The 4 th Seminar on Promoting Services Trade in ASEAN: Trade in Tourism Services

The 4 th Seminar on Promoting Services Trade in ASEAN: Trade in Tourism Services

TRADE SERVICES ININDONESIA General Information

Composition of Indonesia s Export of Services 100% Government goods and services n.i.e. 90% 80% Personal, cultural, and recreational services Other business services 70% 60% 50% 40% 30% 20% Telecommunications, computer, and information services Charges for the use of intellectual property n.i.e. Financial services Insurance and pension services Construction Travel Transport 10% Maintenance and repair services n.i.e. 3 0% 2011 2012 2013 2014 2015 Source: Trade Map Manufacturing services on physical inputs owned by others

Services Sector s Contribution in Indonesia GDP (2014) Agriculture, Hunting, Forestry and Fishing 14% Services* 51% Mining and Quarrying 10% Manufacturing 24% *Services including Construction Electricity, Gas and Water Supply - 1% 4 source : Statistics Indonesia

5 Directorateof Trade In Services Directorate General of International Trade Negotiation

PROMOTING SERVICES TRADE Trade Fair Trade Expo Indonesia Participating in international exhibition Branding through video Developing in Goods/Services Collaboration between designer and SME s Indonesia Improving potential and competitiveness on Indonesian services (franchise, spa & salon, chef and nurse) 6

TRADE IN TOURISM SERVICES

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9 OUTLINE A. Marketing Performance B. Digital Tourism C. Investment Opportunity

A. Marketing Performance 10

11 BREAKING NEWS Indonesia is in top-20 fastest growing travel destination in the world. (The Telegraph, 2017)

International Arrivals Growth Comparisons with Regional and Global Market In terms of growth, Indonesia s performance is 4 times higher compared to the regional and global growth. Indonesia, Growth: 25,68 % ASEAN, Growth: 6 % World, Growth: 6 % Indonesia 25,68 % (From January August 2017) Malaysia 0,87 % (From January May 2017) Singapore 3,83 % (From January July 2017) Thailand 5,05 % (From January August 2017) Source : Statistics of each countries 12

Foreign Exchange Earnings in Indonesia by Sectors 2013 2014 2015 2016 Value Value Commodity Value Commodity Value Commodity Commodity (million (million Type (million USD) Type (million USD) Type USD) USD) 1 Oil & Gas 32,633 Oil & Gas 30,318 Oil & Gas 18.574 CPO 15,965 No 2 Coal 22,759 Coal 18.697 CPO 16.427 Tourism*) 13.568 3 CPO 16,787 CPO 18.615 Coal 14.717 Oil & Gas 13,105 4 Tourism 10,054 Tourism 11,166 Tourism 12,225 Sumber : BPS dan Pusdatin Kemenpar, 2015 (estimasi) Coal 12,898 5 Rubber 6,706 Garment 7,450 Garment 6.410 Garment 6,229 6 Garment 6,216 Electricity 7,021 Electricity 4.510 Electricity 4,561 7 Electricity 5,104 Chemicals 6,486 Processed Rubber 3.564 Jewelry 4,119 8 Chemicals 4,124 Processed 6,259 Paper 3.546 Paper 4,032 Rubber 9 Paper 3,723 Paper 5,379 Jewelry 3.319 Chemicals 3,700 10 Textile 1,948 Jewelry 3,914 Chemical 3.174 Processed 3,242 Rubber 11 Processed 1,203 Textile 3,853 Textile 1.927 Textile 1,848 Wood 12 Jewelry 202 Processed 3,780 Processed Wood 1.352 Processed Wood 1,279 Wood 13

14 ACKNOWLEDGEMENT OF WONDERFUL INDONESIABRANDING During 2016, Wonderful Indonesia received 46 awards at various events in 22 countries.

