Indonesia’s Eid travel is seeing a significant decline in 2025, with an estimated 24% drop in homecoming travelers compared to the previous year. This decline highlights the ongoing economic struggles, as weak purchasing power forces many people to reconsider travel plans. With rising costs and economic instability, many prioritize essential needs over holiday expenses.
Weak Purchasing Power Slows Eid Travel Plans
Economic pressures are making it harder for Indonesians to afford their annual Eid homecoming trips. Many families are facing increased costs of food, fuel, and transportation. Despite discounts on toll fees and airfare, financial constraints are pushing people to cancel or postpone travel.
Eko Listiyanto, a researcher at the Institute for Development of Economics and Finance (Indef), explained, “The decline in the number of homecoming travelers is directly linked to weakened consumer purchasing power.” Eko told Media Indonesia on Sunday, March 23, 2025, as cited by metrotvenews.com.
The cost of traveling is more than just transportation; it includes food, gifts, and expenses at their hometowns. For many, these costs are now too burdensome.
Declining Consumer Spending During Eid 2025
The impact of Eid travel decline is rippling through key industries. Retailers, transportation services, and hospitality businesses usually experience a surge in demand during Eid. However, this year, the outlook appears weaker.
According to the Ministry of Transportation, the number of travelers is expected to be around 146.48 million, a sharp decline from the 193.6 million recorded last year. This translates to lower revenue for businesses that depend on holiday spending. The informal sector, including street vendors and small shops at transportation hubs, is also feeling the strain.
According to public policy expert Achmad Nur Hidayat, “The projected decline in homecoming travelers reinforces indications of an ongoing economic downturn, where purchasing power is being squeezed by rising living costs and job market uncertainty.” He stated, as reported by metrotvnews.com. Many people are cutting back on discretionary spending, and businesses are already experiencing reduced demand.
Economic Factors Behind Weak Purchasing Power
Several factors are contributing to the decline in purchasing power. Deflation, job market instability, and inflation in key sectors have made it harder for consumers to spend. According to Christiantoko, Executive Director of NEXT Indonesia Center, “This is the lowest annual price movement since January 2000 when deflation was recorded at 1.1%.” he said, as cited by inilah.com.
A report on Indonesia’s January 2025 deflation revealed that the country is experiencing its worst deflation in over two decades. The Central Bureau of Statistics (BPS) reported a 0.09% year-on-year deflation in February 2025, a rare occurrence that indicates weak consumer demand. As prices drop, businesses struggle with lower sales, further slowing economic recovery.
Additionally, a survey by Bank Indonesia showed a decline in consumer confidence. Many people believe that job opportunities are scarce, leading to greater financial caution. “BI’s survey showed that declining consumer confidence is driven by perceptions of limited job availability. This belief has led to reduced confidence in income stability,” Christiantoko explained.
Government and Business Responses to Eid Travel Decline
The government and businesses are attempting to counter the economic slowdown. The Ministry of Transportation has prepared 30,451 buses, 772 ships, 404 airplanes, and 2,550 trains to facilitate Eid travel. However, with fewer travelers, businesses are adjusting their strategies to attract consumers.
Retailers and service providers are offering discounts and promotional deals. Some transportation companies are lowering prices to encourage travel. However, these measures may not be enough to fully recover the drop in spending.
The Road Ahead for Indonesia’s Economy
The decline in Eid travel and spending reflects broader economic challenges. While government initiatives may help stabilize the market, long-term recovery depends on improving job security and consumer confidence.
Shinta Widjaja Kamdani, Chairwoman of the Indonesian Employers Association (Apindo), emphasized the need for structural reforms. She stated, as reported by Media Indonesia, “We recommend enhancing policies that boost national competitiveness, such as structural reforms focused on reducing operational costs—logistics cost reduction, supply chain efficiency, and regulatory simplification.” These efforts could help businesses and consumers regain financial stability.
With weak purchasing power continuing to impact economic activities, Indonesia faces a challenging road ahead. However, with the right policies and strategic adjustments, there is hope for a gradual recovery post-Eid.
Source: mediaindonesia.com, inilah.com, metrotvnews.com
Image: Getty Images
