In an effort to replace oil revenues, Indonesia has accorded internationall tourism high priority in ist development plans. International tourist arrival have expanded and continue to increase rapidlyas Indonesia has taken advantage of the growing world and, particularly, Asian tourist market. Domestic tourism is also growing. The opportunities and challenges faced by the Indonesian tourist industry are addresed and it is concluded that Indonesian tourism has a bright future. However, care must be taken to match emerging products with stable markets of adequate size. This requires more sophisticated market intelligence than is currently available.