The events which followed the step-down of president Suharto combined to kill off the country's inbound traffic, particularly from Europe and the United States, where the mere whiff of political unrest sends travellers running for cover.
Student demonstrations, race riots, and turmoil surrounding the referendum in East Timor impacted hard on Indonesia's beleaguered travel industry.
The only area to survive was Bali but this honeymoon came to an end in the aftermath of the East Timor referendum, when the Australians - the island's largest source of visitors - virtually blacklisted the place.
The Tourism Indonesia Mart (TIME), held in Jakarta in September, was almost the final straw when the event was forced to close a day early due to riots in Jakarta.
The incident was almost symbolic of what had been happening to the industry for a year previously. Every time it tried to pick itself up, along came another incident to scupper its well-laid plans. It is therefore good news that peace has been restored to the country following the recent elections, and that it can set about restoring its reputation. The calming influence of President Abdurrahman Wahid and Vice-president Megawati Sukarnoputri should provide a well-needed fillip to the country's tourism fortunes.
Further good news comes in the form of the announcement that the old State Ministry of Tourism, Arts and Culture will be replaced with State Ministry of Tourism and Arts.
The industry has been lobbying hard for its own ministry - befitting its status as the fourth largest foreign currency earner in Indonesia - and while tourism is still lumped together with arts, it will nevertheless be a far more focused outfit.
The new minister for arts and tourism, Hidayat Jaelani, has already stated that the department will actively promote tourism internationally.
With a relative calm having surrounded Indonesia, the travel industry has much to look forward to. New measures being implemented under the new leadership will give the travel industry a much-needed boost.