The number of tourists visiting Indonesia has also increased gradually, although it is still far from the 2019 level. However, the recovery of tourist visits is also in line with the recovery of several neighboring countries, such as Thailand, Singapore and Malaysia, which in 2022 recorded between 25 and 30 percent from pre-pandemic level.

There are several positive factors that will drive tourism recovery in the future.

First, the government revoked the public activity restriction (PPKM) on Dec. 30, which brings fresh air to the Indonesian tourism industry. The repeal of PPKM will allow the community to travel without limiting the capacity in gathering. The recovery in the number of domestic tourists, which is faster than the recovery for foreign tourists, is also encouraging the domestic tourism industry to further recover.

Meanwhile, air-transport mobility improved at the peak of the 2022/2023 Christmas and New Year holidays. Data from the Transportation Ministry show that the movement of domestic airplanes and passengers departing on H-7 to D+10 for the 2022/2023 Christmas and New Year holidays increased when compared to the same period in 2021/2022.

Domestic aircraft movements were recorded at 28,778, an increase of 23.77 percent compared to the previous period, while domestic passenger movements amounted to 3.2 million passengers, or grew 39.06 percent compared to the previous period.

Second, the border opening for arrivals of tourists from China, who can accelerate the number of tourists arriving in Indonesia. The Tourism and Creative Economy Ministry sets a target of between 120,700 and 255,300 of Chinese tourists arriving in Indonesia in 2023. As one of the largest market countries for tourism in Indonesia, the return of Chinese tourists can support the total target in 2023 of having foreign tourists of between 3.5 million to 7.4 million.

Third, the support for airlines to increase the number of aircraft they operate will also accommodate higher passenger demand. Some airlines have increased their projection of aircraft numbers in their fleets in 2023. The three major airlines of Garuda Indonesia Group, Lion Air Group and Air Asia Group are expected to meet the demand for the number of passengers in 2023 with more aircraft in their fleets.

The infographic shows the number of flights based on data recorded by Flightradar24 taken online daily every Monday for departures from Soekarno-Hatta International Airport. The number of Garuda Indonesia Group and Lion Air Group flights shows that these two airlines have the largest market share for flights from Jakarta.

In 2023, Garuda aims to operate a total fleet of 124 aircraft, including its low-cost carrier Citilink, with 66 aircraft flown by Garuda and 58 by Citilink. Previously, Garuda, as of September 2022, only operated 81 aircraft, consisting of Garuda’s 40 aircraft and Citilink’s 39 aircraft.

Similarly, Lion Air will also have an additional 80 aircraft in 2023 as compared to its 287 operating aircraft as of December 2022. As for Air Asia, it will fly 32 aircraft in 2023, doubling its fleet of only 16 aircraft in 2022.

Together, an increase in the aircraft number and a decline in aviation fuel prices will reduce the cost of airplane tickets. Increasing the number of aircraft will also reduce airline competition. Lower airfare prices will significantly affect people's purchasing power to travel. Accordingly, we could expect more people traveling and hence the number of travelers to increase.

Apart from the positive factors, there are also risk factors that we may face in 2023.

The first is the expected global recession, which will reduce the people's purchasing power. Communities will reduce their spending, especially those related to leisure activities. People will save more money or spend selectively, prioritizing basic needs first. This decrease in purchasing power is likely to occur in the middle- to lower-income groups of people.

Second, the price of plane tickets is still high. Relatively higher airfare prices in 2022 have reduced the people's appetite in traveling. Airfare prices were high due to the limited number of available aircraft to meet passenger demand and the increase in world crude oil prices, which raised the prices of aviation fuel.

In short, airlines and the government should work together to push tourism forward. New, engaging and creative tourism promotions at the right moment and closely studying market conditions will increase the public’s interest in travel. Marketing programs must also be balanced with the provision of cheaper tickets and lower airport fees so as not to burden the passenger with high ticket prices, therefore attracting more tourists to come visit Indonesia.

*****

The writer is an analyst at Bank Mandiri.

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