Jl. Gatot Subroto No. 44Jakarta 12190, PO. Box 3186Indonesia.

p. +6221 5292 1334 f. +6221 5264 211www.bkpm.go.id e. :info@bkpm.go.id

Ÿ Around 10 % of IDR 4,012 trillion from the state budget is allocated to develop basic tourism infrastructure.

Ÿ Training programs in tourism and hospitality business are backed up by government support.

Ÿ Investments up to 100% foreign ownership for hotel management and operators are allowed, while forleisure ac�vi�es, foreign ownership is allowed up to 70%.

GOVERNMENT PROVISIONS AND SUPPORTS

Indonesian President, Joko Widodo, officially launched the Integrated One Stop Service Centre (PTSP) at Indonesia Investment Coordinating Board (BKPM) in early January 2015. This service aims to smoothen and simplify licensing procedures for investment projects. From nowon, investors will not need to visit various ministries or government agencies to obtain necessary permits but can simply turn to the BKPM's OSS centre. In addition, currently the BKPM has established what so called Marketing Officers (MO) who will take care any investment interest to explore investment opportunities in the country. The contact of MO is Directorate of Sector Promotion, BKPM (Phone: [62-21] 525-2008 Ext: 3568, Fax: [62-21] 5288-0390, Email: info@bkpm.go.id).

Local PartnerA host of organizations supporting Indonesia’s tourism sectors are growing in prominence, as are academic centres of excellence.

Indonesia Investment One Stop Service (OSS)Center and Marketing Officer

EcotourismIndonesia offers great options for ecotourism destinations as presented in the following map:

Advantages: Current and FutureŸ The corporate landscape

Indonesia already hosts dynamic clusters of foreign and domestic players including world-known hotel operators/management companies, franchise/retail brands and property developers that operate in the tourism industry.

Ÿ With an increasing number of skilled labour, Indonesia offers the nd2 most efficient operating costs in the ASEAN region.

How do labour costs in tourism compare?The chart below presents an analysis of the average total labour

3costs for a hotel employing 50 staff in Indonesia and four other emerging markets in SouthEast Asia.

Based on a hotel with a headcount of 50, comprising of: 11 waiters/waitresses, 6 cleaners, 6 porters, 5 receptionists, 4 cooks, 2 facilities specialists, 2 telephone operators, 2 gardeners, 2 security guards and 1 of each of the following: accountant, catering assistant, catering manager, chef, cook supervisor, hotel manager, hotel supervisor, housekeeper, security officer and IT support officer.

Indonesia has the 2nd lowest operating costs at US$ 263,357 per annum.Therefore , it is 18% lower than the study average of US$ 321,345 per annum.

INVESTMENT

TOURISM

SABANG

DANAU TOBA

KOTA TUA JAKARTA

PANGANDARANBOROBUDUR JAVA PROMO

TANJUNG PUTING

BROMO-TENGGER-SEMERU

BATUR BALI

RINJANI

DERAWAN

TORAJA

BUNAKEN

WAKATOBI

KOMODO-KELIMUTU-FLORES

RAJA AMPAT

Source: Dr. Sapta NirwanaVice Minister Ministry of Tourism Republic of Indonesia.

Ecotourism in Indonesia Presentation, 2014

Indonesia Tourism Industry BoardGabungan Industri Pariwisata Indonesia

www.bkpm.go.id

TOURISMINVESTMENT

hen it comes to an abundance of natural resources from Wthe world's largest and greenest archipelago that is rich in biodiversity and a home of mul�-cultural people, Indonesia would sum up as an ideal tourism getaway.

With strong government support, rising domes�c disposable income, and increasing number of hotels and airport developments, topped with expanding air transport networks, the Indonesian tourism industry offers great opportuni�es for investment.

WHY INDONESIA?Ÿ Indonesia is an emerging global powerhouse in Asia. With the GDP

expected to reach US$ 1 trillion in 2014, Indonesia is the largest economy in Southeast Asia. Much less affected by the global financial crisis compared to its neighboring countries, Indonesia's economy grew around 5.5% in 2013, making it “The World's Most Stable Economy in the Last Five Years” according to The Economist magazine.

Ÿ Having a healthy tourism industry, Indonesia welcomed 8.8 million foreign visitors arrivals in 2013.

