Indonesia, the world’s largest archipelago and home to over 17,000 islands, possesses a tourism potential that few countries can rival.
From Bali’s famed beaches to Yogyakarta’s temples, from the diving paradise of Raja Ampat to the cultural treasures of Toraja, the nation is blessed with diversity in nature and heritage.
Yet, despite this richness, Indonesia continues to lag behind its neighbors—Thailand, Malaysia, and Viet Nam—in attracting international visitors and building a robust tourism industry.
In 2024, according to VN Express International, Thailand welcomed over 35 million tourists, Malaysia around 25 million, and Viet Nam nearly 18 million and Singapore with 16.6 million.
Indonesia, by comparison, drew just almost 14 million visitors, falling short of pre-pandemic levels and far from the government’s ambitious targets.
Structural Challenges
One major reason for Indonesia’s underperformance lies in inconsistent policy execution and poor infrastructure.
Unlike Thailand, where tourism has long been treated as a national economic pillar with coordinated marketing and investment, Indonesia’s tourism strategy often shifts with political cycles.
Changes in leadership at the Ministry of Tourism and Creative Economy have led to fragmented planning, where long-term initiatives are frequently replaced before yielding results.
Infrastructure, too, remains a major bottleneck. While Bali offers world-class facilities, many of Indonesia’s other destinations suffer from limited air connectivity, inadequate roads, and unreliable public transportation.
Travelers who wish to visit lesser-known gems such as Flores, Wakatobi, or North Sulawesi often face high costs and complex routes. This logistical challenge discourages mass tourism and limits economic opportunities for local communities.
Smarter Competitors
While Indonesia has struggled with internal inefficiencies, its neighbors have stepped up their game.
Thailand has aggressively marketed its image as a “complete destination” — affordable, convenient, and welcoming — while simultaneously upgrading airports, railways, and tourism hubs.
Malaysia has capitalized on its proximity to Singapore and strong airline connectivity, positioning itself as both a family-friendly and medical tourism hub.
Viet Nam, meanwhile, has emerged as the region’s rising star, combining affordable luxury with visa-friendly policies and rapid investment in resort infrastructure.
These countries have not only diversified their tourism offerings but also built strong digital and global marketing presences.
Thailand’s Tourism Authority, for instance, runs multilingual campaigns and influencer collaborations that target specific demographics, from wellness travelers to digital nomads.
In contrast, Indonesia’s branding efforts remain heavily focused on Bali, with limited global visibility for other regions such as Sumatra, Sulawesi, or Kalimantan.
Visa Policies and Accessibility Barriers
Accessibility is another area where Indonesia has room to improve. While Thailand and Malaysia have simplified visa processes and introduced extended visa-free stays for dozens of nationalities, Indonesia’s visa policies have often shifted unpredictably.
Frequent changes to visa-on-arrival rules and electronic visa systems have created confusion among travelers and travel agents alike.
Moreover, the country’s limited international flight connections—especially outside Bali and Jakarta—pose a barrier to growth.
Viet Nam and Thailand have successfully attracted more direct international flights to their regional cities, spreading tourism income more evenly across their territories.
Indonesia’s domestic airlines, although expanding, still face high operational costs, making inter-island travel expensive for both locals and foreigners.
Sustainability and Missed Opportunity
Indonesia has repeatedly stated its intention to promote sustainable tourism, but progress has been uneven.
While regions such as Labuan Bajo and Lombok were designated as “super-priority destinations,” rapid construction and weak enforcement of environmental regulations have raised concerns about sustainability.
Many conservationists fear that Indonesia risks repeating Bali’s overdevelopment problems in new areas without proper planning.
In comparison, countries like Viet Nam and Malaysia have integrated eco-tourism initiatives more systematically, linking them with community-based projects that directly benefit locals.
Indonesia’s potential in this area is enormous—its biodiversity, marine ecosystems, and indigenous cultures are unique—but without cohesive governance and monitoring, the country risks losing its environmental and cultural edge.
What Indonesia Must Do Next, If It Wants to Compete
To catch up with its neighbors, Indonesia must take a holistic and long-term approach to tourism development. This means improving air and sea connectivity, investing in infrastructure beyond Bali, and creating consistent policies that transcend political changes.
Tourism education and workforce development should also be prioritized to raise service quality and competitiveness.
Equally important is diversifying Indonesia’s image abroad. The country must move beyond Bali and market its regional diversity more effectively.
Destinations like North Sumatra, West Papua, and Maluku have stories and landscapes that could appeal to international travelers—if properly promoted and made accessible.
Digital marketing, partnerships with international travel influencers, and better coordination between central and local governments will be key.
