Indonesia tourism recovery uneven despite rising international arrivals

Indonesia’s international visitor arrivals are on track to return to pre-pandemic levels in 2026, but the wider tourism industry has yet to fully recover, with accommodation occupancy and air passenger numbers remaining below 2019 levels, according to the Confederation of Indonesian Tourism Associations (GIPI).

Speaking at a press conference for GIPI’s 2026 national leadership meeting, Hariyadi Sukamdani, GIPI chairman, said Indonesia recorded 10.58 million international visitor arrivals from January to August 2026, up 5.38 per cent year-on-year, according to Ministry of Tourism figures. Arrivals could reach 16.2 million for the full year if the trend continues, slightly exceeding the 16.11 million recorded in 2019.

However, higher visitor numbers have not translated into a full industry recovery. Indonesia’s accommodation supply reached 34,702 units in 2025, up from 27,607 in 2021, while average occupancy stood at 49.26 per cent, below the 54.99 per cent recorded in 2019.

“Overall, the industry can be described as relatively stagnant. Supply has increased, but occupancy has not returned to 2019 levels,” Hariyadi said.

Aviation indicators also remain below pre-pandemic levels. Figures from the Indonesia National Air Carriers Association (INACA) presented at the briefing showed that Indonesia had 560 aircraft in 2026, compared with 616 in 2019. Domestic passenger numbers fell to 61.2 million in 2025 from 79.4 million in 2019, while international passenger numbers declined from 37.3 million to 34.7 million.

Hariyadi cited high aviation costs, rising labour expenses, complex licensing requirements and limited access to bank financing as pressures on tourism businesses. He called for stronger government support for promotion, noting that tourism-generated revenue was not being sufficiently channelled back into sector development.

He pointed to 5.03 trillion rupiah (US$282.6 million) in visa-fee revenue in 2024 and hotel and restaurant tax receipts in Jakarta and Bali, contrasting these with the Ministry of Tourism’s 2026 budget of around 1.8 trillion rupiah (US$101.1 million). He noted that the tax figures covered only two destinations, while local governments nationwide also collect hotel and restaurant taxes.

Meanwhile, Eddy Soemawilaga, AirAsia’s director of Indonesia affairs and strategic communications and president of the ASEAN Tourism Association, highlighted regional competition.

Vietnam recorded 14.4 per cent growth in international visitor arrivals from January to August 2026, compared with Indonesia’s 5.38 per cent increase. Cambodia, meanwhile, recorded a 44.4 per cent decline over the same period, according to its Ministry of Tourism. Eddy said a weaker rupiah could boost Indonesia’s price competitiveness, although high aviation costs remained a major constraint.

To turn demand into wider industry growth, GIPI plans joint promotions and tourism packages with the Association of Indonesian Tours and Travel Agencies and industry groups representing recreation parks and spas, targeting regional markets. In Malaysia, the initiatives will highlight destinations such as Padang, Medan and Bandung, while ferry links to Batam offer another channel for attracting regional visitors.

For domestic tourism, GIPI sees potential in emerging destinations, the creative economy and demand among Gen Z and active retirees, although strategies must reflect regional conditions. Outside Java, high airfares remain a major barrier, while in Java, GIPI hopes to make better use of existing connectivity to support tourist movements.