Expert’s Voice: Will Jakarta’s new luxury hotels draw international travelers? [Infographic]
A total 86% of Jakarta’s hotel guests are domestic.
With a booming hotel project pipeline in Jakarta, Bill Barnett, Managing Director at C9 Hotelworks, analyzes if international visitors will grace its luxury hotels.
While Jakarta, Indonesia is transforming into an Asian megacity, it has yet to capture a wider international audience of visitors. In 2018, the city’s hotels hosted over 13 million guests, yet 86% were from the domestic segment.
In a newly released report, the Jakarta Hotel Market Review from hospitality consulting group C9 Hotelworks over 2.7 million overseas passengers arrived at the gateway Soekarno-Hatta International Airport last year. Over a 10-year period the compound annual growth rate hit an impressive 7.4 percent.
DOMESTIC MARKET STILL KING
The reality is that Indonesia’s largely domestic economic marketplace remains the key spotlight as public sector infrastructure is playing catch up with ongoing mass transportation developments trying to link the city’s spread of mini-metros.
A key outcome of the domestic feeding frenzy is that Indonesian conglomerates and real estate groups are developing massive integrated mixed-use properties with global luxury operators. A quick name check of the accommodation pipeline features well-known names such as Park Hyatt. Waldorf Astoria, St. Regis, W, Regent and Langham.
While historically the influx of overseas guests are business travelers during peak mid-week periods who leave the city in advance of the weekend. This leaves hotels with the choice of either lower room rates for the domestic market or else empty beds.
TOP HOTEL VISITORS
Jakarta’s international geographic source of business profile has seen the Chinese mainland in the top position since 2015, with a 5-year CAGR of 9%. Rounding out the top 5 are Malaysia, Japan, Singapore and Saudi Arabia. There have been few surprises during the past few years yet two international sporting events, the 2018 Asia and Para Asian games pushed market-wide demand higher.
Looking forward, C9 Hotelworks believes it’s unclear if the new luxury pipeline will dramatically induce the overseas market. Until there are broader economic reforms that will positively impact FDI (foreign direct investment) and improvements in commuting to CBD areas, the domestic segment is likely to remain firmly entrenched in the driver’s seat of Jakarta hotel performance.
To download the full report, click here.
According to the TOPHOTELCONSTRUCTION online database 140 hotel projects are currently in the pipeline in Indonesia:
ABOUT THE AUTHOR
Managing Director at C9 Hotelworks
Globally recognized as a hospitality and tourism advisor, Bill Barnett, Founder and Managing Director of Asia-based C9 Hotelworks, is also a frequent speaker at industry conferences. He has been working in the Asia Pacific region for almost 30 years, considered one of the foremost industry experts in hotel residences sector.
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