Tourism in Indonesia is an important component of the Indonesian economy as well as a significant source of foreign exchange revenues. With a vast archipelago of more than 17,000 islands, the second longest shoreline in the world, 300 different ethnic groups and 250 distinct languages, and tropical climate throughout the year, nature and culture are two major components of Indonesian tourism.
Tourism in Indonesia is currently overseen by the Ministry of Culture and Tourism. International tourist campaigns have been focusing largely on tropical destination with white sand beaches and blue sky imagery. Beach resorts and hotels were developed in some Indonesia islands, with Bali island as the primary destination. Cultural tourism is also an important part of Indonesia tourism industry. Toraja, Prambanan and Borobudur temples, Yogyakarta and Minangkabau are popular destinations for cultural tourism, apart from many Hindu festivities in Bali. About 5 million foreign tourists have visited Indonesia annually since 2000.
However, tourism development had sometimes clashed with local people, that has created criticism over Indonesia's tourism industry. Most of the disputes were related over land possession, local traditions (adat) and the impact of tourism development to the local people. In another area, tourism industry in Indonesia faces major threats. Since 2002, several warnings have been issued by some countries over terrorist threats and ethnic/religious conflicts in some areas, which significantly reduces the number of foreign visitors.
As with most countries, domestic tourists are by far the largest market segment. The biggest movement of domestic tourists is during the annual Eid ul-Fitr, locally known as "lebaran". During this period, which is a 2 week holiday after the month of Ramadan fasting, many city-dwelling Muslim Indonesians visit relatives in their home towns. Intercity traffic is at its peak and often an additional surcharge is applied during this time.
Over the 5 years up to 2006, attention has been focused on generating more domestic tourism. Competition amongst budget airlines has increased the number of domestic air travellers throughout the country. Recently, the Ministry of Labour legislated to create long weekends by combining public holidays that fall close to weekends, except in the case of important religious holidays. During these long weekends, most hotels in popular destinations are fully booked.
Since 2000, there have been, on average, 5 million foreign tourists each year, who spend an average of US$ 100 per day (see table). With an average visit duration of 9-12 days, Indonesia gains US$ 4.6 billion of foreign exchange income annually. This makes tourism Indonesia's third most important non-oil/gas source of foreign revenue, after timber and textile products.
Three quarters of Indonesia's visitors come from the Asia Pacific region, with Singapore, Malaysia, Australia, Japan and South Korea among the top five markets. The United Kingdom, France, Germany and the Netherlands are the largest sources of European visitors. Although Dutch visitors are at least in part keen to explore the historical relationships, many European visitors are seeking the tropical weather at the beaches in Bali.
