Indonesia is a vast country with so many unfolded opportunities in the tourism sector. Indonesia GDP grew positively at the average of around 5% per annum prior to 2020, despite the GDP in 2020 dropping to -1,5% per annum due to the Covid-19 pandemic. The tourism sector also grew positively with tourist visitation growing at around 10% per year prior to 2020. With those figures, the tourism contribution to Indonesia GDP stagnates below 6%, showing that there is an opportunity to optimize the industry to further help boost the economy and enhance competitiveness in the global world.
Tourism development has been actively rolled out throughout the country, along with the Government support in its Super Priority Tourism Destinations (Destinasi Super Prioritas) and Special Economic Zone (or Kawasan Ekonomi Khusus = KEK) establishment. Not only those destinations that are already gaining popularity like Lake Toba and Borobudur, but also several ‘new’ tourism destinations like Mandalika in Lombok, NTB, Singhasari in Malang, East Java, or even Likupang in Minahasa, North Sulawesi. The tourism destination developments generally take a notable land area ranging from 100 ha to 1,500 ha and planned to host a wide range of tourism facilities and attractions based on each characteristic. Those massive developments are expected to be the new drivers of the national economy and further buoy the new development of other tourism destinations in other areas.
With such a big tourism masterplan across the country, infrastructure thus comes one major element to be addressed. Infrastructure undeniably plays an important role to stimulate the tourism development. The Government is currently carrying out a number of infrastructure developments to help boost the tourism growth and further attract not only visitors but investors as well. The developments are to focus on improving connectivity, water resource facilities and other supporting facilities at the destinations.
The Mandalika which is developed by ITDC is currently undergoing development in many aspects. The massive development of a total area of around 1,250 ha has been started since 2016 and to date, a 4 km main road infrastructure has been built along with public facilities and social facilities. The project is also slated for another development stage as it has confirmed to receive infrastructure fund for Asian Infrastructure Investment Bank (AIIB) to continue their infrastructure development in parallel with the construction of the street circuit and amenities such as hotels, retail, conventions, and other developments. The Government has also provided support to build direct access roads from Lombok International Airport, the airport’s runway length addition and expansions, cargo and cruise facility development, addition of electricity capacity in the region, and the opening of new bus routes serving a number of areas in Lombok to The Mandalika.
In the Lake Toba KSPN project, the Government is currently doing the expansion works of Silangit International Airport and the construction of Sibisa International Airport. The Government is also running two national road projects around the lake, Lake Toba ring road and Samosir ring road, and also setting up the internet network around the lake area. Aside from that, infrastructure development in Lake Toba KSPN project has also been rolled out, including water resources infrastructure, roads and bridges, settlements and also housing.
Then what other factors define the competitiveness level of tourism destinations?
Infrastructure is crucial to tourism growth and competitiveness. However, when we’re talking about infrastructure in the tourism framework, it’s not only about roads, electricity, and water supply. It’s everything about connectivity (air, ground, and port, and not to mention network (internet) connectivity), as well as tourist service infrastructure (the availability of sufficient quality accommodation, resorts and entertainment facilities, public facilities, also access to supporting facilities like car rentals, ATMs, and others).
The World Economic Forum in their report – The Travel & Tourism Competitiveness Report – shows 14 pillars that define the travel and tourism competitiveness index at the country level. Translating these pillars into a tourism destination framework, there are so many factors to enhance competitiveness level beyond ‘a mere of’ infrastructure development. Developers should be aware that safety and security are crucial, health and hygiene matters, and ICT plays an important role in this digital era. Above all, it is essential that tourism promotes sustainability, taking full account of its current and future economic, social and environmental impacts, addressing the needs of visitors, the industry, the environment, and host communities.
It is true that infrastructure is a major component in destination development. However, along with it destinations should prepare themselves with a good development concept, well-crafted masterplan, a true workable business plan, good corporate management, and constant actions to promote the project simultaneously to attract visitors and investors as well. Government support is essential, but a destination that shows a unique character and exceptional performance is believed to win the market and continue to lure investment appetites.
Author
Iswin Hudiarto Principal/Lead Consultant
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