A Future Blueprint for Tourism in Bali

President Prabowo’s comments were used to support his “commitment to build a North Bali International Airport.” A second Bali airport has been discussed since 2015, but without full governmental support. Until now. Prabowo believes that greenlighting a second airport to supplement Ngurah Rai International Airport in Denpasar would unlock investment in the north of the island and stimulate broader expansion of tourism, which is heavily focused on the southern enclaves of Kuta, Canggu, Seminyak, Jimbaran, Nusa Dua and Sanur.

Ngurah Rai International Airport in Denpasar. Image: Wikimedia Commons

If you look at Bali’s mushroom cloud-shaped landmass on a map, those destinations account for a tiny proportion of its landscape. Hence, rising concerns about the over-concentration of tourism in Indonesia’s most popular destination. By attracting investors in tourism-adjacent sectors, such as entertainment, festivals, music, fashion, retail, F&B, wellbeing, car rental plus hotels and resorts, the President hopes to diversify Bali’s lifestyle economy.

Changing the Tone of the Bali Debate

President Prabowo's policy stance aligns with the infrastructure-driven growth strategies of nations across South East Asia. From Singapore to Saigon, and Manila to Phnom Penh, investment in new airports, terminal upgrades and high-speed rail systems is predicated on stimulating long-term economic growth, investment and job creation.

"I am optimistic that the development of the tourism sector can continue and further encourage the contribution of the tourism sector to the growth of the national GDP," Rizki Handayani Mustafa, Ministry of Tourism Deputy for Industry and Investment, told Indonesia’s Antara News Agency in February.

Presidential support for a second Bali airport, and for the expansion and diversification of its tourism and lifestyle sectors, changes the debate about the future of Bali’s visitor economy. Since reopening after the Covid interregnum, Bali’s Governor Wayan Koster has made frequent statements about the need to control, or even cap, visitor numbers and alleviate the negative impacts of high-volume tourism on local communities, traffic and the environment.

Bali's attraction for tourists does come with negative impacts. Photo by mtsjrdl on Unsplash

In September 2024, Governor Koster announced a moratorium on hotel and resort construction in parts of the south to protect agricultural land from development. This was quickly walked back. In January, he rescinded the moratorium. With a major injection of new investment required from within Indonesia and internationally to support the President’s long-term objectives, the moratorium became an unwanted commercial brake.

The 2045 Golden Indonesia Vision

Whenever assessing Indonesia’s economic development policies, it’s worth keeping in mind two vital drivers. Firstly, the overarching national goal to become the world’s fourth-largest economy by 2045. This is important for investors to consider, as Indonesia intends to attract more funding across high-potential growth sectors, like tourism, infrastructure, AI, high-tech manufacturing and clean energy. Meanwhile, in the short term, President Prabowo – who was sworn in last October – will advocate policies aimed at securing a second term in 2029.

When it comes to tourism, Indonesia is a curious case. A vast archipelago of more than 17,500 islands, it is – by some distance – the largest economy in South East Asia. The World Bank forecasts it will be the only nation in Asia Pacific to experience positive economic growth in both 2024 and 2025 at or above the pre-pandemic rate.

Indonesian president Prabowo Subianto. Image: Wikimedia Commons

Yet, for a nation of its size, resources and geographical and cultural diversity, Indonesia under-performs for tourism. In 2019, it attracted 16.1 million arrivals, ranking fifth in ASEAN (behind Thailand, Malaysia, Singapore and Vietnam). Around 40% of those visitors flew direct to Bali. In 2024, Indonesia attracted 13.74 million visitors, well below its target of 17 million, of which 6.3 million headed to Bali - where the three top overseas visitor markets were Australia (1.53 million), India (0.55 million) and China (0.45 million).

But, Indonesia’s biggest market isn’t inbound, it’s domestic. Driven by the world’s fourth-largest population, of around 282 million, domestic tourist trips reached 1 billion in 2024, “an increase of 22% compared to 2023,” according to the Minister of Tourism. While Bali attracted 6.3 million foreign visitors in 2024, more than 10.1 million vacationers arrived from across Indonesia.

Bali’s potential to expand upon its total of 16.4 million visitors in 2024 is placed into context by the island of Phuket in Thailand, to which is often compared as a destination. Phuket attracted around 13 million tourists in 2024 with a land mass almost 10 times smaller than Bali’s 5,780 square km. Much of the projected future growth in tourism to Bali would come from the fast-growing cities across Indonesia.

Bali is often compared to Phuket (pictured), which attracted roughly three million fewer tourists in 2024. Image: Mike Swigunski/Unsplash

Under the previous government of Joko Widodo, Indonesia stated a target of raising 60-70% of national tourism revenue from domestic travellers. It established 5 “Super Priority Destinations” - Yogjakarta/Borobudur, Lake Toba, Mandalika, Likupang, Labuan Bajo/Flores to encourage domestic travellers to explore this vast nation beyond Bali. Yet Bali is likely to remain the preferred destination for affluent Indonesian urbanites.

What Happens Next?

New Tourism Minister, Widiyanti Putri Wardhana, has outlined a commitment to growing Indonesia’s overall tourism sector, which is forecast to contribute around 4.6% of national GDP and employ nearly 26 million people in 2025. However, a fairly tepid target range of 14.6-16 million international visitors in 2025 highlights the gap in regional flight connectivity that a second Bali airport would be expected to bolster.

At present, the government has not confirmed the location of Bali’s second airport, but a decision is expected soon to maximise the window of opportunity.

During a recent inspection visit of Bali’s Ngurah Rai airport, State-Owned Enterprises Minister Erick Thohir, stated that a second airport should begin construction “by 2027.” Bali’s current airport is Indonesia’s second-busiest, after Jakarta’s Soekarno-Hatta International Airport, and is expected to reach over-capacity by 2030.

“If we begin thinking to start construction [of a second airport] in 2029, it would be too late," added Mr Thohir.

Banner image: Photo by Guillaume Marques on Unsplash

Asia Media Centre