M

oney, or rather the lack of it, knows no borders.

Despite living in the wonderful Indonesian archipelago, with its thousands of stunning natural and cultural-based tourism spots, financial considerations mean housewife Vera Rusiana, 48, will not necessarily choose Lombok, for instance, over Hong Kong as a holiday destination.

She manages to go abroad three times a year, with a budget allocation of only around Rp 10 million (US$752) per year. The key for her is price, both for airline fares and accommodation, which often makes local tourist destinations far less competitive.

“If I count it up, airline fares for domestic destinations are pretty similar to international flights, sometimes they’re even more expensive than going abroad,” Vera told The Jakarta Post.

The return ticket for her upcoming trip to Hong Kong in June cost only Rp 1.7 million. She has also secured a nine-night Japan trip this year for Rp 3.2 million. She has never found such a competitive deal for domestic destinations.

Vera was among Indonesia’s 7 million outbound tourists last year, which, according to data from MasterCard’s report “Future of Outbound Travel in Asia Pacific”, was up by 6 percent. The figure is expected to increase to 10.6 million by 2021, making Indonesia the ninth-largest outbound market in the region.

Smailing Tours and Travel Service’s free independent traveler product team leader Marcellie Purwanto said people preferred to go abroad because of the cost of domestic trips. “With the exception of promotion tickets [for Bali], the price to go to Bali is similar to going to Singapore.”

The same applies for the company’s promotional three-day, two-night tour of Bangkok, which costs only around Rp 700,000, while a similar-length trip to Morotai, North Maluku, may cost Rp 3.7 million.

Tourism Minister Arief Yahya acknowledged the high cost of domestic tourism, partly the result of a lack of connectivity and infrastructure. However, he stressed that the figure for outbound tourism last year was still small compared to the inbound arrival of 11.5 million tourists.

With a population of 250 million, Indonesia offers a lucrative market for both inbound and outbound tourism. MasterCard predicts Indonesia’s outbound tourism will be driven by middle-income households, those earning between $10,000 and $30,000, by 2021. According to the Boston Consulting Group, Indonesia will have 141 million middle-income consumers by 2020.

Responding to the trend, the government has turned its focus toward digital outlets to attract millennials, known to have a high attachment to their electronic gadgets, to visit lesser known affordable local destinations, mainly on Java Island.

“We see how young people use social media to look for information [on tourism] and even make bookings. So digitalization is our priority,” Tourism Ministry deputy for domestic tourism marketing Esthy Reko Astuti said.

The government has allocated around Rp 100 billion for digital marketing of domestic tourism, aiming for 265 million domestic tourists within the country this year, excluding the 15 million foreign tourists. Esthy believes the move will be “very effective” given the fact that almost half of the population in the country own smartphones.

The government has also pushed for infrastructure development in 10 emerging tourist destinations including Lake Toba, North Sumatra, and Mandalika, West Nusa Tenggara.