourism Council [WTTC] mentioned that the role of tourism was becoming more significant in global economy. In 2013 the world's tourism market was worth USD 7 trillion, while in 2014 it was expected to grow by 4.2%. Indonesia was rated as a country having successfully grabbed the momentum, so in G-20 meeting Indonesia was acknowledged as a country of high tourism growth.
WTTC estimated this year Indonesia had the chance to book growth of international tourism by 14.2% and domestic tourism by 6.3%. Contribution of the private sector to national economy was predictably 8.1%.
It was disclosed that strengthening of Indonesia's competitiveness attracted investors. Data of The Travel and Competitiveness Index released by WEF 2013 had it that Indonesia's competitiveness in tourism had elevated by 4 grades. In 2012 Indonesia's ranking was 74 and in 2013 was in 70th position with strength in price, natural resources, and priority of tourism.
Indonesia was rated to excel in culture category, historical heritage and natural beauty. Bettered perception of Indonesia also attracted investors to invest in Indonesia. Various efforts was done by the Government and stakeholders of tourism to promote investment of tourism in Indonesia. Increase of in investment in tourism would have its positive impact on people's welfare as it would open employment opportunities.
Indonesia was acknowledged as a country having high growth in tourism at the G-20 meeting. By quarter I 2014 realization of investment in tourism had come to USD 130.13 million, with Foreign Investment [PMA] posted at USD 117.24 million and Domestic Investment I PMDNIJ amounting to USD 12.86 million.
Compared to investment realization in quarter 1 2013 amounting to USD 36.51 million it was an increase of 256.43%. It showed that investment in tourism was the focus of investors planning to invest in Indonesia. Indonesia excelled in the culture and heritage and rich natural resources category.
In terms of price, Indonesia was seen as a destination of high competitiveness because in terms of "value for money" was in 9th category of 140 countries surveyed by WEF. Indonesia was also rich in tourist objects not fully developed and investors were needed to develop them.
The Government should promote investment in tourism through various efforts. Development of tourism would open job opportunities and promote people's welfare. There were some promising aspects in Indonesia's tourism like green living among the people in combination with rich natural resources and bio diversity for developing eco-tourism.
Latest survey by the Japan Bank for International Cooperation [JBIC] mentioned that Indonesia was in highest rank in terms of global businessmen's perception as investment destination country for the next 3 years or so.
In a JIBC survey which involved 488 businesspeople as respondents in 2013 they were asked to choose 5 countries rated as promising high prospect for investment for the next 3 years. The result was that 219 respondents [44.9%] included Indonesia as worthy of consideration
The survey outcome made Indonesia to elevate to first position which was previously held by China. In second position was India 43.6%; third position Thailand 38.5%; fourth China 37.5% and fifth Vietnam 30.3%.
Hotelier circles who were directly related to national tourism industry rated Indonesia as the most prospective budget hotel in the Asia Pacific region.
However for future development, they expected support and incentive from the Government.
What was most expected was development of physical facilities in tourism location centers, i.e. land, sea and air transportation, good electricity and telecommunication facilities- other supporting factors like hotel rooms with complete facilities including Internet and banking access.
The development of physical infra structure was needed to step up effectiveness of tourism on the arranger side or tourist side. To the tourists, distance never matters, only duration of journey does. It was no use to cover a short distance when it took long time to cover it. Therefore transportation was vital, either the mode or the road condition.
Success in developing tourism would jack up national GDP and increase forex reserves. So aggressive promotion campaign was most important to be launched through various media including digital social media.
For reference, now the Government of China was building 2 high towers in Beijing and Shanghai, 'designed to attract foreign tourist. In the future, China's economic growth would rely more on tourism than export. Indonesia should be aware of it so as not to lose momentum because there were tourist attractions which were not managed at best. (SS)
Business New - May 16, 2014