Indonesia - Travel & Tourism: A growing tourism market (Strategy, Performance and Risk Analysis)
The total tourist volume in Indonesia increased at a CAGR of 1.4% over 2012-16, from 260.4 million in 2012 to 275.6 million in 2016, and is forecast to increase at a CAGR of 4.1%, from 281.0 million in 2017 to reach 331.2 million by 2021. The growth is primarily attributed to increasing domestic tourist volumes and promotional tie-ups, the launch of tourist centric campaigns, increased arrival of tourists from countries such as China, and the relaxation of visa policies by the government.
In terms of passenger airlines, Indonesia showcased strong growth for the number of seats available, number of seats sold, and total passenger revenue. This is due to the increased popularity and usage of low cost carriers, as well as the launch of new direct international routes between Indonesia and other countries, including India.
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Domestic trips to drive tourist volumes
The total tourist volume in Indonesia increased at a CAGR of 1.4%, from 260.4 million in 2012 to 275.6 million in 2016, and is forecast to increase at a CAGR of 4.1%, from 281.0 million in 2017 to 331.2 million in 2021. Growth is primarily due to the rising number of domestic leisure and business trips. Total domestic trips increased at a CAGR of 1.1%, from 244.9 million in 2012 to 256.3 million in 2016, and are forecast to increase at a CAGR of 4.0%, from 260.8 million in 2017 to 305.3 million in 2021 due to rising disposable incomes and improved connectivity between major cities and remote locations across Indonesia’s provinces.
Increased tourist volumes to drive passenger airline revenue
Total passenger airline revenue is forecast to increase at a CAGR of 4.2%, from US$8,581.7 million in 2017 to US$10,121.7 million in 2021. Over the forecast period, growth will be driven by the rising revenue of low cost carriers from international routes to and from Thailand, Singapore, and Malaysia, along with regional domestic routes. Increased revenue of full service airlines from long-haul international routes will also support the market.
Upscale hotels to drive hotel revenue
Total hotel revenue increased at a CAGR of 6.7%, from US$6,824.6 million in 2012 to US$8,867.7 million in 2016, and is forecast to increase at a CAGR of 9.4%, from US$10,015.6 million in 2017 to US$14,396.1 million in 2021. Growth is due to the increase in revenue from the upscale and luxury hotel segments, owing to the rise in international tourist arrivals for business and leisure purposes.
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