The increase in non‑subsidized fuel prices, including aviation fuel and non‑subsidized LPG, is projected to indirectly affect the tourism sector.
Executive Director of the Center of Economic and Law Studies (Celios), Bhima Yudhistira Adhinegara, said on Monday (April 20) that the impact of rising energy costs will ripple across various tourism industries, from transportation to service prices at tourist destinations.
According to him, higher logistics and energy costs will drive inflation in restaurant food and beverage prices, tour package rates, and airline tickets. This leaves businesses with little room to absorb costs.
“Energy costs will inevitably be passed on to consumers. Price adjustments cannot be avoided, and this will weaken tourists’ purchasing power,” he said.
The immediate impact is expected to change domestic travel patterns. Tourists may prefer closer destinations or switch to staycations to reduce expenses.
As a result, regions heavily dependent on tourism, such as Bali and West Nusa Tenggara, risk experiencing a decline in economic activity.
Bhima noted that pressure on the tourism sector is intensifying, as the industry had already been affected by government budget efficiency measures, particularly cuts in official travel that hit the MICE (Meeting, Incentive, Convention, Exhibition) segment.
“Now, with rising energy and food costs, the tourism sector is being hit even harder. Without intervention, the impact could spread to declining visitor numbers and reduced regional revenue,” he said.
He urged both central and regional governments to immediately issue compensation policies to maintain purchasing power and business sustainability.
Proposed measures include lowering VAT from 11% to 9%, providing wage subsidies for six months, and offering up to 40 percent discounts on electricity tariffs specifically for the hotel sector.
He emphasized that compensation policies are crucial so that the burden of rising costs is not entirely placed on consumers and businesses.
Without such policies, domestic tourism competitiveness may weaken, especially in regions highly reliant on tourist arrivals.
“If not addressed quickly, this could slow down the recovery of tourism‑based regional economies,” he stressed.
Sources : BisnisBali
Feat Image : via iStock
