Liga Asuransi – 2025 is shaping up to be an exciting year for the Indonesian economy. After several challenging years due to the pandemic and global turmoil, the tourism sector is once again becoming a driving force for the national economy. The latest data from the Ministry of Tourism and Creative Economy (Kemenparekraf) shows that by the third quarter of 2025, the number of foreign tourists visiting Indonesia reached 11.2 million visits—an increase of nearly 28% compared to the same period last year.
This increase not only occurred in main destinations such as Bali, but also in the areas of Labuan Bajo, Mandalika, Lake Toba, Likupang, and Yogyakarta, which are now part of the strategy Super Priority Destination Meanwhile, domestic tourism also showed a positive trend, with more than 700 million trips recorded throughout the year, an increase of around 20% compared to 2024.
On the ground, this revival is palpable. Hotels are back in full swing, domestic and international flights are increasing rapidly, and creative economy players—from local artisans to concert organizers—are enjoying a busy season once again. The Central Statistics Agency (BPS) noted that the tourism sector’s contribution to national GDP has now reached 5.4%, up from 4.7% the previous year. This figure is a strong signal that tourism is not just an entertainment sector, but a key pillar of national economic recovery.
However, behind this good news lies another, less frequently discussed, aspect: the risks that grow with increased tourism activity. From hotel fires and accidents in tourist areas, to flight disruptions, to the potential for natural disasters at destinations—all of these create new risk exposures that need to be anticipated.
The revival of tourism isn’t just about the number of tourists, but also about how the sector can grow sustainably and be protected. This is where the insurance industry plays a crucial role, particularly in protecting businesses in the transportation, hospitality, events, and tourism infrastructure sectors.
In this context, L&G Insurance Brokers acts as a strategic partner, helping businesses in the tourism sector understand risks, prepare appropriate protection, and ensure claims are handled fairly when risks do occur.
“As tourism grows, so does risk. But with the right insurance strategy, the two can balance each other—supporting a resilient and sustainable economy.”
Economic Impact: Multiplier Effect of Tourist Surge
The tourist boom in 2025 will not only bring airports and hotels back to life. It will also create…economic domino effectThe impact is felt even in remote areas. The tourism sector has proven to be a driving force across industries—from MSMEs and logistics to transportation and construction.
Here are some real economic impacts of the increase in domestic and foreign tourists in Indonesia:
1. MSMEs and the Creative Economy Rebound
Busy tourism means increased consumption. MSMEs in the culinary, crafts, souvenirs, and small-scale accommodation sectors are revitalized. According to reports,Bank Indonesia Q2 2025, more than 60% of MSMEs in tourist destination areas recorded an increase in turnover of over 25%compared to the previous year.
Local products such as Gayo coffee, NTT woven fabrics, and coastal batik are once again in demand by tourists, while local restaurants and tour operators are seeing a surge in demand. The creative industry—particularly music, art, and events—is also experiencing a resurgence due to the increase in concerts and festivals in key tourist destinations.
The effects are not only economic, but also social:new job opportunities are wide open.Many local people are now returning to work as tour guides, drivers, and homestay managers.
2. Infrastructure Investment Flows Rapidly
The growth in tourism is driving a wave of new investment, both from the government and the private sector. Expansion projectsKomodo Airport in Labuan Bajo, capacity increaseBenoa Harbor in Bali, as well as developmentaccess road to Mandalika and Likupangis a real example of how infrastructure supports tourism.
The development of star-rated hotels and international resorts is also increasing.Colliers Indonesia (2025)shows that the level of hotel property investment is growing18% year-on-year, the highest since 2018.
However, this infrastructure improvement also brings new risk exposure: construction, occupational safety, and legal responsibilities for contractors. This is where project and liability insurance play an important role in maintaining investment sustainability.
3. Transportation and Logistics Increase Sharply
The growth of tourism means greater movement of people and goods.
The airline set a new record with more than 12,000 flights per week, while the cruise tourism sector—especially in Labuan Bajo and Raja Ampat—will almost double compared to 2024.
But on the other hand, operational risks also increase Flight delays, extreme weather, or ship damage can give rise to the potential for large claims.
In addition, with the increasing demand for logistics for the distribution of food and tourism products, transportation companies now increasingly need Marine Cargo Insurance to protect goods from the risk of loss or damage during transit.
Overall,Every 1 rupiah spent by tourists produces a multiplier effect in various economic sectors.This is what is called multiplier effect— and 2025 proves that tourism is not just about destinations, but a national economic engine which increases consumption, creates jobs, and attracts investment.
However, behind the warming economic activity, one thing needs to be remembered: the greater the economic turnover,the greater the risk that lurks.
And if risks are not properly mitigated, the financial impact could extend to wider economic chains.
The Direct Impact of the Surge in Tourists on the National Economy
The large number of tourist arrivals has had a significant domino effect on the Indonesian economy. In the context of Q4 2025, increased global mobility following several years of post-pandemic recovery, coupled with political stability and the government’s aggressive tourism promotion, has made Indonesia one of the most popular destinations in Southeast Asia.
