Indonesia is preparing for one of its largest domestic travel waves of the year as authorities forecast a massive surge in holiday mobility during the Christmas and New Year season of 2025–2026. The peak is expected on December 24, when more than 17 million trips are projected across the country in a single day.

Record-breaking holiday mobility

According to projections presented by Transport Minister Dudy Purwagandhi, approximately 17.18 million journeys are expected at the height of the outbound travel period. An even larger return flow is forecast for January 2, 2026, when up to 20.81 million travelers are expected to head back to major cities. The scale of movement reflects the convergence of public holidays, school vacations and the long-standing mudik tradition of returning home.

Domestic tourism remains resilient

The anticipated surge highlights the strength of Indonesia’s domestic tourism market despite inflationary pressures and global uncertainty. Popular destinations such as Bali, Yogyakarta and Lombok are expected to absorb the largest share of travelers, reinforcing their role as key engines of regional tourism and service-sector growth.

Indonesia strengthens its tourism rebound: 2025 recovery shows resilience and ambitious long-term growth

Heavy reliance on private vehicles

Authorities expect a significant proportion of travelers to rely on private cars, placing intense pressure on road infrastructure. Nearly half of all trips during the peak period are projected to be made by personal vehicles, with around three million cars expected to leave the Greater Jakarta area via toll roads alone. This trend underscores both improved access to transport infrastructure and the growing challenge of traffic management.

Centralized command amid weather risks

To manage the unprecedented movement of people, the Ministry of Transport has activated an integrated command center operating from December 18, 2025, through January 5, 2026. The center will coordinate real-time monitoring across land, air, sea and rail transport. Seasonal weather risks add another layer of complexity, prompting close coordination with Indonesia’s meteorological agency to prepare for flooding and landslides during the rainy season.

Tourism in Indonesia 2025: Trends and Risks

Infrastructure and safety readiness

Transport authorities have reinforced operational readiness across highways, airports, ports and rail networks. Measures include flexible traffic management, extended airport operating hours, additional maritime capacity and enhanced safety inspections. Thousands of vehicles, aircraft, vessels and rail assets have undergone checks to ensure compliance during the peak travel window.

Price stability and travel incentives

To ease the financial burden of peak-season travel, the government is rolling out fare discounts and incentives across public transport services. These initiatives aim to curb holiday price spikes, particularly for economy-class airfares, while encouraging more balanced distribution of passenger flows throughout the transport network.

As International Investment experts report, Indonesia’s year-end travel surge underscores the resilience of domestic demand and the strategic importance of internal tourism. If managed effectively, the peak season could deliver broad economic benefits while serving as a critical stress test for the country’s transport infrastructure and policy coordination.

Indonesia’s tourism sector is moving confidently toward a full revival, recording solid gains throughout 2025 and building momentum for a potentially record-breaking year. In August 2025, the country welcomed 1.51 million international visitors — a 12.33% increase compared with the same month in 2024. From January to September, arrivals reached 11.43 million, marking a 10.22% year-on-year rise. These figures confirm Indonesia’s resilience and its growing appeal in a competitive global tourism landscape.

Visa reforms and targeted marketing fuel expansion

A simplified visa regime has become one of the strongest drivers of Indonesia’s tourism recovery. The government expanded access to e-visas, improved entry procedures and increased the number of countries eligible for visa-free travel. These changes significantly eased travel for millions of potential visitors.

Marketing efforts have also intensified. Campaigns promoting Bali and other iconic destinations have elevated Indonesia’s visibility among international travelers. The government’s strategy now includes promoting emerging destinations beyond Bali, such as Lombok, Labuan Bajo and the cultural heartlands of Java, offering a broader and more diversified tourism experience.

Improved air connectivity enhances accessibility

Expanded flight schedules and new international routes have strengthened Indonesia’s connectivity with major global markets. Airlines have increased frequencies to Australia, South Korea, China, Japan and the Middle East, making the country more accessible and improving the competitiveness of its tourism sector.

Infrastructure upgrades — including airport renovations, expanded hotel capacity and improved transport networks — contribute to a smoother and higher-quality experience for travelers as they explore Indonesia’s varied destinations.

Tourism in Indonesia 2025: Trends and Risks

Ambitious goals: up to 16 million visitors expected in 2025

Indonesia aims to attract between 14.6 million and 16 million international visitors by the end of 2025. Given current growth rates, this target is within reach. The average spending per tourist has risen from USD 1199 in 2024 to USD 1297 in the third quarter of 2025, highlighting not only increasing demand but also higher-quality travel experiences.

This rise in per-visitor spending indicates that Indonesia is shifting toward a more value-driven tourism model, focusing on longer stays, premium offerings and diversified travel activities.

