Bridging Islands: What the Caribbean Can Learn from Indonesia’s Domestic Travel Revolution

The Caribbean and Indonesia share a fundamental challenge: both are archipelagic regions where connecting islands efficiently determines economic vitality. Yet while Indonesia celebrated over 900 million domestic trips in 2025, representing a remarkable surge in intra-regional mobility, Caribbean travelers face a paradoxical reality where flying between neighboring islands often costs as much as transcontinental journeys to New York or London.

This stark contrast reveals critical lessons about regional connectivity, infrastructure development, and policy coordination that could reshape Caribbean tourism and economic integration.

The Connectivity Paradox: Two Archipelagos, Vastly Different Outcomes

Indonesia comprises more than 17,000 islands scattered across Southeast Asia, while the Caribbean features dozens of island nations and territories spanning the region. Both face similar geographical challenges, yet their approaches to intra-regional travel have produced dramatically different results.

Indonesia’s tourism sector recorded 331.37 million domestic visits in the second quarter of 2025 alone, marking a 22.32 percent increase year-over-year. The archipelago nation has built a thriving domestic travel economy that contributed significantly to its 5.12 percent GDP growth, driven by strategic investments in air connectivity and multi-modal transportation options.

Meanwhile, the Caribbean struggles with what industry experts describe as disjointed and prohibitively expensive regional travel. Despite welcoming 34 million international tourists in 2024, intra-Caribbean connectivity remains severely limited, with domestic air traffic accounting for only 3 million seats annually and direct regional connections representing just 8.2 percent of total air flows in the region.

Five Critical Success Factors Behind Indonesia’s Connectivity Triumph

1. Aggressive Airline Competition and Route Development

Indonesia has cultivated a competitive aviation ecosystem featuring multiple carriers serving domestic routes. Garuda Indonesia, the national flag carrier, operates 134 aircraft to 90 destinations, while low-cost carriers including Lion Air, Batik Air, and Citilink provide affordable alternatives connecting even remote regions.

TransNusa, launched just three years ago, exemplifies this competitive spirit by rapidly expanding to link tourism hotspots like Bali, Lombok, Sorong, and Timika with efficient, high-quality service. The airline industry’s focus on connecting secondary destinations has created a web of routes that make inter-island travel accessible and affordable.

The Caribbean, conversely, operates in what researchers characterize as a concentrated, even monopolistic market for intra-regional routes. Island governments maintain publicly owned carriers to preserve airlift, but these airlines function largely as separate entities with minimal cooperation. Over thirty Caribbean carriers have ceased operations in the past three decades due to poor capitalization and lack of economies of scale.

2. Strategic Infrastructure Investment and Airport Modernization

Indonesia has prioritized airport expansion and modernization as cornerstones of its connectivity strategy. Soekarno-Hatta International Airport in Jakarta serves as the nation’s primary hub, while regional airports have undergone substantial upgrades to accommodate growing passenger volumes and improve the travel experience.

These infrastructure improvements extend beyond major hubs. The government’s commitment to expanding air connectivity to remote and emerging destinations has made previously isolated islands accessible, supporting both tourism development and economic integration.

Caribbean airport infrastructure, while adequate for international arrivals, faces challenges in facilitating intra-regional travel. The region lacks a functional hub-and-spoke system, with approximately 80 percent of routes featuring annual capacity below 30,000 passengers, indicating either seasonal operations or financial unsustainability.

3. Coordinated Government Policy and Regulatory Frameworks

Indonesia’s success stems partly from coordinated national policies that treat domestic connectivity as an economic development priority. The government has implemented visa-free travel for 96 countries, streamlined customs procedures, and invested in tourism promotion campaigns that highlight the country’s diverse attractions beyond traditional destinations like Bali.

This policy coordination extends to public-private partnerships that mobilize resources for airport development, hotel construction, and transportation services. The Tourism Ministry’s ambitious target of 16 million foreign arrivals in 2025 demonstrates governmental commitment backed by concrete infrastructure and marketing investments.

The Caribbean faces fragmentation across multiple independent nations, each with distinct regulations, immigration policies, and aviation agreements. This lack of unified regional policy creates barriers to seamless travel. Taxes and fees on regional tickets average approximately 80 percent of base airfare charges, comprising over 40 percent of total ticket costs—among the highest worldwide according to international airline industry data.

4. Development of Alternative Transportation Options

Indonesia’s connectivity strategy includes maritime transportation alongside aviation. While focusing primarily on air travel, the government recognizes ferry services as complementary options for inter-island connections, particularly for shorter distances and cargo transport.

The Caribbean possesses natural advantages for maritime passenger services given the proximity of many islands, yet this market remains severely underdeveloped. Ferry services exist primarily as domestic inter-island connections dominated by monopolies. Only two routes in the entire region feature competition from multiple operators.

