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Growth in travel fuels hotel boom in Indonesia

Publication Date : 26-12-2012

 

Indonesia is set for the biggest boom in its hotel sector to date as growing business and leisure travellers have boosted demand.

The Indonesian Hotel and Restaurant Association (PHRI) has estimated a more than three-fold jump in the number of new hotel rooms available in the market next year.

PHRI chairwoman Wuryanti Sukamdani said recently that around 50,000 new rooms were expected to be available across the archipelago next year, up from the usual 15,000 rooms added annually.

“Around 80 per cent of the rooms are from budget-class hotels,” Wuryanti said. “Robust growth is expected next year, particularly from the budget hotel segment, and the two- and three-star classes. The growing middle class and the expansion of budget airlines have encouraged more people to travel,” she said.

New hotels are even expected to enter second-tier cities in eastern Indonesia, such as Luwuk in Central Sulawesi.

“The four-star and five-star classes are also going to continue to grow, particularly in Bali, because of upcoming major events, including the Apec [Asia-Pacific Economic Cooperation] and Miss World 2013.”

According to the PHRI, almost 15,000 new hotel rooms entered the market this year, adding to the supply of around 240,000 rooms.

In Jakarta alone, the new supply of three-star to five-star accommodation throughout 2013 will be about 2,000 rooms, according to property consultant Cushman & Wakefield Indonesia.

Cushman’s head of research and advisory services, Arief Rahardjo, said the figure was very high given the fact that average new supply in the capital over the past 10 years was only about 550 rooms annually.

“High demand for budget accommodations is pushing hotel operators to consider more economic hotels,” Arief said.

Contacted separately, Aston International vice president for sales and marketing Norbert Vas said that the company planned to open 44 new hotels in the country next year, mostly in the economy class.

“We will also introduce our first two-star plus brand Hotel Neo in Legian [Bali] which will then be followed by seven more in Seminyak [Bali], Jakarta, Bandung [West Java], Yogyakarta, Makassar [South Sulawesi], Surabaya [East Java] and Palangkaraya [Central Kalimantan],” Norbert said.

Under its two-star hotel brand, the Favehotels, Aston plans to operate 10 more hotels next year in Balikpapan, East Kalimantan; Bandar Lampung, Lampung; Kupang, East Nusa Tenggara; Kendari, Southeast Sulawesi; Palembang, South Sumatra; and Pekanbaru, Riau.

Newcomer Tauzia Hotel Management, the operator of four-star Harris Hotel and two-star POP! Hotel, is scheduled to operate 12 new hotels in 2013.

Corporate spokesperson Yani Sinulingga said that most of the new hotels are set to operate in Bali — one of the world’s most popular tourist destinations.

“For Harris Hotel alone, we are going to open the brand in three different locations [in Bali]: Bukit Jimbaran, Kuta Galeria, and Raya Kuta,” Yani said.

In addition, the firm’s POP! Hotel is set to enter several places such as Tebet, South Jakarta; BSD City, Banten; Lampung and the country’s main gateway — Soekarno-Hatta International Airport.

As of today, the company runs 16 hotels in Java, Bali, and Sumatra with an occupancy rate of 70 to 80 per cent in each hotel, according to Yani.

Heavy investments are also being made in four- and five-star hotels. For instance, the Accor Group of hotels is planning to nearly double the number of its hotels to more than 100 in the next two or three years, according to the Tourism and Creative Economy Ministry.

 

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