Market diversification becomes a strategic priority

Beyond Southeast Asia, Indonesia is expanding its promotional efforts to attract travelers from Europe, the Middle East, North America and South Asia. This broadening of target markets strengthens the industry’s resilience and reduces dependency on any single region — an essential strategy in an increasingly unpredictable global environment.

New Entry Rules for Indonesia: Foreign Travelers Must Complete Online Declaration

Expert commentary from International Investment

International Investment analysts emphasize that Indonesia’s tourism recovery in 2025 reflects a deliberate and well-coordinated strategy. Visa simplification, strengthened air connectivity and focused marketing campaigns have created a strong foundation for long-term growth. Experts note that rising tourist spending indicates a shift toward a more sustainable and high-value tourism model. With continued investment and market diversification, Indonesia is well-positioned to become one of Asia’s leading tourism powerhouses by the late 2020s, reshaping regional travel dynamics.

Tourist flows to Indonesia are growing, and the industry is evolving with the adoption of new technologies. At the same time, risks remain, primarily linked to natural disasters that cause millions of dollars in damage to the sector. In 2024, more than 1,200 such incidents were recorded. Still, experts maintain an optimistic outlook.

Indonesia Tourism Statistics: Arrivals and Hotel Occupancy

Minister of Tourism Widyanti Putri Wardana reported that in the first half of 2025, Indonesia welcomed 7.05 million international tourists, up 9.44% compared to the same period in 2024. Tourism became one of the factors enabling Indonesia’s GDP to grow 5.12% in Q2 2025, higher than 5.05% in the same quarter of 2024. The main inbound markets remained ASEAN countries, Asia, and Europe.

Meanwhile, occupancy rates in star-rated hotels dropped by 3.54 percentage points in H1 2025. However, the total number of occupied hotel rooms increased by 11.53%. The minister explained this trend by the growing supply on the market, with tourists increasingly opting for villas and alternative accommodations.

How the Indonesian government is boosting tourism

To maintain positive momentum, the government is implementing incentive measures. These include discounts from service providers on airline tickets, rail and ferry transport, and toll road payments. Such steps make travel more affordable and support the development of both domestic and inbound tourism.

New entry rules for Indonesia: foreigners must complete an online declaration

A Technavio study notes that the sector has shown positive momentum for several years. In 2020, Indonesia hosted over 15 million international tourists, up 5% from 2019, and more than 100 million domestic travelers. Growth has been driven by cultural heritage, diverse natural attractions, and improved infrastructure.

Indonesian Hotel Demand Statistics: Chain and Independent

The market divides between chain and independent hotels, and between leisure and business travel. In recent years, demand for sustainable tourism, sports, and gastronomy trips has grown sharply, opening new investment opportunities. Technology is becoming a key growth driver. Online booking, hotel management systems, digital marketing, and demand analytics improve efficiency and allow for flexible pricing. Hotels that adopted revenue management software reported a 10–12% increase in RevPAR, while partnerships with online travel agencies boosted bookings by 30%.

Innovation also shapes customer experience: mobile keys, chatbots, and virtual tours are becoming standard. These advances are paired with sustainable practices—energy saving, waste recycling, and community engagement—that matter to 75% of tourists choosing eco-friendly hotels.

Indonesia tightened visa extension rules for foreigners

The market is fragmented, with around two dozen notable players. These include Aryaduta Hotel Group, Double-Six Luxury Hotel Seminyak, Katamaran Resort, Kempinski, Novotel Bali, Pullman, The Ascott, and Tugu Hotels. New deals are underway: Marriott signed an agreement to launch Four Points by Sheraton Jakarta Thamrin in 2026; Accor partnered with Lippo Karawaci to rebrand part of its portfolio under Novotel, Mercure, and ibis; and PT Gran Meliya Hotels & Resorts raised $212 million for expansion. The government’s “10 New Balis” program also promises major new investments.

The industry employs more than 12 million people. In the coming years, the focus will be on diversifying tourism products, adopting new technologies, improving revenue management, and ensuring sustainable growth. Risks remain, particularly natural disasters and climate events. In 2024, more than 1,200 incidents—including floods and wildfires—directly impacted infrastructure and tourist flows. Past events, such as the 2018 Lombok earthquake, inflicted $500 million in damage, with recovery taking up to two years.

Regulatory risks for Indonesian tourism

It’s also important to factor in regulatory risks and complexities: tighter rules and extensions for foreigners, new online declarations—more friction on the demand side. In popular locations, restrictions on new construction and land-use/zoning are being debated and are periodically introduced.

Equally important, inflation pressures both sides of the model:

Costs are rising (wages, F&B inputs, utilities, cleaning/linen, service contracts, insurance).

Demand is compressing as airfares and overall traveler expenses increase—price elasticity caps ADR growth.

