Potential Foreign Exchange Losses from Indonesia's Tourism Industry Due to Middle East Conflict Reach Rp184.8 Billion per Day

The government has emphasised that Indonesia will promptly undertake reforms in the tourism sector to mitigate the effects of the global crisis, particularly due to the conflict in the Middle East. Coordinating Minister for the Economy Airlangga Hartarto revealed that the tourism sector is currently under pressure from disrupted global connectivity as a result of the conflict. “Indonesia needs to carry out reforms immediately to mitigate losses from the global crisis, as well as to build a competitive, resilient, and highly competitive tourism foundation and destinations on the international stage,” Airlangga stated in his remarks in Jakarta on Wednesday, 18 March 2026. The Ministry of Tourism projects a potential loss of around 5,500 foreign tourists and foreign exchange losses reaching Rp184.8 billion per day if the impacts of this turmoil are not mitigated promptly. Meanwhile, the InJourney Airports report for the period from late February to 10 March 2026 recorded disruptions on nine international routes at Soekarno-Hatta Airport and Ngurah Rai Airport. These disruptions have affected the mobilisation of 47,012 passengers. The challenges are further exacerbated by rising aviation fuel prices. Airlangga stressed that the tourism sector remains crucial to focus on, given its significant contribution to the national economy. In 2025, this sector contributed Rp945.7 trillion, equivalent to 3.97% of gross domestic product (GDP). Additionally, the number of foreign tourist visits reached 15.39 million people, growing 10.7% year-on-year (yoy). In terms of foreign exchange, the sector generated US$18.91 billion and supported 25.91 million workers. On that occasion, the Coordinating Minister also outlined several strategic steps that the government can take to keep Indonesian tourism competitive. One of them is the expansion of the Visa-Free Visit (BVK) policy. Based on a study by the World Travel and Tourism Council, the BVK policy for 169 countries since 2015 has driven tourist growth of up to 15% per year and created around 400,000 new jobs in the tourism sector. Currently, the Ministry of Tourism has identified 20 potential countries as targets for expansion. In addition, the government needs to strengthen the domestic market by leveraging the Eid al-Fitr holiday momentum as the main support. This strategy can be implemented through the concept of micro-tourism, namely the development of destinations within a land travel radius with deeper tourism experiences.