Developing high-performance ferry networks could provide affordable alternatives to expensive air services, as demonstrated by successful operations like L’Express-des-Iles connecting Guadeloupe and Dominica. However, regional coordination on port management, operating costs, and regulatory frameworks remains lacking.

5. Focus on Domestic Tourism as Economic Driver

Indonesia has deliberately cultivated domestic tourism as a resilient economic pillar. The surge in domestic travel in 2024 saw 120 percent growth, with Indonesians increasingly exploring their own country’s cultural heritage, natural wonders, and tourist destinations.

Government initiatives like the “10 New Balis” campaign actively promote tourism beyond traditional hotspots, encouraging travelers to discover volcanic lakes in North Sumatra, marine biodiversity in Raja Ampat, and ancient temples in Central Java. This strategy distributes economic benefits more equitably across the archipelago while reducing dependence on international arrivals.

Caribbean tourism strategies remain predominantly outward-facing, targeting leisure travelers from North America and Europe. The market for intra-regional travelers is perceived as small and characterized by low disposable income, despite evidence that improving connectivity could stimulate significant demand. Some Caribbean governments, including Barbados and St. Lucia, have begun reducing travel-related taxes to make regional travel more affordable, but these remain isolated initiatives rather than coordinated regional efforts.

The Economic Impact: Quantifying the Connectivity Dividend

Economic modeling suggests that reducing transport costs in archipelagic regions generates substantial benefits. Research on Indonesia indicates that a modest five percent reduction in road and sea transport costs between regions could yield benefits approaching five percent of GDP, with poverty reduction particularly pronounced in less-connected eastern provinces.

Indonesia’s domestic tourism contributed directly to the nation’s strongest economic growth in two years during the second quarter of 2025. The mobility created by improved connectivity generates multiplier effects extending far beyond tourism, supporting hospitality, retail, transportation, and local services throughout the economy.

The Caribbean Tourism Organization recognizes that enhanced intra-regional connectivity represents a key to unlocking the region’s full potential. Tourist arrivals grew by 6.1 percent in 2023, surpassing pre-pandemic levels, yet high airfare prices and complicated immigration policies continue discouraging frequent island-hopping and inter-island tourism.

Pathways Forward: Actionable Strategies for Caribbean Connectivity

The Caribbean Tourism Organization’s partnership with Airport Strategy & Marketing Ltd. to conduct a comprehensive airlift study by October 2025 marks a pivotal step toward addressing connectivity challenges. This initiative will assess current intra-regional air routes, analyze demand patterns, identify route development opportunities, and design an efficient hub-and-spoke model for the region.

Recent partnerships demonstrate potential for improvement. The interCaribbean Airways and Virgin Atlantic interline agreement enables travelers to book single tickets for multi-leg journeys with baggage checked through to final destinations, using Barbados and Antigua as strategic hubs. This collaboration streamlines previously complicated travel experiences that required multiple bookings and extended layovers.

For meaningful transformation, the Caribbean requires coordinated action across several dimensions. Regional governments must harmonize aviation regulations and customs procedures to reduce bureaucratic barriers. Taxes and fees that disproportionately inflate short-haul ticket prices need restructuring to stimulate demand rather than suppress it.

Investment in alternative transportation modes, particularly high-performance ferry services for shorter routes, could provide affordable options while reducing pressure on air connectivity. Port infrastructure modernization and regional agreements enabling smoother inter-island maritime mobility would support this diversification.

Perhaps most importantly, the region needs a fundamental shift in perspective—viewing intra-Caribbean travel not as a marginal market but as an essential economic development strategy. Cultivating domestic and regional tourism creates resilience against external shocks, distributes benefits more equitably among member states, and strengthens the cultural connections that define Caribbean identity.

The Connectivity Imperative

Indonesia’s transformation into a domestic travel powerhouse demonstrates that geographical challenges inherent to archipelagic regions need not be insurmountable barriers. Through coordinated policy, strategic infrastructure investment, competitive market development, and recognition of regional travel as an economic priority, the country has created a connectivity ecosystem that moves nearly one billion travelers annually while generating substantial economic benefits.

The Caribbean possesses comparable natural assets, cultural richness, and tourism appeal. What differentiates these two regions is not potential but policy execution and regional coordination. As the Caribbean Tourism Organization pursues its airlift study and member states begin implementing targeted improvements, the Indonesian model offers both inspiration and practical blueprints for transformation.

The question facing Caribbean policymakers is whether they can overcome the fragmentation and competitive dynamics that have historically hindered cooperation to build the integrated transportation networks their economies require. With tourism accounting for more than 15 percent of Caribbean GDP—the highest dependence globally—the imperative for improved connectivity extends far beyond convenience to encompass economic survival and regional prosperity.

The path forward requires vision, investment, and unprecedented cooperation among Caribbean nations. Indonesia’s success proves that such transformation is achievable. The Caribbean’s challenge is whether it can summon the political will and strategic coordination to make it reality.

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