Government’s Efficiency Measures Could Hurt Tourism Industry: Association

Jakarta. The austerity measures imposed by President Prabowo Subianto on all ministries and state agencies could hamper Indonesia’s efforts to attract foreign tourists due to significant cuts in the tourism promotion budget, the Indonesian Travel Agency Association (Asita) warned on Saturday.

The government has set an ambitious target of 16 million international tourist arrivals for 2025, banking on the upward trend in foreign visits. In 2024, Indonesia recorded 13.9 million foreign arrivals, the highest since the Covid-19 pandemic in 2020.

Asita is urging the government to reconsider the cuts and provide stronger financial support to ensure that Indonesia remains competitive in the ASEAN tourism market.

The industry association expressed doubt that the target could be achieved under the government’s aggressive cost-cutting measures, which have significantly impacted the Tourism Ministry’s budget.

Asita Secretary-General Budianto Ardiansyah criticized the budget reductions, warning that they would limit promotional efforts and weaken Indonesia’s competitiveness against neighboring countries such as Thailand and Malaysia.

“Budget cuts in the Tourism Ministry will certainly affect the national tourism industry, especially travel agencies. We will soon start feeling the impact of these spending reductions,” Budianto said in Jakarta. “The foreign tourist target has been significantly increased, yet the budget has been slashed — this is contradictory.” 

Tourism Ministry’s Budget Reduction

It remains unclear exactly how much the Tourism Ministry’s budget will be cut. However, it has historically received one of the lowest allocations among ministries.

Last year, it was decided that the Tourism and Creative Economy Ministry was allocated Rp 1.7 trillion for the 2025 budget year. The ministry initially requested an increase to Rp 3.4 trillion but was unsuccessful.

Following Prabowo Subianto’s inauguration in October, the tourism and creative economy sectors were split into two separate ministries, further reducing the Tourism Ministry’s budget to Rp 1.4 trillion.

How Indonesia Compares to Other ASEAN Countries

Indonesia has been trying to catch up with neighboring ASEAN countries in foreign tourist arrivals. In 2023, Thailand led the region with 28 million foreign tourist arrivals, followed by Malaysia (17 million), Vietnam (12.6 million), the Philippines (5.4 million), and Singapore (13.6 million).

With a smaller promotional budget, Indonesia could struggle to compete with Thailand and Malaysia, which have well-funded tourism campaigns and broader international reach.

Budianto warned that a smaller budget would result in reduced overseas marketing efforts, potentially leading to fewer international arrivals.

“Of course, we at Asita want the target of 16 million arrivals to be achieved. The association will continue to promote Indonesia’s tourist attractions independently, with or without government assistance,” he said.

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