Indonesia seen to spend $6 billion on tourism in 1997

JAKARTA (JP): The annual compounded growth of Indonesians' personal travel and tourism spending will reach 7.7 percent over the next decade, according to the Britain-based WTTC.

In its special reports on Indonesia, the World Travel and Tourism Council (WTTC) said that in 1997, Indonesians' personal spending was expected to reach Rp 15.06 trillion (around US$6 billion).

"By 2007, this total is expected to more than double in real terms to Rp 31.67 trillion (1997 constant rupiah)," the report said.

The report was based on research conducted in collaboration with the WEFA Group, the Ministry of Tourism, Post and Telecommunications, the Indonesian Hotel and Restaurant Association, the Indonesian Travel Agent Association and PT Rajawali Corp. of Indonesia.

WTTC defines personal travel and tourism spending as the spending by Indonesian residents on travel and tourist products and services. This includes spending before, during and after a trip on travel and tourist services like flights, accommodation, car rental and so on, as well as merchandise purchased during or for the trip.

Travel and tourism is expected to account for 4.6 percent of total personal spending this year, the council said.

"Over the next decade, as Indonesia's economy grows, travel and tourism is expected to increase its share of personal consumption to 5.2 percent by 2007."

The council added that Indonesia's relatively low level of personal travel and tourism spending reflects Indonesians' limited disposable incomes and thus the limited amount of domestic and international travel undertaken by its residents.

Over the past 10 years, Indonesia's personal travel and tourism spending has steadily grown, averaging 7.6 percent annual compounded growth between 1988 and 1994.

"Between 1994 and 1997, annual compounded growth of Indonesian travel and tourist personal consumption is expected to reach 7.2 percent and over the next decade (1997-2007) it is projected to grow even faster at 7.7 percent annualized compound growth."

"This 1997-2007 rate of growth is almost twice as fast as WTTC's estimates for the Asia-Pacific region and almost three times as fast as estimates for global growth."

The council also reported that in 1997, the country's travel and tourism capital investment is expected to total Rp 25.01 trillion. "Over the next decade (1997-2007), the amount is expected to grow (in real terms) by 142 percent to Rp 60.64 trillion (1997 constant rupiah)."

Travel and tourism capital investment is spending by individuals, companies and the public sector on travel and tourism infrastructure and equipment in Indonesia, including aircraft, rental cars, hotels, airport facilities, highways, and beaches.

WTTC said that travel and tourism represents 12.8 percent of total capital investment for 1997, and by 2007 the percentage is expected to increase to 13.6 percent.

Based on the council's report, travel and tourism-generated employment is expected to grow by 29.4 percent over the coming decade, creating 1.9 million new jobs across the economy. (icn)