APEC And Challenges Of Developing Tourism In RI

News Focus - APEC AND CHALLENGES OF DEVELOPING TOURISM IN INDONESIA by Azi Fitriyanti Jakarta, Sept 27 (Antara) - Bali will be hosting the APEC Summit 2013, an event where 21 economies in the Asia-Pacific region will come together to discuss a number of issues. Ngurah Rai International Airport has been renovated and ready to welcome the APEC delegation from October 2 to 8. A new toll road called "Mandara" was launched by President Susilo Bambang Yudhoyono on September 23 to reduce the distance between Denpasar and Nusa Dua, where APEC meetings will be held. The Indonesian government was keen to develop the infrastructure in the country to facilitate the APEC Summit since the event provides an opportunity to promote Indonesia`s image and development to the world. As the host for APEC, Indonesia has held about a hundred working level meetings throughout the year in various places across the country, such as the APEC Senior Official Meeting (SOM) I in Jakarta, SOM II in Surabaya, East Java, and SOM III in Medan, North Sumatera, to name a few. The APEC Economic Leaders Meeting in Bali, in which five thousand to seven thousand people are expected to attend, is a great opportunity for the country to promote its tourism sector, said Minister for Tourism and Creative Economy Mari Elka Pangestu. According to the United Nations World Tourism Organisation (UNWTO), tourism growth in the first quarter of 2013 reached 4.3 percent, with the Asia-Pacific region and emerging economies experiencing higher growth. UNWTO predicts that international tourist arrival will grow by 3-4 percent in 2013, and this means that more than one billion people are travelling in the world today. Pangestu noted that the growth of Indonesia`s tourism sector has outpaced the rest of the world. In 2012, inbound tourism grew at 5.2 percent, reaching the target of eight million visitors. At US$9.1 billion, Indonesia`s tourism sector was the fifth-largest contributor to the export of goods and services, accounting for four percent of the GDP and seven percent of the labour force absorption. In 2012, tourism contributed Rp321.57 trillion to Indonesia�s GDP or 3.9 percent share and absorbed 9.28 million people into the workforce or 8.37 percent. If one takes into account the indirect effects of tourism such as transportation and input to hotels and restaurants, the share of GDP will increase to nine percent. With seven thousand people expected to attend the APEC Summit, it will be the highest contribution in relation to other international events that Indonesia has hosted this year - in the first five months in 2013, international tourism grew by 5.8 percent - this year`s growth is estimated to be at least six percent. "We are optimistic that the target will be reached," she said. The main reason for optimism is the continued strong regional demand, especially in the Asia-Pacific region. In the first five months of 2013, there was 13.8 percent increase in the number of tourists from China; 10.3 percent from Japan; 13 percent from India; 16 percent from Thailand; and 13 percent from Hong Kong. The main reason for an increased tourism growth from these countries is proximity. Despite continued uncertainties in the world economy, ASEAN and East Asian economies are continuing to grow; recovery of the Japanese economy is evident too. Particularly in the region, China is the largest tourism outbound market in the world, with 10 million travellers in 2000 and 83 million in 2012. In fact, China is ranked first in international tourism expenditure at US$102 billion on an annual basis. Indonesia is intensifying promotional efforts to increase the number of visitors from China, with a target of one million visitors by 2014. "This is also a year of meetings, and APEC Summit is the peak event; hence through cooperation with local governments, we have made some efforts to promote tourism here," she said. From October 1 to 2, 2013, APEC will hold a high-level policy dialogue on travel facilitation in Bali, and Pangestu hopes that the members will come up with a deal to ease travelling license procurements among APEC economies. On the other hand, a committee member of Pacific Economic Cooperation Council (PECC) Djisman Simandjuntak said Indonesia should develop its infrastructure and improve its service. According to one estimate, to meet the growing demand for tourism in the next decade, Indonesia will be required to build 700 to 800 more new hotels, or an equivalent of 100 thousand rooms, which will create 200 thousand new jobs. Here, the government should be focused on the development of infrastructure and improvement of service. The government should ensure a conducive investment climate by developing priority programmes to develop infrastructure and provide incentives, in the case of Special Economic Zones in Tourism (Tanjung Lesung in West Java and in the pipeline of Mandalika in South Lombok) and the Master Plan for the Accelerated Economic Development (MP3I) for the tourism corridor of Bali and East and West Nusa Tenggara. Tourism services, including hotels, restaurants, and transportation need skilled and professional human capital, and the government should invest in this sector by providing educational and training programmes. According to the Travel and Tourism Competitiveness Report, published by the World Economic Forum (WEF) 2013, Indonesia was ranked 70th out of 140 countries. This might be an improvement from six years ago, when Indonesia was above the 100th rank. However, Indonesia is still below other countries in the region such as Malaysia (34), Thailand (43), and Singapore, which is in the top 10. "Indonesia is still weak in tourism services; hence, we need to improve in this area," he said. Another reason as to why Indonesia`s rank is still low, Simandjuntak said, is because Indonesia has not put tourism as a major commodity yet, compared to the push on agriculture or mining sectors. "Malaysia is focused on promoting its tourism sector, and it even uses its famous diaspora as the icon and massive infrastructure establishment to support its tourism sector; looking at this, Indonesia has to work harder," he added. Indonesia also needs to develop and promote destinations outside of Bali - 38 percent of all inbound tourists head to Bali, 27 percent to Jakarta, and 16 percent to Batam and Bintan islands. "To prioritise some potential destinations so as to ensure its sustainability, it is important to build necessary infrastructure, both physical and soft, and intensively promote them as alternative destinations to share the layer cake of tourism in Indonesia," said Simandjuntak. "Those are related to APEC`s priority and Indonesia`s efforts to promote connectivity through infrastructure, institution and people-to-people contact," he added.