Tourism investment: Hotel investors still eyeing Jakarta and Bali
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Bisnis Indonesia - Investasi pariwisata: Pemodal hotel tetap lirik Jakarta dan Bali
26 July 2023
By: Ni Luh Anggela
Jakarta - The hotel business in Jakarta and Bali is still an investment field for investors this year, following the operation of eight new hotels in both destinations.
Jones Lang LaSalle (JLL) Hotels and Hospitality Group Asia Pacific Senior Vice President and Investment Sales Julien Naouri said that investors were still confident about the situation of hotels in Indonesia. Until the end of this year, six new hotels will be ready to operate in Bali and two new hotels will be ready to operate in Jakarta.
He said that the two new hotels that would operate in Jakarta at the end of 2023 were Swiss-Belhotel Kelapa Gading with 316 rooms and Movenpick Jakarta Pecenongan with 253 rooms.
Specifically in Bali, he added that there were six hotels that were scheduled to operate at the end of 2023, which would add 555 new rooms in the hotel market in the Island of the Gods.
“Hotel sales emphasise that investment activities in Indonesia are recovering, so hotel cashflow will also continue to recover,” he said at JLL Indonesia’s media briefing that was broadcasted online on Tuesday (25/7).
On the other hand, he revealed that there were two large transactions in Indonesia in the first half of 2023, namely Pullman Central Jakarta and Mandarin Oriental Jakarta that were part of the hotel portfolio transactions in early July 2023.
According to him, JLL, which is a property consultant, logged that the revenue per available room (RevPAR) of luxury hotels in Jakarta and Bali continued to increase.
Julien said that the RevPAR of luxury hotels in Jakarta approached Rp1.4 million in June 2023 with a dominating average daily rate (ADR).
“The growth of international tourists in Jakarta in the first half of 2023 increased the RevPAR of luxury [hotels] to surpass the RevPAR before the pandemic, which was sustained by the significant increase in the ADR that reached 9.9% in 2019,” he explained.
Julien revealed that Jakarta welcomed 158,700 international tourists throughout May 2023, which for the first time surpassed the realisation before the Covid-19 pandemic. As many as 642,000 international tourists visited Jakarta in the first half of 2023.
He added that the RevPAR in Bali also increased. The recovery of international tourists in the first half of 2023 revived luxury hotels in Bali. The RevPAR increased by 21.4% compared to the pre-pandemic realisation that was supported by a high ADR.
From January to May 2023, more than 1.87 million international tourists visited Bali, which reached 81% of the number of international tourists before the Covid-19 pandemic. However, Julien mentioned that tourism in Bali was still left behind by Jakarta even though it showed signs of recovery.
“Due to the large portion of international tourists in Bali, the challenge of the flight traffic capacity continues. Tourism recovery in Bali is still left behind by Jakarta,” he stated.
In the report from the Investment Coordinating Board (BKPM) in the second quarter of 2023, the hotel and restaurant sector was quite brilliant.
From January to June 2023, investment in the hotel and restaurant sector reached Rp18 trillion.
Domestic investment in the hotel and restaurant sector reaches Rp11.01 trillion for 9,224 projects. This realisation is the twelfth largest domestic investment among the various sectors in Indonesia.
Regarding foreign direct investment, the realisation in the hotel and restaurant sector reaches US$507.3 million or Rp7.5 trillion for 4,598 projects.
Political year
On a separate occasion, Sahid Hotels Business Development and Digital Marketing Corporate Assistant Manager Andi Anggreni predicts that the political year will benefit the hotel and restaurant sector.
He is targeting the occupancy of hotels in Sahid Group to surpass 60% in the political year.
“Our target is to surpass 60%. It will be better if we can reach 70%,” he said last weekend.
For the second half of 2023, Andien said that he did not revise the budget too much as hotel demand for political activities and meetings would increase rapidly approaching the political year.
According to him, Sahid Hotel has prepared a strategy to welcome the political year. For example, he mentioned that Sahid Hotels would cooperate with parties that require bedrooms or meeting rooms to prepare for their political activities.
On the other hand, the average occupancy of Sahid Hotels’ hotels reaches around 50% to 65% after the Covid-19 pandemic.
He affirmed that the occupancy reached 65% thanks to the long holiday in June.
“In general, [the occupancy] reaches 50%-65%, especially during long weekends,” he said.
For hotels in resort areas that are located in tourism destinations, the occupancy reaches around 70% to 80%. Resorts with high occupancy are generally located in Jakarta, Pangandaran, Yogyakarta, Solo, Kendari, and Batam.
Andien also emphasised that the service trend was shifting. Sahid Hotels is now offering a complete package for visitors, not only to stay the night but also to participate in recreational activities.
According to him, Sahid Hotels is ready to offer various activities, such as watching movies for children, cooking classes, swimming classes, and other interesting activities.
Recently, Sahid Group is developing a business in the food and beverage sector by opening Le Manah Café in Puncak Leuwiliang Bogor, West Java.
Le Manah Café is a part of Adiroso Managed by Sahid. It is a hotel that is built on top of 72 hectares of land that has various facilities, such as a swimming pool, a ballroom, a deer park, a fishing spot, and other facilities.