15 ACKNOWLEDGEMENT OF WONDERFUL INDONESIABRANDING 15 September 2017 UNWTO Video Competition 2017 Chengdu, China 1. People s Choice Award 2. Winner East Asia and Pacific Region

16 ACKNOWLEDGEMENT OF WONDERFUL INDONESIABRANDING 28 September 2017 TTG Travel Awards 2017 Bangkok, Thailand Indonesia : Destination of the Year 2017

INDONESIA'S TTCI WEF PERFORMANCE GROW POSITIVELY 2008-2017 Related to Competitiveness Index, Indonesia is improving significantly. RANK SCORE Source : World Economic Forum (WEF), 2017 17

B. Digital Tourism 18

WHY TOURISM IS GROWING 19 Growth 25,68% GO DIGITAL! 3 T REVOLUTION Top-20 fastest growing tourism destination Highest forex earnings Create Job Opportunity Lifestyle : Personal, Mobile, Interactive 70% search and share are using digital Digital media effectiveness is 4x more than that of conventional media TELECOMMUNICATION TRANSPORTATION TOURISM

3T REVOLUTION 20 TELECOMUNICATION + DIGITAL COMMON PLATFORM SHARING ECONOMY Google, Facebook, Whatsapp TRANSPORTATION + DIGITAL COMMON PLATFORM SHARING ECONOMY Uber, LCC, Gojek TOURISM + DIGITAL COMMON PLATFORM SHARING ECONOMY Tripadvisor, Traveloka, Travelio *Digital Tourism Revolution is the Natural Revolution

CHALLENGES AHEAD 21 INCUMBENT RESISTANCE What s in it for me? COST OF DOING NOTHING!

DEVELOPMENT OF DIGITAL WORLD Social media January 2017: 7,4 Billion world s population 3,7 Billion internet users 2,7 Billion active social media users 8 Billion mobile users 2,5 Billion active social mobile users January 2017: 262 Million Indonesia s population 132 Million internet users 106 Million active social media users 371 Million mobile users 92 Million active social mobile users Source : We Are Social, Hootsuite 2017 22

TREND INDUSTRI 23

C. Investment Opportunity 24

25 BREAKING NEWS Ease of Doing Business in Indonesia has improved, due to government efforts to simplify regulations.

26 WONDERFUL INDONESIA IS A WORTH TO INVEST COUNTRY Indonesia investment grade is reaffirmed by all major agencies. No. Company 2016 Ratings Investment Value 2017 Ratings Investment Value 1 Standard and Poor s BB+ Negative BBB- Positive 2 Moody s Investor Service Baa3 Positive Baa3 Positive 3 Fitch BBB- Stable BBB- Positive

TOURISM INVESTMENT REALIZATION *) year 2017 (January September) Tourism Investment Realization Growth Growth 2013-2014 2014-2015 2015 2016 53% PMA 10.66% 43.11% 62.86% PMDN 23.47% 82.93% -49.48% of Target in 2017 Total 13.64% 53.17% 28.96% Source: Indonesia Investment Coordinating Board (BKPM), 2017 27

TOURISM INVESTMENT REALIZATION IN SEMESTER-I 2017 Foreign Direct Investment (FDI) 1,094.65 USD Million FDI Realization Q-III (Jan-Sept) 2017 Top-3 Foreign Direct Investment (FDI) Based on Business Type Based on Destination (Province) Based on Origin Countries 37,66% Star Hotel 28,38% Other Short/Non-hotel Accomodation 9% Non Star Hotel 38,06% Bali 18,03% Riau Islands 17,71% Jakarta 35,21% Singapore 29,12% China 5,53% Jepang Source: Indonesia Investment Coordinating Board (BKPM), 2017 28

TOURISM INVESTMENT REALIZATION IN SEMESTER-I 2017 Domestic Direct Investment (DDI) 301.75 USD Million DDI Realization Q-III (Jan-Sept) 2017 Top-3 Domestic Direct Investment (DDI) Based on Business Type 76,72% Star Hotel 12,68% Theme Park 4,52% Entertainment & Recreation Activities Based on Destination (Province) 26% West Java 15,27% Central Java 13,07% East Java Source: Indonesia Investment Coordinating Board (BKPM), 2017 29

