Bali’s tourism industry certainly faced substantial challenges last year, particularly because of increased activity from the volcano Mt. Agung. Despite the stranding and evacuation of thousands of Chinese tourists in November and December, the island’s tourism industry fared quite well overall. According to statistics from the Bali Provincial Government, Chinese tourists, in particular, drove growth, surpassing Australian tourists to become Bali’s biggest tourism source market.

China became Bali’s biggest tourism source market in 2017, surpassing Australia for the first time

Since 2015, Bali’s tourism numbers have grown exponentially. 2015 saw 4,001,835 foreign tourists. In comparison, 2017 saw a whopping 5,697,739 foreign tourists come to the island, representing growth of 42 percent in just two years. China has easily been the biggest source of overall growth in foreign tourist arrivals. The number of Chinese tourists grew by 20.1 percent in 2016 and by 24.3 percent in 2017, to reach a total of 1,385,850 tourists last year.

On the other hand, Bali’s traditional primary tourist source market, Australia, has been sending fewer tourists. While still an important market with 1,094,974 tourists in 2017, this nonetheless represents a drop of 48,186 from 2016 or around 4 percent compared to 2016. This firmly places China as Bali’s most significant source market and represents a historic shift for the island and its tourism industry.

Bali has seen a growth of 42 percent in the number of foreign arrivals since 2015

Still, this rapid growth in tourism does not come without substantial costs. The most obvious being environmental. The ecological crisis brought about by the growth in tourism and subsequent interest in development projects by foreign and domestic Indonesian firms has prompted a substantial, local backlash.

While the support by the Indonesian government of such projects is problematic, the rapid rise of tourism to Bali has given both the Bali government and the national government little opportunity to plan ahead. Last year, the Indonesian government under president Jokowi announced a new initiative to create “10 Balis” around the country by improving transportation infrastructure to facilitate growth.

The Indonesian government hopes to promote 10 further key destinations around the country to facilitate the development of the tourism industry

While ostensibly the plan is to boost Indonesia’s tourism industry, it may also ease some of the pressure of tourism upon Bali by providing alternative destinations.

Indonesia represents a quality, “budget” destination for Chinese tourists. Flights to Indonesia from China are relatively cheap and cost of accommodation and transportation are also quite low, even compared to China. With a growing number of Chinese tourists going abroad, Indonesia is primed to be one of the biggest beneficiaries of this major shift in the global tourism market. The country’s visa-exempt agreement with China doesn’t hurt either.

The long-term success of Indonesia as a Chinese tourist destination hinges on the ability of the national government to more evenly distribute newly arriving tourists throughout the Indonesian archipelago, instead of focusing on the tiny island of Bali. Ideally, Bali will be able to attract more high-end tourists to maintain revenue and keep steady or even decrease the total number of foreign arrivals.