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Indonesia s business boom

2013-06-14 07:22:02

In Indonesia Business By Nick Easen

With a one-trillion-dollar economy growing at 6% a year, Indonesia is Southeast

Asia's largest market, and is becoming increasingly attractive to road

warriors.

The nation s overseas and domestic business travel market is in good health due

to rising investment and a growing middle class. Business events and commercial

interest are spilling out of the capital, Jakarta, and into other major

Indonesian cities, with Batam, Bintan, Medan and the island of Bali drawing

many executives. And following a regulation mandating that oil, gas and natural

resources companies invest in the local area, the expanding energy and

pharmaceutical sectors are funding business travel and business events

throughout country.

An oil company operating rigs or vessels in one area needs to book all its

travel from local suppliers and not use agents based outside the country, said

Adam Knights, group sales director at ATPi, a travel management company.

In addition, the country will host various Asia-Pacific Economic Cooperation

conferences this year, such as the CEO Summit, the Trade Finance and Treasury

Reform meetings.

Indonesia s economy is predicted to be larger than Germany s in terms of

projected GDP by 2050, according to consultancy firm PricewaterhouseCoopers. An

additional 100,000 guest rooms will need to be built in the next decade just to

cope with demand, translating to an estimated 700 to 800 hotels.

The government forecasts that the number of air passengers, both business and

leisure, will increase by 12% this year, after growing by 15% to 72 million

passengers in 2012. Flying is one of the easiest ways to get around this

archipelago nation of more than 17,000 islands, where rail, ferries and roads

are still fairly undeveloped.

If Soekarna-Hatta, Indonesia s main airport in Jakarta, is anything to gauge

by, the country is already overwhelmed by air traffic. The airport handles

roughly 150,000 passengers a day more than double its capacity and is

planning a $2 billion expansion to triple its capacity. The much smaller Halim

Perdanakusuma Airport in the east of the city will open to commercial flights

in September to help ease the strain.

This is just one of more than 20 projects aimed at building and upgrading

Indonesian existing airports, many of which will be located in the east of the

country, including East Nusa Tenggara and Papua, according to airline operator

Angkasa Pura. This under-developed region has less infrastructure and

tourism-focused facilities than the islands of Java and Sumatra to the west.

Singapore Airlines is boosting links to the country by launching a daily flight

to Surabaya, the country s second largest city, on 26 July. In addition, the

airline is launching its ninth daily service to Jakarta and its fourth daily

service to Denpasar, Bali, on the same day. Tiger Airlines is ramping up its

services out of Singapore, launching flights to the cities of Yogyakarta

starting in July and Bandung in August.