Bali Yet to Reap the "Benefits" of the Weakening Rupiah
Bali Yet to Reap the “Benefits” of the Weakening Rupiah
Jakarta, CNBC Indonesia - Throughout 2025 and into early 2026, the rupiah has been under continuous pressure, reaching its weakest level in history. However, the rupiah’s depreciation has not been sufficient to boost foreign tourist numbers, particularly to Bali.
The rupiah’s exchange rate has plummeted by 3.6% throughout 2025 and has already weakened by 3.12% this week. The rupiah is now at the level of Rp17,200, marking its weakest point in history.
This weakening should theoretically act as a catalyst for a surge in tourists to Bali, as holiday costs become cheaper for foreign visitors. Yet reality tells a different story, with tourist numbers actually declining.
Exchange Rate Discount Not Enough to Attract Tourists
In theory, the depreciation of the domestic currency creates a strong appeal for foreign tourists by enhancing their purchasing power.
Bali now offers a more affordable experience compared to before, from accommodation to daily consumption. This situation typically serves as the main driver for increased visits, especially from the European market.
However, under current conditions, the advantage from currency weakening has not been able to counterbalance other more dominant factors, thus diminishing the price incentive’s appeal in driving higher tourist arrivals.
More than 8,000 people have been forced to postpone their trips. Most had booked tickets with transit routes through Doha, Abu Dhabi, and Dubai before heading to the US and Europe. As a result, European tourist arrivals are now down by around 800 passengers per day.
Causes of Declining Tourist Numbers
The drop in tourist numbers is largely driven by external factors, particularly geopolitical tensions in the Middle East. Conflicts involving Iran have caused disruptions to international flight routes, especially those from Europe to Asia.
Cancellations of dozens of flights and trip postponements by thousands of tourists indicate that accessibility has become the primary obstacle. In this context, even though Bali is cheaper, travel barriers make the destination difficult to reach.
Domestic Economic Pressures Worsen Sentiment
On the other hand, the rupiah’s weakening reflects broader domestic economic pressures. Factors such as rising foreign debt, weakening foreign investment, and economic policy uncertainty also influence global perceptions of Indonesia.
This negative sentiment not only affects financial markets but also the tourism sector, which heavily relies on international confidence. When economic stability is questioned, travel decisions become more cautious.
Bali’s current situation underscores that price is no longer the sole factor in attracting tourists. Accessibility, geopolitical stability, and confidence in economic conditions are far more determining variables.
In a global environment full of uncertainty, the price advantage from currency depreciation can easily be overshadowed by greater risks.
Data from the Central Statistics Agency (BPS) shows that tourist visits to Bali have been steadily declining since July 2025.
This contrasts with Japan, which has reaped a harvest of tourists due to the yen’s weakening since 2025.
The Japan National Tourism Organization reported that 3,466,700 foreign tourists visited Japan in February 2026. Although not an overall record, this figure represents the highest number of foreign visitors in February in history.
The number of tourist visits also surged 15% to 42.7 million in 2025.