Indonesia Struggles To Compete With Thailand And Malaysia In Tourism Despite Billions In Infrastructure Investments

Published on September 22, 2025

Indonesia, pinch its immense earthy beauty, rich | taste heritage, and bustling tourer destinations, has poured billions of dollars into processing its tourism infrastructure. Despite this dense investment, nan state continues to lag down location competitors like Thailand and Malaysia in position of tourist satisfaction, stay duration, and overall tourism performance. This discrepancy raises important questions astir why specified important spending yields comparatively constricted results and whether nan nation’s tourism strategy needs a basal overhaul.

Indonesia’s Tourism Sector: A Case of Overinvestment successful Infrastructure

The Indonesian government has placed a beardown accent connected expanding tourism infrastructure, focusing heavy on super-priority destinations such as Mandalika in West Nusa Tenggara and Lake Toba in North Sumatra. Millions of dollars person been allocated to these regions, pinch nan extremity of transforming them into world-class recreation hubs. However, contempt nan sizable financial commitment, nan existent effect of these investments has been humble astatine best.

The Limitations of Infrastructure-Centric Tourism Strategy

The underlying rumor lies successful nan attack itself. While building caller infrastructure for illustration luxury hotels, airports, and resorts tin boost nan quality of a destination, modern tourists demand much than conscionable beingness amenities. They activity authentic experiences, affectional connections, and taste stories that make a destination guidelines out. As a result, simply constructing much hotels aliases improving roads won’t needfully thrust semipermanent tourism maturation aliases meet nan evolving expectations of today’s global travelers.

Indonesia’s tourism strategy has frankincense acold focused connected an attack much aligned pinch that of a construction company, investing heavy successful beingness assets without placing capable accent connected nan taste and experiential aspects of travel. This has led to a business wherever monolithic infrastructure spending has produced only modest growth, leaving nan state susceptible to stronger-performing competitors successful nan region.

A Comparative Analysis: Thailand vs. Indonesia

Looking astatine nan broader picture, nan discrepancies between Indonesia’s tourism capacity and that of Thailand become glaringly evident. In 2024, Thailand welcomed approximately 35 cardinal visitors, contempt spending little connected infrastructure than Indonesia. This influx of visitors generated an impressive US$42.7 billion in revenue. Meanwhile, Indonesiaattracted just 13.9 cardinal tourists, pinch full tourism gross amounting to only $16.7 billion.

These numbers item a basal flaw successful Indonesia’s tourism approach. Despite outspending competitors successful infrastructure, nan federation has struggled to pull a comparable number of visitors, and restitution levels among those who do sojourn stay comparatively low. This suggests that location is simply a missing element—one that goes beyond conscionable improving physical infrastructure—that is important to driving nan semipermanent occurrence of a tourism sector.

The Role of Service-Dominant Logic successful Tourism

The cardinal rumor that underpins this disparity is simply a nonaccomplishment to understand nan evolving quality of modern tourism value. Traditional models of tourism, which attraction predominantly connected infrastructure, are progressively outdated. A displacement toward a service-dominant logic (SDL) approach is basal for nan early maturation of Indonesia’s tourism industry.

SDL is simply a mentation that emphasizes the co-creation of value through experiences alternatively than solely done tangible assets for illustration hotels and roads. It recognizes that tourists are progressive participants in their journeys, and nan worth they deduce from recreation comes not from nan destination itself but from nan experiences they create. This attack has been successfully adopted by galore starring destinations, helping them execute higher spending-to-earnings ratios compared to destinations that attraction connected infrastructure alone.

In statement pinch SDL, successful tourism destinations understand that the tourism experience is profoundly shaped by emotional factors, specified arsenic ambiance, societal interaction, and taste immersion. This penetration helps explicate why Thailand, for example, continues to outperform Indonesia in tourism, contempt nan latter’s larger investments successful beingness infrastructure.

What Modern Tourists Really Want

Research into tourist satisfaction highlights that nan astir important contributors to a successful tourism acquisition are ambiance and social interactions, not needfully nan value of nan beingness infrastructure. Tourists coming activity meaningful connections to the local culture, an engaging environment, and authentic experiences that make their travel memorable. Physical structures like hotels and airports, while necessary, do not by themselves create nan lasting entreaty that visitors desire.

In particular, visitors progressively want to prosecute pinch destinations successful ways that spell beyond simply visiting attractions. They want to beryllium immersed successful the local culture, study nan stories down nan landmarks, and acquisition nan destination arsenic thing much than conscionable a spot to stay. Cultural depth is what creates a lasting entreaty for tourists, making it much apt that they will return aliases urge nan destination to others.

Moving from Infrastructure to Experience

To reside these challenges, Indonesia must displacement its tourism strategy to spot much accent connected taste engagement and experience-driven tourism. Rather than focusing solely connected building infrastructure, nan authorities should prioritize developing taste tourism programs, supporting section artisans, promoting sustainable recreation practices, and enhancing community involvement in tourism.

Key steps could include:

• Creating authentic taste experiences: Tourists should person nan opportunity to prosecute pinch section traditions, specified arsenic Balinese creation performances, accepted cooking classes, aliases visits to indigenous communities successful Papua.
• Promoting sustainable tourism practices: Eco-tourism initiatives tin beryllium developed to guarantee that visitors person a affirmative effect connected nan situation while exploring nan country’s earthy beauty.
• Fostering stronger connections betwixt visitors and locals: Building taste exchanges and offering visitors much opportunities to interact pinch section communities tin supply a deeper and much rewarding recreation experience.

Enhancing Tourism pinch Emotional Engagement

Another area wherever Indonesia tin amended is by fostering emotional connections between visitors and nan destination. By highlighting nan island’s unique stories, taste landmarks, and history, Indonesia tin connection visitors a much enriching and meaningful acquisition that goes beyond nan beingness structures of tourism. Engaging pinch nan island’s rich | traditions, welcoming section communities, and sustainable practices will guarantee that visitors time off pinch unforgettable memories, which successful move will lead to higher visitant satisfaction and longer stays.

Conclusion: Redefining Tourism successful Indonesia for nan Future

In conclusion, Indonesia’s tourism strategy must germinate to meet nan expectations of modern travelers. Infrastructure investment, while essential, cannot beryllium nan sole focus. The early of tourism lies successful creating memorable experiences, emphasizing cultural immersion, and fostering affectional connections pinch destinations. By shifting from a construction-focused exemplary to a culture-driven approach, Indonesia tin guarantee that its tourism assemblage thrives and competes pinch location leaders like Thailand and Malaysia. Through this transformation, nan state tin meet nan increasing demands of world travelers and unafraid a sustainable and prosperous early for its tourism industry.