Fuel price hikes in Indonesia are affecting the tourism sector following rising inflation

Higher costs are expected to hit Indonesia’s tourism sector after the government raised the price of subsidized fuel by about 30 percent earlier this month.

The tourism operators of the archipelago are now racking their brains under these circumstances.

I Gede Nyoman Sangka, who has run his own travel agency on the resort island of Bali for more than five years, is currently working to improve the operational efficiency of his business.

“Like every business out there, we are also put in difficult situations after the increased fuel prices,” he told Xinhua news agency.

The rise in fuel prices came shortly after rising inflation.

Inflation in Indonesia at the end of August came in at 4.6 percent year-on-year, slightly lower than the previous month’s 4.9 percent, and both figures exceeded the central bank’s target range of about 2 to 4 percent.

In a meeting with provincial government leaders this week, President Joko Widodo asked them to allocate 2 percent of their budget to control transport costs and curb inflation, especially for micro, small and medium enterprises and informal workers.

Bali, one of the most famous tourist destinations in the world, is still striving to revive its tourism sector, which has been affected by the Covid-19 pandemic for the past more than two years.

The government has expressed its optimism about reaching an overall target of 3.6 million foreign visitor arrivals this year, although the Southeast Asian country is still grappling with other problems, such as an outbreak of foot-and-mouth disease in animals and the threat of monkeypox to public health.

Sangka expressed hope that the authorities will develop a special policy to help promote tourism in Bali.

“Flight tickets to Bali should be subsidized. Cheaper tickets will bring more visitors and increase hotel occupancy. This is important,” he said, adding that authorities should temporarily suspend hotel and restaurant taxes.

Meanwhile, the Ministry of Tourism and Creative Economy said it is preparing strategies to manage the significant impact of rising fuel prices on the tourism and creative economy sectors.

Earlier this week, Tourism and Creative Economy Minister Sandiaga Uno said his ministry will provide technical guidance and assistance, especially for small and medium-sized tourism businesses, to manage operating costs in more efficient ways.

It will also manage special interest tourism activities that have the potential to directly or indirectly reduce fuel consumption and encourage businesses in the tourism and creative economy sectors to start switching to renewable energy.

According to the minister, the number of middle-income and upper-class visitors to Indonesia’s tourist destinations is currently increasing.

“Tourism has become a basic need. It is for treatment. Sometimes a need for refreshment is necessary,” said Uno.



(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is automatically generated by a syndicated feed.)

Dear Reader,

Business Standard has always endeavored to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering has only made our determination and commitment to these ideals stronger. Even during these difficult times resulting from Covid-19, we remain committed to keeping you informed and updated with credible news, authoritative opinion and sharp commentary on topical issues of importance.
However, we have one request.

As we struggle with the economic impact of the pandemic, we need your support even more so we can continue to bring you more quality content. Our subscription model has seen an encouraging response from many of you who have subscribed to our online content. More subscriptions to our online content can only help us achieve our goals of bringing you even better and more relevant content. We believe in free, honest and credible journalism. Your support through more subscriptions can help us practice the journalism we are dedicated to.

Support quality journalism and subscribe to Business Standard.

Digital editor

Leave a Comment

Your email address will not be published.