Indonesia Online Travel Overview: Arrived With a Bang, Brace for the Boom

Summary

With a population of more than 250 million and consistent annual gross domestic product (GDP) growth of 5-6% since 2004, the Republic of Indonesia has captured the world’s attention as the next big land of opportunity. Akin to other developing nations in Asia, Indonesia has all the right ingredients to be a fast-growing travel market. The archipelago is already a prominent inbound destination, and its domestic travel market is increasingly fueled by a flourishing economy, improving infrastructure and rising disposable income among its urban and working-class population. This report, a follow-up to The Indonesian Travel Market: Emerging from the Shadows (May 2012), presents a comprehensive view of the Indonesian travel marketplace with an emphasis on the air, accommodation and rail segments.

Indonesia’s travel market has plenty of upside, but it faces macroeconomic challenges that threaten to drag down growth. GDP rose at a sturdy rate in 2013, but that was the country’s softest growth since the global financial crisis. Still, Indonesia was the second fastest-growing Asian economy after China in 2013. But the effects of a rising current account deficit, devaluation of the rupiah and inflation have reined in the once enthusiastic outlook for the market. Overcoming macroeconomic headwinds and boosting consumer confidence will be pivotal for the newly elected president, Joko Widodo.