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About two months ago we published our first forecasts for international visitor arrivals in Indonesia after the outbreak of the COVID-19 pandemic around the world. At the time we said that “making detailed projections about the timing and nature of the recovery of foreign visitors to Indonesia might seem like a fool’s errand at this stage of the COVID-19 pandemic”. The same could be said today, although things are becoming a little clearer.

Without knowing when governments will lift or ease restrictions on international travel and when airlines will resume modest services between countries, forecasting international travel remains something of a crapshoot.

Despite the unprecedented levels of uncertainty and the serious limits of predictability we have used our econometric forecasts of international visitor arrivals from Indonesia’s major source markets of Singapore, China, Australia, and India to derive our visitor forecasts for the period, 2020 to 2025.

We now forecast that international visitors to Indonesia will fall by about 50%, from 16.1 million in 2019 to 8.4 million in 2020. There is a 60% probability that the number of international visitors will fall to between 6.8 million and 10 million in 2020. It will not be until 2024 that the record of 16.1 million international visitors achieved in 2019 will be surpassed.

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Forecast of International Visitor Arrivals to Indonesia 2020 – 2025

Source: Hotel Investment Strategies, LLC based on Australian Bureau of Statistics, Economist Intelligence Unit, World Tourism Organization and International Air Transport Association data.

We believe there is a 60% probability that the number of visitors from Singapore to Indonesia will fall between 25% and 36% in 2020 with our mean forecast of 1.3 million, down from 1.9 million in 2019 or 31%. It will not be until 2022 that the record of 1.9 million Singapore visitors in 2019 will be surpassed.

Forecast of International Visitor Arrivals from Singapore to Indonesia 2020 – 2025

Singapore Arrivals
Source: Hotel Investment Strategies, LLC based on Australian Bureau of Statistics, Economist Intelligence Unit, World Tourism Organization and International Air Transport Association data.

There is significant risk associated with our forecasts of the Chinese market to Indonesia as demonstrated by the wideband in confidence intervals. We forecast that inbound visitors from China will fall to about 820,000 in 2020, down from 2.1 million in 2019.

Forecast of International Visitor Arrivals from China to Indonesia 2020 – 2025

Source: Hotel Investment Strategies, LLC based on Australian Bureau of Statistics, Economist Intelligence Unit, World Tourism Organization and International Air Transport Association data.

Visitors from Australia, an important source market for Indonesia’s major tourist destinations, will decline between 43% and 56% at the 60% confidence limit. The market is forecast to decline from 1.4 million in 2019 to about 697,000 in 2020. The market is likely to take many years to recover and is not likely to reach its peak visitor number for at least five years.

Forecast of International Visitor Arrivals from Australia to Indonesia 2020 – 2025

Source: Hotel Investment Strategies, LLC based on Australian Bureau of Statistics, Economist Intelligence Unit, World Tourism Organization and International Air Transport Association data.

The Indian inbound tourist market has been one of the fastest-growing markets for Bali, Indonesia’s major tourist destination in recent years. It grew from 224,000 visitors in 2014 to 657,000 in 2019, a CAGR of 24%. The Indian market is likely to halve in 2020, down from 657,000 in 2019 to 323,000 in 2020. The significant dispersion in our 80% : 20% confidence intervals highlights the significant risk associated with the forecasts for the Indian market over the next few years.

Forecast of International Visitor Arrivals from India to Indonesia 2020 – 2025

Source: Hotel Investment Strategies, LLC based on Australian Bureau of Statistics, Economist Intelligence Unit, World Tourism Organization and International Air Transport Association data.

It is important to recognize that Covid-19 will impact all visitor arrival forecasts to a degree, but the magnitude, duration & timing of the impact will vary across different inbound tourist markets. We continually reassess our forecasting strategies as new information becomes available.

We need to recognize that some demand patterns will return to “normal”, some will return to a new “normal”, and others will not return at all. Hoteliers and tourism operators will need to plan for different scenarios. In the face of great uncertainty, creating and communicating different forecasts for different scenarios is likely to be extremely useful. This can be as simple as “best case” and “worse case” or can be tied directly to varying assumptions about the future.

Our goal is not to produce 100% accurate forecasts – that is nearly impossible, given all that has happened and is likely to happen. Our goal is to try to get our forecasts in the ballpark, good enough to help our clients; hotel owners, investors, operators and governments make better decisions. Clients can then plan and manage their businesses effectively, and not waste resources doing it.

So in summary our advice for hotels, resorts and other hospitality companies when it comes to forecasting is:

  • Think hard about the big picture questions before you begin forecasting
  • Understand management’s current assumptions about the future
  • Define your phases and develop a strategy for each phase, i.e., isolation-containment-mitigation-reentry-recurrence-return to normal, etc.
  • Reassess your strategy frequently as new information becomes available and don’t be afraid to change your approach
  • Review/modify your forecasts more frequently to incorporate current information
  • Consider developing multiple scenario-based forecasts if appropriate, and
  • Carefully communicate your approach/assumptions to management and set reasonable expectations for accuracy – everyone needs to be on the same page.

We plan to update our forecasts every three months as new economic data becomes available for Indonesia and its major source markets. Please contact us if you believe we can assist you with your forecasting needs at the hotel, cluster or regional level.


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