Ÿ The growth of affordable air travel in the region provides significant incen�ves for consumers to travel intercity or interna�onally, for both business and leisure.

MARKET OPPORTUNITIESHotel Investment in The Last 5 Years Foreign Direct Investment of tourism sector in hotel & restaurant reached US$ 513,1 million in 2014, an increase of 10.94% compared to its previous year. Increase also occurred in the realiza�on of Domes�c Direct Investment where in 2014 its realiza�on was US$ 133.1 million, an increase of 23,46% compared to its previous year.

Indonesia tourism industry: The Push FactorAs one of the best tourism des�na�ons in the region, Indonesia offers:Ÿ Diverse op�ons for travelers;Ÿ Excellent natural resources;Ÿ Rich cultural experiences; Ÿ Best value for tourism

Growing middle income groupThis group has a�racted the expansion of low cost carrier capacity within Southeast Asia.

Opening more accesŸ With more than 17,000 islands in the

archipelago, the best way to connect to some of the exo�c tourism des�na�ons is by cruise tourism.

Ÿ Cruise tourism provides access to many remote and exo�c islands throughout the archipelago.

Ÿ The Ministry of Touris has commi�ed to establish 320 ports of call in 2014, and thus targe�ng a total of 500,000 passengers by the end of 2015. Therefore, 15 harbors as cruise ports are being developed throughout Indonesia.

Source: Ministry of Transport (2014), Sta�s�cs Indonesia (2014), HVS (2014)

Growth in interna�onal arrivals, by air transport1International tourists to Indonesia grew at 35.7% CAGR between

22008 and 2012 . Tourists from Asia Pacific and Europe accounted for 82% of international arrivals in 2013.

Hotel MarketBetween 2009 and 2013, the number of 5-star establishments in Indonesia grew at 9% CAGR, from 1,240 to 1,778 hotels respec�vely. The top 11 major provinces such as those in Java and Bali saw the most development of hotels in the past five years. Developments of hotels are also seen in the secondary provinces such as in Riau and Kalimantan.

Source: Sta�s�cs Indonesia, 2014

17,508island

1 2CAGR: Compound Average Annual Growth Rate; 2012: Estimated figure;Source: Statistics Indonesia, 2014

Asia Pacific and Europe

%

852013

MICE or Business TourismWithin ASEAN, Indonesia was fourth most popular business tourism des�na�on. In 2013, business tourism comprised just 3.2% of the total interna�onal tourists arriving in Indonesia. Nonetheless, the number of MICE tourists grew from 236,000 to 283,000 visitors - That is a jump of 26% from 2010 to 2013.

Source: ICCA (2013), Data from Ministry of Tourism 'Indonesia MICE Promo�onPresenta�on' (2013), & BPPI (2013)

Increasing number of foreign and domes�c touristsŸ Between 2009 and 2013, the number of foreign visitors has seen a

steady yet moderate increase at a CAGR of 18.12%, contribu�ng to the total foreign tourist expenditure of just over US$ 10 billion in 2013.

Ÿ While Ministry of Tourism expects to receive up to 9.5 million foreign visitors by the end of 2014, this rate essen�ally corresponds with the 9% growth in the 2012 - 2013 period.

Ÿ By the end of 2013, domes�c tourism accounted for as many as 250,000 trips at 6% “CAGR”. Subsequently, expenditures by domes�c tourists also increased, reaching US$ 16 billion.

Ÿ Such upward movement reflects the posi�ve effects of the domes�c economy.

12,537.27 13,673.64

14,626.36

15,713.64 16,029.09

220000

225000

230000

235000

240000

245000

250000

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

Number of domestic visitors (2009 –2013)Domestic visitors (thousand)

Total expenditure (USD million)

2009 2010 2011 2012 2013

Source: Sta�s�cs Indonesia, 2014

Source: Sta�s�cs Indonesia, 2014

7,347.60 6,297.99

7,603.45 8,554.39

9,120.89 10,054.15

0

2000000

4000000

6000000

8000000

10000000

0

2000

4000

6000

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10000

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Number of foreign visitors (2008 – 2013)Foreign visitors (thousand)

Total expenditure (USD million)

2008 2009 2010 2011 2012 2013