Some sectors that are directly impacted include:
- Hospitality and Accommodation Sector
Hotel rooms in Bali, Labuan Bajo, Yogyakarta, and other major destinations are experiencing occupancy rates approaching 90%. This not only revitalizes large hotels but also strengthens local economies through small guesthouses, villas, and homestays, which are now also insured due to the increased asset value and risk to guests. - Transportation and Logistics Sector
With the rise in the number of domestic and international flights, airlines, car rental companies, and tour operators are experiencing significant increases in demand. The risk of accidents, delays, or lost luggage is also increasing—presenting a significant opportunity for the travel and transportation insurance sector. - MSMEs and Creative Economy
Tourists are now a driving force for sales of local products, from culinary delights and fashion to handicrafts. However, on the other hand, increased demand also brings risks for small producers, including fire, theft, and legal liability. This is where…small business insurance (SME Insurance) become a vital protection solution. - Public Infrastructure and Government Investment
Massive tourist influxes have driven the development of new infrastructure—airports, toll roads, ports, and integrated tourism areas. These projects involve trillions of rupiah in investment, which of course requires construction, liability, and engineering insurance so that the risk of financial loss due to accidents or construction delays can be minimized.
4. Insurance Sector: From Spectator to Driver
If previously the insurance industry was only a complement to tourism activities, now its role has changed to…the main driver of the stability of the tourism economy.
Some of the insurance products that are most relevant to the surge in tourists in 2025 include:
- Travel Insurance
The more tourists there are, the greater the potential for disruptions such as flight cancellations, lost luggage, or minor accidents. Travel insurance is no longer an optional extra, but mandatory conditions which are recommended by many travel agents and even by some international airlines. - Property & Asset Insurance
Hotels, restaurants, and resorts are now major investment hubs. Property insurance protects against fire, floods, and operational disruptions due to facility damage. In Bali and Lombok, many property developers now require this protection.Property All Risks (PAR)before opening operations. - Liability Insurance (Legal Liability Insurance)
Accidents involving tourists in public areas or recreational areas can result in large claims. Therefore,liability insurance becomes important for tour operators, theme parks, resort managers, and tourist transportation companies. - Event Cancellation Insurance
The surge in festivals and cultural events held in various regions also raises the risk of cancellation due to extreme weather or other disruptions. Event cancellation insurance is a new form of protection that is gaining popularity in the tourism and entertainment industries.
How Insurance Brokers Can Help the Travel Industry in 2025
With increasing tourist mobility and the rapid flow of investment in the tourism sector, the need for risk protection is increasingly complex. Simply purchasing a policy outright is no longer sufficient—it requires thorough analysis, negotiation with various insurance companies, and adapting to the highly dynamic nature of the tourism business. This is where the role of insurance brokers becomes crucial.
Following are some of the major contributions of insurance brokers such as L&G Insurance Broker in supporting the Indonesian tourism industry in 2025:
- Providing Appropriate and Measurable Insurance Solutions
Each player in the tourism industry has a different risk profile. Beach resorts, family theme parks, and even cruise ship operators have unique exposures. Brokers help identify and design insurance programs that meet these needs.customized, good for property, liability, travel, and employee safety. - Negotiate More Competitive Premiums and Policy Terms
Brokers have access to numerous insurance companies, both local and international. This allows brokers like L&G to obtain the best premium rates with maximum coverage, ensuring clients’ businesses are not burdened with high costs but remain optimally protected. - Assistance When a Claim Occurs
One of the biggest problems in the insurance industry is the complicated and time-consuming claims process. Brokers are responsible for ensuring that clients’ claims are paid promptly and appropriately, as brokers work for the benefit of the clients, not the insurance company. - Providing Risk Education and Prevention Recommendations
L&G Insurance Broker actively provides risk assessments and mitigation recommendations, ensuring clients understand how to mitigate potential losses, not just relying on policies. For example, ensuring a hotel’s fire protection system is functioning properly or reviewing liability contracts with tour vendors. - Support for Growing Industries
Brokers also act as strategic business consultants. By 2025, many tourism MSMEs will be scaling up, and L&G is helping them gain access to adequate, affordable protection—from small business insurance packages to travel vehicles and seasonal employees.
Conclusion and Recommendations
The surge of international tourists flooding Indonesia in 2025 is not only a sign of the revival of the tourism sector, but also a warning to businesses to be better prepared for the risks that come with it. Every investment in this sector—from hotels and transportation to creative businesses—requires comprehensive protection to prevent economic growth from being easily disrupted.
Insurance is no longer just an administrative obligation, but rather part of a sustainable business strategy. Amidst a fluctuating global economic climate and increasingly frequent extreme weather events, a business without protection is like walking on the edge of a cliff without a safety rail.
L&G Insurance Broker is a partner that understands the complex risks of the Indonesian tourism industry. With extensive experience in Property, Liability, Marine, and Engineering Insurance, L&G is ready to help your business find the most appropriate, efficient, and tailored protection solution. Contact L&G Insurance Broker today for a free consultation and start protecting your business from the risks that may come with the significant opportunities in the tourism sector in 2025.
