Indonesia Provides Incentives to Boost Tourism amid Pandemic

JAKARTA, KOMPAS.com – Indonesia provides various incentives to improve the tourism industry as one of the sectors most affected by the Covid-19 pandemic, a senior minister said on Monday, September 27.

“The Covid-19 pandemic has strong negative impacts on the rate of hotel occupancy, the hotel revenue, the realty, including other tourism-related services,” said Coordinating Minister for Economic Affairs Airlangga Hartarto during the Tourism and Creative Economy National Coordinating Meeting (Rakornas).

Airlangga said that the government distributed its supports to the Indonesian tourism sector via a national economic recovery (PEN) program. This includes the implementation of strategies to rebuild the tourism industry such as CHSE (cleanliness, health, safety, and environment) measures, support for the making of Indonesian films, and hotel accommodation for health care workers.

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This year alone, he added, the government has allocated 7.67 trillion rupiahs ($537.5 million) to support the national tourism strategic areas, ecotourism, and human resources training in the tourism sector.

The government also introduced an incentive program for the tourism and creative economy. “There is an increase in the budget of the government incentive assistance to 60 billion rupiahs [$4.2 million] or a threefold increase in the assistance compare to 2020. It aims to fund the seven creative economy sub-sectors namely apps, game developers, handicrafts, fashion, culinary, film, and the tourism sector,” Airlangga said.

To reduce the impact of Covid-19 and to maintain the sustainability of the economy in the tourism sector, the government has provided grants of 3.7 trillion rupiahs ($260 million) from the PEN program.

The funds aim to alleviate the burden of the local administrations, hotels, and restaurants after experiencing a decline in revenues and financial hardships due to the Covid-19 pandemic.

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The grants have been transferred to the provincial governments and tourism operators in 101 regencies or cities, based on some criteria.