FX pass-through to imports. Even with moderate local CPI, imported items (kitchen equipment, HVAC, elevators, software, licenses, OTA commissions billed in foreign currency) become more expensive due to exchange-rate swings. This is a “second inflation” that doesn’t always show up in headline CPI.

Inflation in tourism isn’t just about CPI; it’s about structurally rising operating costs plus limited pricing power. Without timely tariff reindexation, energy-efficiency measures, and disciplined channel management, even growing tourist flows don’t guarantee margin preservation: nominal revenue rises while net yield declines.

Conclusion

Indonesia’s tourism sector is expanding, but project profitability depends not only on demand; it hinges on risk management quality. Investors who model returns without accounting for natural-disaster and regulatory risks often end up negative on free cash flow and see exit multiples compress.

The global hotel industry outlook remains positive—a roughly 6.5% CAGR over the next five years. From 2025 to 2029, experts expect the tourism and hotel market to increase by US$11.44 billion, with total market opportunities potentially reaching US$60.90 billion.

The outlook for the global hotel industry remains positive, with an average annual growth rate of about 6.5% over the next five years. From 2025 to 2029, experts expect the tourism and hotel market to increase by US$11.44 billion, with total market opportunities potentially reaching US$60.90 billion.

We recommend looking at markets where branded hotels are still scarce and tourism growth is steady and resilient. In particular, branded hotels in Georgia are currently attracting investors from a range of countries—including Israel, the UAE, and the United States—thanks to strong yields, capital appreciation, and investor-friendly terms.

Starting in 2026, Bali will prohibit the construction of new hotels and restaurants in six districts. The agreement was signed by Governor Wayan Koster and local regional leaders. The goal is to protect agricultural land from overdevelopment and concentrate tourism infrastructure in Bali’s central and southern zones, according to The Bali Sun.

Back in 2024, the authorities proposed a complete ban on tourism development, including hotels, villas, and clubs in Denpasar, Badung, Gianyar, and Tabanan. The proposal was submitted to Indonesia’s Ministry of Maritime Affairs and Investment, which responded favorably. At that time, moratorium periods ranging from two to ten years were discussed but never finalized.

As of 2023, Bali had 541 hotels—more than double the 249 reported just 11 years earlier. Authorities have reported numerous construction violations, often involving foreign investors. In 2024, Bali had around 200,000 foreign residents. Officials warned of negative impacts on crime rates and job competition.

The new regulation affects the districts of Tabanan, Jembrana, Buleleng, Bangli, Karangasem, and Klungkung. However, no restrictions will apply to the popular tourist hubs of Badung (Canggu, Uluwatu, Seminyak, Kuta, Legian, Nusa Dua) and Gianyar (Ubud), as well as Denpasar, which will remain the island’s main zones for accommodation and hospitality development.

Governor Koster emphasized that the purpose of the agreement is to preserve the balance between economic growth and natural resources, prevent land misuse, and ensure tourism revenues benefit the broader population. The six protected districts will focus on attractions and eco-tourism routes, while new hospitality projects will continue in the designated urban areas.

Starting in 2026, 10% of hotel and restaurant tax revenue collected in urbanized zones (known as Sarbagia: Denpasar, Badung, Gianyar, and Tabanan) will be redistributed to the six protected districts. This policy is expected to generate around 700 billion IDR per year (~$43 million). Funds will be allocated to infrastructure projects such as roadworks, bridges, and public space improvements. The use of these funds for private vehicle purchases or non-productive purposes will be prohibited.

The remaining funds will be distributed under the BKK special assistance program, which considers district size, population, and road conditions.

Governor Koster assured that fund distribution will be fair and apolitical:

“Even if the opposition governs in Karangasem, they will receive their share. My mission is to develop Bali fairly,” he stated.

Earlier, the governor announced the formation of a special task force to detect foreign-owned businesses operating without proper licenses. In Badung alone, there are an estimated 400 tourism-related firms formally owned by foreigners but lacking physical offices and local staff. All businesses will now be required to register with official associations and undergo verification. Particular attention will be paid to “phantom” companies using local nominee shareholders for illegal activity.

Additionally, since August 2025, foreigners can pay the Bali Tourism Tax Levy (150,000 IDR or ~$10) not only online but also directly at hotels, restaurants, and tourism sites. Businesses are offered a 3% incentive to assist in tax collection.

“We don’t expect businesses to work for free,” said Koster. “We’ve signed agreements with hotels and tourism players, and many are eager to participate. This will increase actual state revenue.”

Bali is tightening rules for foreigners in tourism and construction—including arrests for illegal building and breaches of local law. In recent years, fines and deportations have been issued for ignoring Balinese customs and legal procedures. Officials believe these changes will help combat chaotic development, protect green zones, and reduce land speculation and resource strain.

Starting May 29, 2025, Indonesia has implemented new visa extension requirements for foreign nationals. The latest regulation mandates in-person visits to immigration offices for photo identification and interviews — a shift from the previous fully online process via the eVisa portal, as reported by the Immigration Directorate.

