Decreasing Purchasing Power Threatens Domestic Tourism Ahead of Peak Season, Warns Asita
Jakarta. The Indonesian Travel Agents Association (Asita) blames decreased purchasing power as a key reason for the decline in domestic tourist trips, coinciding with five months of deflation. This trend raises concerns for the travel industry as it approaches the peak season.
“Yes, this decline in purchasing power is one of the significant factors affecting the situation. That is why we hope that by November and December, this issue will be resolved, allowing domestic and international tourism activities in Indonesia to return to normal during the peak season in December,” said Budianto Ardiansyah, Secretary-General of Asita, during an interview on IDTV on Thursday.
Previously, the Central Statistics Agency (BPS) reported a deflation of 0.12 percent in September, marking the fifth monthly deflation this year, with an annual inflation rate of 1.84 percent. This decline in purchasing power has led people to prioritize essential purchases, sidelining secondary needs such as travel.
“When purchasing power decreases, people will prioritize their spending. Travel activities may become a lower priority. This could be one of the reasons for the continued decline in domestic travel activities in August,” he explained.
According to BPS, the number of trips taken by domestic tourists in August reached 75.88 million, a 1.77 percent decrease from July 2024, which recorded 77.24 million trips. However, compared to August 2023, domestic tourism experienced a 29.31 percent increase in August 2024.
Cumulatively, by August 2024, the number of domestic tourist trips reached 674.6 million, reflecting a 19.2 percent increase from the same period last year. This figure surpasses the number of trips taken during the same period in 2019, prior to the pandemic.
Separately, Chief Economic Affairs Minister Airlangga Hartarto said that deflation was driven by the government's effective management of food prices, rather than a decline in consumer purchasing power.
"This deflation is not a sign of weakened purchasing power, but rather the result of the government inflation control teams' efforts, including governors managing to reduce volatile prices," he said
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