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Spire Research and Consulting, Indonesia - Overview and Trends in Tourism Sector

Presented at Noppen SEA Hotel Expansion Summit 2014, Jakarta, 29-Nov-2014.

1. The facts and figures on tourism sector developments in Indonesia
2. Impact and challenges - specifically toward hotel expansion prospects

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Spire Research and Consulting, Indonesia - Overview and Trends in Tourism Sector

  1. 1. 1 Overview and trends in Tourism sector Jeffrey Bahar Deputy Chief Executive Officer Spire Research and Consulting 29 October 2014
  2. 2. 2 Stator Number of visits to Indonesia (2009 – 2013) 10,000,000 9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 • Description of the company’s products 2,000,000 • 1,000,000 Description of the company’s business • Description 0 of the company’s technology • Description of the company’s contents 2009 2010 2011 2012 2013 Number of inbound tourists to Indonesia Top 4 countries No. Country 2012 2013 Increase 1 Singapore 1,271,443 1,400,000 10.11 % 2 Malaysia 1,133,430 1,200,000 5.87 % 3 Australia 909,176 928,279 2.10 % 4 China 618,223 747,921 20.98 % Total 8,044,462 8,802,129 9.42 % 8.8 million foreign visitors 245 million domestic trips Most foreign inbound trips are short and medium term (average 7.5 days), spending 13.13 million IDR per visit Top 5 destinations: Bali, Jakarta, Batam & Riau Islands, East Java, North Sumatera Major growth in arrivals from China, Philippines, Malaysia, India and Germany Foreign revenue: 321.57 trillion IDR Domestic revenue: 171.50 trillion IDR Domestic trips and spending increased due to a stronger middle income class Indonesia and Tourism Facts and Figures
  3. 3. 3 Stator Indonesia and Tourism Facts and Figures Indonesia GDP Forecast By Industry Total Economy Automotive Manufacturing Banking Financial Services Chemical Manufacturing • Description of the company’s products • Description of the company’s business • Description of the company’s technology • Description of the company’s contents Higher Education Travel and Tourism Education Mining 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% The total GDP expansion of the travel & tourism sector was 123% between 1990 to 2013 while the economy expanded by 171%. The GDP is expected to grow at an annual average of 4.6% over the next decade.
  4. 4. 4 Indonesia and Tourism Facts and Figures Growing popularity of Indonesia as a tourist destination shows growth of travel and tourism sector. Weakening of Rupiah boosted in-country tourism expenditure growth as local prices became cheaper. Growing internet penetration shows increase in online transactions especially through mobile phones. Inbound tourists came primarily from Singapore, Malaysia and China.
  5. 5. 5 Impact on Economy Tourism sector boosts economy GDP growth Rise in GDP percentage Employment Impact on exports Increase in tourist arrivals Foreign tourists Rise in number Entry points ASEAN Visa GDP growth Contributed to USD85 billion of Indonesia’s GDP in 2013 Tourism generated 9.1% of GDP in 2013 91% would do it if possible Employment: A total of 9.4 million jobs (direct, indirect and induced) sustained in 2013 Export figures expanded to 119% between 2000 to 2013. Travel and tourism represent a significant source of export revenue for Indonesia Source: Indonesia Investments (March 2014)
  6. 6. 6 Impact on Economy Tourism sector boosts economy GDP growth Rise in GDP percentage Employment Impact on exports Source: Indonesia Investments (March 2014) Foreign tourists arrivals for January to March 2014 was 2.2 million; 10.1% increase from last year Rise in number of tourist arrivals from 702,000 (February) to 765,000 (March) this year More than 6.81 million foreign tourists entered Indonesia through 3 entry points in 2013 (Bali, Jakarta and Batam) Implementation of a common ASEAN Visa by end of 2015 will boost foreign tourist numbers Increase in tourist arrivals Foreign tourists Rise in number Entry points ASEAN Visa
  7. 7. 7 Challenges • Competition in airline industry • Recent closure of smaller airlines due to debt issues • Lack of infrastructure • Curbs intra and inter island connectivity Source: World Travel and Tourism Council’s (WTTC) 2014 Economic Impact Research Report • Lack of English language proficiency amongst Indonesians • Creates communication gap between foreign tourists and locals
  8. 8. 8 Conclusion Indonesia’s tourism sector is poised for growth. Indonesia ranked as the 13th most attractive destination in Asia- Pacific to commence travel & tourism operations Promotional tourism campaign called “Wonderful Indonesia” launched by Tourism Ministry in 2012 Inbound arrivals reached a record 8.6 million in 2014 Robust growth for sector yet challenges remain. Sustainable tourism needs to implemented in order to maintain natural resources Proper infrastructure and better tourist facilities (hotels, restaurants and so forth) will lead to more investment
  9. 9. 9 Question & Answer
  10. 10. 10 Tel: (62) 5794 5800 Fax: (62) 5794 5808 Wisma 46, Kota BNI 25th Floor, Unit #07-09 Jakarta 10220 id.info@spireresearch.com www.spireresearch.com

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