Stricter Controls in Response to Visa Violations

According to Yuldi Yusman, Acting Head of the Directorate, the move is aimed at reducing immigration violations and holding guarantors more accountable. Guarantors, whether individuals or companies, are legally responsible for the behavior and status of foreign residents.

Between January and April 2025, authorities recorded 2,201 administrative violations — a 36.7% increase from the same period in 2024. Additionally, 546 foreign nationals were suspected of abusing visa terms, and 215 companies were identified as inactive or illegitimate.

Yusman emphasized the decision followed a comprehensive review and aims to improve transparency and uphold legal standards.

Exceptions for Vulnerable Groups

Vulnerable individuals — including the elderly, pregnant women, persons with disabilities, and those in emergencies — will be able to complete the process via a “one-stop” immigration service. This includes document submission, payment, photo capture, and interviews.

Officials stress the importance of honesty during interviews, urging foreigners to provide accurate information to avoid delays or complications.

Digital Paradox: Bali Offers Online-Only Renewals

In contrast to the nationwide tightening, the island of Bali has simplified its visa extension process. Foreign tourists can now complete visa extensions entirely online or upon arrival at Bali Airport, with a fee of 500,000 IDR (~$32).

The digital visa (eVoA) also grants access to fast-track automated immigration gates at Bali and Jakarta airports. This simplification comes despite Bali’s ongoing issues with visa violations and foreign misconduct.

Bali still enforces strict codes: bans on profanity, illegal work, unlicensed driving, and improper attire. Tourists are urged to respect local customs, avoid littering, and use licensed accommodations. Authorities monitor both physical behavior and digital activity — in 2024 alone, 417 foreigners (including Russians, Australians, and Americans) were deported for various offenses.

Conclusion

Indonesia’s immigration policy is becoming increasingly dual-tracked. While enforcement and in-person procedures are expanding nationwide, Bali continues to develop digital services to support tourism.

This hybrid approach reflects the government's intent to balance national security with economic tourism goals. However, foreign nationals are strongly advised to stay informed and comply with all regulations to avoid severe penalties.

The Bali government is considering a daily tourist tax to combat over-tourism, following Bhutan’s model, where nearly all foreign visitors must pay a $100 sustainable development fee, reports Euronews.

Bali legislator Wayan Puspa Negara believes the island should "select" its tourists like Bhutan does. The Himalayan kingdom limits arrivals to 400,000 visitors per year and previously charged up to $250 (240 EUR) per day. "They choose tourists based on spending capacity," he stated, adding that Indonesians pay a similar amount when visiting the U.S., Europe, or the UK.

Why is Bali Considering a Higher Tourist Tax?

Known as the "Island of Gods," Bali is one of Indonesia’s most visited destinations, with tourism making up over 60% of its economy in 2019. However, increasing tensions have arisen due to:

- Foreigners violating local customs and laws
- Traffic congestion caused by overtourism
- Unregulated land acquisitions by expats
- Environmental degradation due to rapid construction

Although Bali has been lenient toward tourists for years, authorities are now cracking down on offenders. Recently, the government shut down the controversial "Russian Village" at PARQ Ubud, an unauthorized expat community built on agricultural land. German national Andre Frey, the project’s founder, was arrested for lacking permits and misleading investors—highlighting a common issue on the island.

Moreover, foreign visitors are frequently deported for inappropriate behavior near sacred sites, illegal employment, reckless driving, and disrespecting local customs. The growing number of incidents has intensified calls for stricter regulations.

Government Actions to Control Tourism
As public dissatisfaction grows, Bali authorities are looking for ways to balance tourism with the well-being of locals and the environment.

2023: A proposal to ban tourist motorbike rentals was discussed to reduce traffic accidents.
2023: The construction of new hotels, villas, and nightclubs was suspended in overdeveloped areas.
2024: A one-time environmental fee of IDR 150,000 (€9) was introduced for visitors.
2025: A higher daily tax is under review to attract wealthier travelers.

Will a $100 Daily Tax Work?

Wayan Puspa Negara, director of a local tourism organization, estimated that a $100 per day tax would cost tourists nearly $725 for a one-week stay.

"A $100 daily tax would make Bali an ultra-exclusive destination, and many people would lose their jobs," warns Jens Erik Rasmussen, a travel journalist. Other experts also doubt the success of such a move, as Bali currently attracts visitors with its affordability rather than luxury offerings.

Other Southeast Asian Countries Implementing Tourist Taxes

Bali is not alone in exploring tourism taxes:

Thailand plans to introduce a 300 baht (€8.50) entry fee by the end of 2025 for all foreign arrivals, reports International Investment.

Would a high daily tax on tourists benefit or harm Bali’s economy? The debate continues.