Who Benefits from Indonesia's Tourism?

Indonesia’s tourism sector continues to grow. According to the Tourism Satellite Account (TSA), the sector contributed 4.67% to the country’s Gross Domestic Product (GDP) in 2023, underscoring its vital role in national economic growth. The question remains: who truly benefits from this expansion?

To boost tourism, the government, through the Ministry of Tourism, has implemented strategic measures. These include developing thematic destinations and village tourism, strengthening sustainable tourism ecosystems, enhancing MICE (Meetings, Incentives, Conferences, Exhibitions) services, and introducing visa-free policies for 13 countries.

However, three of these priorities heavily rely on on-the-ground resources. Developing destinations, strengthening ecosystems, and organising events require capable actors to manage them effectively. Ultimately, the success of Indonesia’s tourism strategy hinges on the quality of its human resources.

In reality, many local workers remain in informal or low-wage roles and have not fully taken on strategic positions within the industry. If this persists, tourism growth risks creating inequality, where destinations flourish while local communities remain mere spectators. Therefore, human capital development should not be treated as an add-on but as a core strategy in tourism development.

Strengthening Skills as the Foundation

Tourism sector development must begin with upskilling the workforce. This can be achieved by equipping communities with relevant capabilities and specialised skills, as demonstrated by Diageo’s Learning for Life programme, supported by the Ministry of Tourism.

Since 2022, over 6,000 tourism workers in Indonesia and more than one million globally have participated in this training, with increased job opportunities reported.

Building Talent Pools with Educational Institutions

Beyond upskilling current workers, the next challenge is ensuring future talent availability. Therefore, industry collaboration with educational institutions is crucial. Partnerships like Agoda’s Digital Tourism Academy with Bandung Polytechnic of Tourism illustrate efforts to bridge academia and industry.

This approach aligns curricula and training with sector needs from the outset, ensuring graduates are not only job-ready but also equipped to navigate industry dynamics. Such collaboration is vital to prevent growth being hindered by talent shortages.

Positioning Communities as Key Actors

Upskilling tourism workers is also critical for supporting micro, small, and medium enterprises (UMKM). Strengthening UMKMs enables communities to transition from informal or low-wage roles to active participants in the tourism value chain.

This role can be further reinforced through sustainability-focused programmes that empower communities while ensuring long-term value creation. For instance, Agoda’s Sustainable Tourism Impact Fund empowers local communities to develop their businesses.

Support for UMKMs like Sejiva and Livingseas not only enhances operational and marketing aspects but also contributes to developing regenerative tourism hubs in Indonesia. This demonstrates that tourism growth can align with community empowerment, while also requiring environmental sustainability.

Without this, tourism growth risks undermining its own foundations. In Indonesia, where natural beauty is the primary attraction, initiatives like rainforest restoration and marine conservation are vital. Programs such as Agoda’s Eco Deals in partnership with WWF show how tourism growth can harmonise with environmental preservation.

Indonesia’s tourism sector is unlikely to slow down soon. Its potential is vast, and policy support continues to strengthen, alongside initiatives placing communities at the forefront, including those from US-based companies mentioned. However, who becomes the key player and who benefits from progress depends on today’s efforts.

The question is no longer whether tourism will grow, but who will lead and who will be left behind. Indonesia’s tourism direction is ultimately determined not by investment, infrastructure, or policy alone, but by a more fundamental choice: whether to place people and communities at the heart of growth, or merely as numbers in achievement reports.