On a recent bright Sunday morning, tourists sipped cool drinks and dined on platters of fried rice and satay at the air-conditioned Café Batavia, nestled inside a 19th-century building in Jakarta’s old colonial city, Kota Tua.
Outside, other structures built by the Dutch traders who once ran Jakarta crumbled in the tropical heat.
Officials say they hope one day Kota Tua’s canals and stone streets will resemble Venice. But for now, the scene is one of dilapidation, and Café Batavia is one of the few tourist-friendly restaurants in an area the government has designated for a major revitalization project.
“It’s lost in the dirt and grime,” said Sharon Venhoek, an Australian visiting her daughter in Jakarta. “If they were able to restore it, it would be amazing.”
Tourism is one of the “pillars” of Indonesia’s economic growth strategy, said Helen Marano, the vice president of government and industry affairs at the World Travel and Tourism Council, a global organization for travel businesses. Officials say an increase in tourist numbers would increase the country’s revenue, generate jobs for locals and help lift trade and investment.
“They’re trying to improve the health and wealth of the entire country, not just one center,” Ms. Marano said.
That means the industry is crucial at a time when the Indonesian economy may be poised to take off.
Indonesia has found foreign direct investment surging 27 percent in the first quarter to a record 65.5 trillion rupiah, or $6.7 billion, according to official figures released last week. But in a March 18 report, the World Bank said regulatory uncertainty, specifically in the resources sector, could slow growth. Costly fuel subsidies continue to drain the state budget, and lower prices for the commodities that make up nearly two-thirds of the country’s exports have pushed the country’s current account — a measure of foreign trade and investment — into deficit.
“Now that the current account has deteriorated because of low exports, because of the prices of commodities, tourism is an easy way to increase foreign exchange earnings,” said Fauzi Ichsan, a senior economist and head of government relations at Standard Chartered Bank in Jakarta. “Plus, you’ve got huge sources of tourists from China, India and the other Asian countries that have been doing well over the past five years.”
Indeed, tourism is the country’s fifth-largest foreign currency earner, after several major commodities — oil and natural gas, palm oil, coal and rubber.
Tourism to the Asia-Pacific region has grown faster than in all other regions in the world over the past two years and is expected to grow between 5 percent and 6 percent in 2013, according the U.N. World Tourism Organization. Much of that growth will come from within the region, and travel industry analysts say Indonesia wants to do more to attract tourists from Asia, and particularly from China.
The number of foreign visitors to Indonesia has grown consistently over the past seven years, to eight million last year from five million in 2005, according to the U.N. tourism organization, which ranks Indonesia 33rd among 50 countries for tourist arrivals, below Singapore, Thailand and Malaysia, but above Vietnam and India.
Revenue from tourism is up too, to $9.12 billion last year from $6.3 billion in 2009, according to the Indonesian tourism ministry, which calculates data using a method developed by the U.N. agency.
Total spending from tourists and investment contributed about 250 billion rupiah to the country’s economy in 2012; that represented about 3 percent of gross domestic product, according to the World Travel and Tourism Council, which projects that the number will grow to 8.5 percent of G.D.P. in 2013.
To increase the number of foreign visitors to 10 million by 2014, the tourism ministry has participated in international travel fairs, promoting the slogan “Wonderful Indonesia.”
But there are obstacles. The problems with Jakarta’s old city — poor infrastructure, lack of tourist facilities like hotels and restaurants and concerns about safety and security — apply to many of the country’s other destinations too.
On April 13, a Lion Air jetliner crashed just short of a runway in Bali, landing in the water. No one onboard was killed, but the accident renewed concerns that rapid growth of the country’s airlines had outpaced infrastructure and led to a shortage of skilled pilots.
In its 2013 travel and tourism competitiveness index, which ranks nations according to their ability to develop their tourism industries, the World Economic Forum ranked Indonesia 70th out of 140 countries. That is an improvement from the last time the study was done, in 2011, and puts Indonesia above the Philippines, at 82.
The economic forum gives Indonesia high marks for its biodiversity and rich natural and cultural resources but says underdeveloped infrastructure and unsustainable development of the tourism sector are holding it back.
“People who’ve never been here before might not want to promote it to their friends,” said Gathut Dwi Hastoro, the head of Kota Tua’s management unit. “We need parking, money changers, bookshops.”
Mari Pangestu, the minister of tourism and creative economy, said she was well aware of the challenges and had been working with local governments and other ministries, like those for transportation and health, to improve areas designated for tourism development.
Those include Kota Tua, scuba diving destinations off the coast of the island of Sulawesi, the Buddhist temple Borobudur and Komodo Island, home to Komodo dragons — large lizards that are indigenous to Indonesia.
Of the 16 destinations being focused on, Bali, Yogyakarta and Jakarta are most ready to welcome masses of visitors, aside from needing a little extra “push” to improve infrastructure, Ms. Pangestu said.
Travel for meetings and exhibitions is one area she said had undergone “huge growth,” thanks in large part to interest from business associations and forums wanting to become more involved in an economy that has been expanding at a rate of more than 6 percent per year since 2010.
Payam Safa, a commercial director at Surya Internusa Hotels, a local company developing Batiqa, a midprice hotel chain, says tourism is aiding private investment.
“You have a lot of people flying in for work, and they need a place to stay. If you don’t have hotels, then you can’t support growth,” he said.
As one of Indonesia’s best-known tourist destinations, however, Bali has struggled to cope with unabated hotel development in the island’s south, traffic jams and an absence of trash collection that has left beaches littered with rubbish.
Ms. Pangestu says the local government is taking steps to ensure that Bali can manage a growing number of visitors. The airport there is being upgraded to accommodate 25 million passengers a year, and more than 12,000 hotel rooms are being added.
“At the same time we want to develop other places so that there’s more diversification,” she said.
The government will open 19 new airports by 2015 and is preparing 10 ports to accommodate cruise ships. It is setting up local management units to train hotel and restaurant workers and get local communities involved.
“What we want is sustainable tourism in the environmental sense, social, economic and cultural sense,” Ms. Pangestu said. “You want to ensure that these destinations maintain their local culture, tradition and local wisdom but develop it in a way that can be understood and enjoyed by visitors.”
The government is not just trying to appeal to foreigners. Analysts say Indonesia’s rising middle class and the rapid growth of low-cost airlines will increase mass tourism from outside and inside the country. According to Ms. Pangestu, a surge in domestic travel among Indonesians with growing disposable incomes has bolstered investments in hotels and restaurants by more than 200 percent since 2011.
But marketing analysts say the government has failed to come up with a unified tourism strategy.
“There’s no clear objective as a nation about how we promote ourselves,” said Djohansyah Saleh, the head of operations at Weber Shandwick, a public relations firm that has provided marketing recommendations to the tourism ministry.
Ms. Pangestu said she strongly supports the revitalization of Kota Tua and hopes to develop creative centers there to attract more tourists.
“You’ve got to create activity and life — bring back the soul to the city,” she said.
And some tourists say that soul is part of what makes visiting Indonesia interesting.
“It’s a different culture, just seeing things completely different to what you see at home,” said Brianna Peake, a communications adviser for a cooperative of grain farmers in Western Australia who were visiting Jakarta on business. “It’s a bit chaotic, very, very friendly, and a lot of fun.”