TOURISM INVESTMENT NEEDS IN INDONESIA 30 By 2019 we have the target to add tourism facilities as follows : 120,000 Hotel Rooms 100 International Recreational Parks 100 Marinas 15,000 Restaurants 100 Diving Operators

CREATING 10 NEW BALI Currently we are developing Top-10 tourism priority destinations called 10 New Bali. Lake Toba, North Sumatera Tanjung Kelayang, Belitung Tanjung Lesung, Banten Kepulauan Seribu, Jakarta Borobudur, Central Java Bromo Tengger Semeru, East Java Mandalika, West Nusa Tenggara Labuan Bajo, East Nusa Tenggara Wakatobi, South East Sulawesi Morotai, North Maluku 31

INVESTMENT PROFILE OF TOP 10 PRIORITY TOURISM DESTINATIONS Total Investment needed is USD 20 Billion (USD 10 Billion Public Infrastructures Investment and USD 10 Billion Private Investment) PROJECTION 2019 NO DESTINATION INVESTMENT (USD MILLION) INTERNAT L TOURIST ARRIVAL (PEOPLE) FOREIGN EXCHANGE (USD MILLION) 1 Lake Toba 1,600 1,000,000 1,000 2 Tanjung Kelayang 1,400 500,000 500 3 Tanjung Lesung 4,000 1,000,000 1,000 4 Kepulauan Seribu & Kota Tua Jakarta 1,500 1,000,000 1,000 5 Borobudur 1,500 2,000,000 2,000 6 Bromo-Tengger-Semeru 1,400 1,000,000 1,000 7 Mandalika 3,000 2,000,000 2,000 8 Labuan Bajo 1,200 500,000 500 9 Wakatobi 1,500 500,000 500 10 Morotai 2,900 500,000 500 TOTAL USD 20,000 10 Million USD 10 Billion 32

33 DEREGULATION IN INDONESIA In order to attract tourists and investors, Indonesia Deregulations efforts focused on two things : 1. Ease of Entering Indonesia. 2. Ease of Doing Business (FDI).

1. EASE OF ENTERING INDONESIA There are 3 deregulations regarding the ease of entering Indonesia : 1. Visa Free Presidential Regulation No 21/2016 regarding Visa Free from 15 countries in 2013 to 169 countries in 2016 2. Simplifying Yacht Arrivals Waiving Clearance Approval for Indonesia Territory (CAIT) Policy entry permit from 3 weeks to 3 hours. 3. Abolition of Cruise Cabotage Principle To allow passengers of foreign cruise ships embark and disembark in 5 Indonesia s main ports. 34

35 2. EASE OF DOING BUSINESS (FDI) As a result of deregulations on Ease of Doing Business, more than 90% of tourism businesses are open for FDI (52 out of 57). 36 Tourism business are open 100% for FDI (Foreign Direct Investment) 16 Tourism business are open under specific conditions (49%-67%) 4 Tourism business are purposed for micro, small, and medium enterprises : Homestay Tourism Travel Agents Tour Guides Art Studios 1 Business closed for any investment on gambling business : casino

3 REASONS TO INVEST IN INDONESIA S TOURISM SECTOR A B C A B C A HIGH PURCHASING POWER World s 4 th Largest Population and demographic bonus (more than 65% of population at productive age until 2050). Economic Growth Potential (above 5%), driven by strong consumer confidence and spending (above 50% of GDP). Endless explorable possibilities in investment opportunities in Indonesia. Open for tourism investment HIGH INVESTMENT INCENTIVE Supportive political will through Special Economic Zone (SEZ) policy. Various tourism investment incentives for large-scale tourism projects HIGH INVESTMENT GRADE Good Support for business (rank Baa3 on Moody s; BBB- on Fitch and BBB- on S&P) B Medium class global tourism competitiveness (rank 42 out of 137 on WEF TTCI 2017) C Massive infrastructure development which includes tourism areas 36

THANK YOU 37