The Indonesian government is planning to establish an Indonesia Tourism Fund (ITF) to support the promotion of tourism and nation branding via international activities, such as sports events, concerts, and business events.
Allotted and managed aside from the marketing budget of the Ministry of Tourism and Creative Economy (MoTCE), this fund is also meant to encourage tourism development in super priority tourist destinations, such as Lake Toba, Borobudur, Mandalika, Labuan Bajo, and Likupang.
In the initial stage, two trillion rupiah (US$128.6 million) will be disbursed by the Ministry of Finance (MOF). MoTCE will then need to propose the amount of annual funding, which will later be approved by the president.
Sandiaga Uno, minister of tourism and creative economy, said the fund would support bids for international major events targeting for launch in 2H2024.
“Events are the most effective strategy for promotion – (they increase) the number of quality tourist visits, and have a big impact on the economy,” said Sandiaga, citing the success of hosting international events such as the G20 Summit, the FIFA U-17 World Cup, and MotoGP Mandalika – the last of which had an estimated economic impact of over eight trillion rupiah.
He explained that the management of these funds would either be handed over to Indonesian Journey (Injourney), a state-owned company in the aviation and tourism industry, or another fund management institution established by the MOF.
“We are currently finalising the scheme, financing mechanism and (determining) the management institution. Currently the government is working on a legal basis, including waiting for the ratification of a presidential regulation regarding the fund,” said Sandiaga.
In response, Pauline Suharno, secretary general of the Indonesian Tourism Industry Association (GIPI), hopes that the tourism fund will be impactful to the industry.
However, Pauline said information about the fund has yet to flow to tourism industry players, as none of them have been “invited to discuss it”.
“If the government sees that tourism is important and generates foreign exchange, its should immediately have a dialogue with the industry and see interests from our perspective,” she remarked.
Ndang Mawardi, CEO of Inspiro Group, stressed the importance of clarity in the allotment, accountability and audit of the fund, and urged key performance indicators be set for events. This way, “the impact on society can be projected”.
Raty Ning, chairman of the ICCA Indonesia chapter, expects to see standards and criteria being set to qualify events for funding.
She pointed out that it is vital to choose large-scale events in order to “have the biggest multiplier effects”.
Ndang also hopes that the use of tourism funds will be more developmental in nature – such as for tourism innovation, service excellence and sustainability training and projects.