Tourism Must Become Indonesia’s Next Big Engine of Inclusive Growth

Indonesia enters 2026 with a sense of renewed confidence. Our economic fundamentals are stable, inflation is under control, investment continues to expand, and global institutions forecast Indonesia’s growth to hover around 5.2 percent next year. This positions us among the world’s fastest-growing large economies at a time when many nations struggle with slowing demand and geopolitical uncertainty.

Yet sustaining and accelerating this growth requires more than macroeconomic resilience. It demands strategic sectors capable of generating jobs, driving regional equality, and attracting high-quality investment. Tourism long viewed merely as a cultural asset or leisure industry must now be recognized as one of Indonesia’s most powerful engines for inclusive and sustainable economic transformation.

In a world searching for destinations that are safe, meaningful, culturally rich, and environmentally responsible, Indonesia holds unparalleled advantages. The question is whether we can mobilize a national strategy that turns this potential into broad-based prosperity.

A Turning Point for the Indonesian Economy

To understand why tourism is poised for a breakout, we must look at the structure of Indonesia’s 2026 economic landscape.

The government’s fiscal strategy continues to prioritize infrastructure, digital transformation, and social protection. Bank Indonesia forecasts inflation within a comfortable 2.5–2.7 percent range, with stable exchange rates and robust credit growth. Investment in housing, IKN Nusantara, and strategic industrial sectors is accelerating, creating what economists call a “high-confidence economy.”

This stability is not accidental it is the result of years of disciplined policymaking and an unwavering commitment to resilience.

But stability alone will not carry us into the next decade. We need sectors that multiply opportunities for millions, not just thousands. Tourism is that sector.

Why Tourism Matters More Than Ever

Tourism is not only about foreigners coming to Bali or Labuan Bajo. It is an ecosystem that cuts across hospitality, transportation, culture, culinary, creative economy, MSMEs, and community livelihoods. It brings income to regions far from major industrial hubs, from Wakatobi to Toba, from Raja Ampat to Morotai.

In 2025, Indonesia recorded 5.63 million foreign tourist arrivals in just five months a strong sign of global confidence. Domestic tourism remains extraordinarily resilient, supported by rising incomes and increasingly seamless mobility between islands.

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But the real story is not the tourist numbers it is the opportunity they create.

Tourism is one of the few sectors where:

• MSMEs directly benefit from visitor spending

• Communities become central actors, not peripheral

• Cultural heritage becomes economic strength

• Environmental conservation aligns with economic value

• Young people gain access to future-facing jobs

If developed carefully, tourism can be the bridge that connects Indonesia’s economic ambitions with its social and cultural richness.

Three Strategic Opportunities Indonesia Must Seize

1. Sustainable and High-Value Tourism

The world is shifting from mass tourism to sustainable, experience-driven, high-value travel. Indonesia must lead this transformation.

Eco-resorts, marine conservation tourism, and low-impact nature destinations are gaining global traction. Regions like Wakatobi, Raja Ampat, and Toba are uniquely positioned for this shift. With proper carrying-capacity management, they can become global icons of sustainable tourism protecting ecosystems while generating prosperity.

2. Digital-Driven Tourism Ecosystems

Digital platforms are reshaping travel behavior. Smart destinations using data analytics, real-time visitor management, and AI-based pricing will outperform those relying on traditional approaches.

Digital adoption must be mandatory across tourism businesses from e-payments to online booking to transparent data reporting. MSMEs, which form the backbone of our tourism value chain, need support to enter the digital economy.

3. Community-Based Tourism as a National Strategy

Tourism is at its strongest when communities are at its center.

Village tourism, homestays, cultural corridors, agro-tourism, and creative clusters are emerging across Indonesia. These initiatives generate direct income for local families, preserve heritage, and reduce poverty. Scaling this model to 1,000 community-based tourism villages by 2028 would create a national movement of economic empowerment.

What Government Can Do Next

Tourism is not an isolated sector. It requires coordination across ministries, industries, and regions. To unlock its full potential, Indonesia must implement four strategic reforms:

1. Establish a Tourism Investment One-Stop Center

Investors need streamlined licensing, clear destination blueprints, and consistent aftercare.

2. Deploy Incentives for Green and Sustainable Tourism

Tax incentives, concessional financing, and ESG certification should reward responsible tourism development.

3. Strengthen Domestic and International Connectivity

Tourism cannot flourish without reliable flights, ports, and intermodal transport to priority destinations.

4. Launch a National Tourism Data Center

With real-time insights, Indonesia can manage visitor flows, forecast demand, and make evidence-based policy decisions.

Toward a New Tourism Vision for Indonesia

Indonesia stands at a strategic inflection point. With the right policies, tourism can become a pillar of economic strength and a catalyst for inclusive development lifting communities, preserving nature, and showcasing Indonesia to the world.

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Our goal must not be to attract the most tourists, but to attract the right tourists those who appreciate culture, respect nature, invest in communities, and contribute meaningfully to local economies.

As Indonesia moves toward 2026 and beyond, tourism should not be seen merely as a sector to support, but as a strategic pathway to national transformation.

Indonesia is ready. The world is watching. And the opportunity is ours to seize.