Indonesia, the world’s largest archipelago with over 17,000 islands, has tourism potential that few countries can match.
From the famous beaches of Bali to the temples of Yogyakarta, from the diving paradise Raja Ampat to the cultural treasures of Toraja, the nation is blessed with a diversity of natural and cultural heritage.
Yet despite this wealth, Indonesia still lags behind its neighbors Thailand, Malaysia and Vietnam in attracting international visitors and constructing a vibrant tourism industry.
According to VN Express International, in 2024 Thailand welcomed over 35 million tourists, Malaysia around 25 million, Vietnam almost 18 million and Singapore 16.6 million.
By comparison, Indonesia only attracted almost 14 million visitors, which is below pre-pandemic levels and much wanting the federal government’s ambitious goals.
Structural challenges
One of the foremost reasons for Indonesia’s poor performance is inconsistent policy implementation and poor infrastructure.
Unlike Thailand, where tourism has long been considered a pillar of the national economy with coordinated marketing and investment, Indonesia’s tourism strategy often changes with political cycles.
Changes in leadership on the Ministry of Tourism and the Creative Economy have led to piecemeal planning, with long-term initiatives often being replaced before they deliver results.
Infrastructure also stays a significant bottleneck. While Bali offers world-class amenities, many other destinations in Indonesia suffer from limited air connections, inadequate roads and unreliable public transport.
Travelers who need to visit lesser-known gems similar to Flores, Wakatobi or North Sulawesi often must take care of high costs and sophisticated routes. This logistical challenge discourages mass tourism and limits the economic opportunities of local communities.
Smarter competitors
While Indonesia struggled with internal inefficiencies, its neighbors stepped up.
Thailand is aggressively promoting its image as a “complete travel destination” – inexpensive, convenient and friendly – while modernizing airports, railways and tourism hubs.
Malaysia has leveraged its proximity to Singapore and good air connections to position itself as a middle for family-friendly and medical tourism.
Meanwhile, Vietnam has turn into a rising star within the region, combining inexpensive luxury with visa-friendly policies and rapid investment in resort infrastructure.
These countries haven’t only diversified their tourism offerings, but additionally built a powerful digital and global marketing presence.
For example, the Tourism Authority of Thailand runs multilingual campaigns and works with influencers to focus on specific demographic groups, from wellness travelers to digital nomads.
Meanwhile, Indonesia’s branding efforts remain largely focused on Bali, with limited global visibility for other regions similar to Sumatra, Sulawesi and Kalimantan.
Visa policy and accessibility barriers
Accessibility is one other area where Indonesia has room for improvement. While Thailand and Malaysia have simplified visa procedures and introduced prolonged visa-free periods for dozens of nationalities, Indonesia’s visa policy has often modified in unpredictable ways.
Frequent changes to visa-on-arrival rules and e-visa systems are causing confusion for each travelers and travel agencies.
Moreover, the country’s limited international air connections – particularly outside Bali and Jakarta – pose a barrier to growth.
Vietnam and Thailand have successfully attracted more direct international flights to their regional cities, spreading tourism revenues evenly across their territories.
Indonesia’s domestic airline, while growing, still struggles with high operating costs, making inter-island travel expensive for locals and foreigners alike.
Sustainability and a missed opportunity
Indonesia has repeatedly stated its intention to advertise sustainable tourism, but progress has been uneven.
Although regions similar to Labuan Bajo and Lombok were identified as “highest priority destinations”, rapid construction and weak enforcement of environmental regulations have raised concerns about sustainability.
Many environmentalists fear that without proper planning, Indonesia risks repeating Bali’s problems of overdevelopment in latest areas.
In comparison, countries similar to Vietnam and Malaysia are more systematically integrating ecotourism initiatives, combining them with community-based projects that directly profit residents.
Indonesia’s potential on this area is big – its biodiversity, marine ecosystems and indigenous cultures are exceptional – but without consistent management and monitoring, the country risks losing its environmental and cultural benefits.
What Indonesia must do next if it desires to compete
To meet up with its neighbors, Indonesia must adopt a holistic and long-term approach to tourism development. This means improving air and sea connections, investing in infrastructure beyond Bali and creating coherent policies that transcend political changes.
Tourism education and workforce development must even be prioritized to enhance service quality and competitiveness.
Diversifying Indonesia’s image abroad is equally vital. The country must look beyond Bali and promote its regional diversity more effectively.
Places like North Sumatra, West Papua and the Maluku Islands have stories and landscapes that would appeal to international travelers – if promoted and shared properly.
Digital marketing, partnerships with international tourism influencers and higher coordination between central and native governments will probably be key.
