Indonesia’s Heavy Focus on Bali Leaves Other Islands Struggling for Tourism Growth
August 1, 2025 — Indonesia’s tourism sector is heavily concentrated on the island of Bali, a strategy that is showing signs of strain while other parts of the archipelago remain overlooked despite their immense potential. As Bali grapples with overtourism and declining economic returns, lesser-known destinations like Ora Beach on Seram Island, Lake Toba in North Sumatra, and Raja Ampat in Papua continue to miss out on visitors due to inadequate infrastructure and limited connectivity.
Bali: Success and its Consequences
Bali, Indonesia’s most internationally recognized tourism hotspot, has long been the country’s flagship destination. Following the COVID-19 pandemic, the government doubled down on this strategy, aspiring to transform Bali not just as a vacation spot but also into a multifaceted economic hub. Initiatives include establishing family office hubs, expanding seaweed export centers, and launching the Sanur Special Economic Zone dedicated to medical tourism.
Despite these ambitions, Bali’s current trajectory reveals challenges. The island is plagued by traffic congestion, noise pollution, and environmental degradation. Local infrastructure is under strain, with plastic waste littering streets and water resources stretched thin—over 65% of Bali’s fresh water is diverted to luxury resorts while local villages experience shortages. Furthermore, heavy construction for villas and commercial properties threatens the sanctity of the island’s sacred Hindu temples and its iconic terraced paddy fields.
Economically, Bali’s growth has tapered, registering 5.5% in 2024, down from 5.7% the previous year. This decline is partly due to a drop in average tourist spending, especially following a significant decrease in visitors from China—a key market before the pandemic. Though visitor numbers in 2024 have already surpassed those in 2019, the quality of tourism and local living conditions are under strain, suggesting that Bali may be a victim of its own overwhelming success.
The Untapped Potential of Other Islands
Beyond Bali, many Indonesian islands offer pristine environments and unique cultural experiences but struggle due to poor accessibility and lack of infrastructure investment.
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Ora Beach, Seram Island: Known for its crystal-clear waters and untouched natural beauty, Ora Beach offers a Maldives-like experience at a fraction of the cost. However, getting there is arduous, involving a flight to Ambon, a ferry to Seram Island, and a lengthy car ride. The lack of an airport and limited ferry services deters many potential visitors.
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Lake Toba, North Sumatra: The world’s largest volcanic lake and its surrounding landscape offer spectacular views and growing hotel developments. Despite hosting international events like the F1H2O Powerboat World Championship, Lake Toba lacks direct international flights, hindering its tourist influx.
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Raja Ampat, Papua: Famous for the world’s most diverse coral reef ecosystem, Raja Ampat remains relatively isolated, with no direct international flights. This hampers efforts to attract high volumes of tourists seeking premium diving and nature experiences.
Local tourism operators have expressed frustration over the lack of coordinated efforts to improve infrastructure and reduce travel costs. Irfan Muddin, who manages Ora Sunrise View Resort, has repeatedly lobbied for airport development on Seram Island to enhance connectivity and make the area more accessible to both domestic and international visitors.
Challenges of Coordination and Competition
Indonesia’s sprawling archipelago comprises over 17,000 islands, creating a logistical challenge for tourism development. Previous government initiatives aimed at creating “10 new Balis” in other regions have seen limited success, often faltering due to insufficient collaboration between ministries and local governments.
Comparatively, regional neighbors like Thailand and Vietnam have successfully diversified their tourism offerings. Thailand provides multiple beach destinations from Phuket to Koh Samui, while Vietnam boasts areas ranging from Ha Long Bay to Phu Quoc, which is undergoing rapid infrastructure upgrades in preparation for APEC 2027. These countries are nearing or surpassing pre-pandemic tourism levels, putting Indonesia at risk of losing market share if it does not broaden its tourism development focus.
Economists warn that continued over-reliance on Bali could come at a growing opportunity cost. “To truly compete, Indonesia needs to act more like a tourism federation, empowering provinces and building unique destinations within the national umbrella,” said Samer El Hajjar, a senior marketing lecturer at Singapore’s National University. Achieving this would require stronger political will, better inter-agency coordination, and a strategic tourism mindset that leverages the country’s vast and diverse natural and cultural assets more effectively.
Looking Ahead
While Bali’s popularity shows no immediate signs of diminishing, the strain on infrastructure and environment combined with slowing economic benefits signals a need for diversification. Investments in transportation—such as airport upgrades and new routes—and enhanced local infrastructure in emerging destinations are urgently needed to unlock Indonesia’s broader tourism potential.
Efforts like the expansion of Labuan Bajo Airport and the introduction of international flights to the area near Komodo Island demonstrate the possibilities if strategic focus is broadened. However, without a concerted national push to develop and promote other gems in the archipelago, Indonesia risks squandering valuable opportunities in a rapidly evolving regional tourism market.
As the world continues to reopen post-pandemic, Indonesia stands at a crossroads. Its natural beauty and cultural richness could propel it to become a global tourism powerhouse, but that will require moving beyond Bali-centric policies and recognizing the vast experiences waiting to be discovered across the archipelago.
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