Healthy hotel pipeline offers hope in Indonesia’s tourism recovery

by | 22 Nov 2022 | Pipeline

Pictured: rendering of Swiss-Belhotel Airport Yogyakarta.

Indonesia will be able to rely on a growing high end hotel pipeline as it seeks to recover its tourism industry after the ravages of the pandemic.

With tourism a main source of income for the southeast Asian country, its government is instituting a number of measures to boost the sector.

Tourism targets

During the recent G20 summit held in Bali, Indonesia’s minister of tourism and creative economy, Sandiaga Salahuddin Uno, spoke to CNBC, revealing: “Our tourism is very much linked to how we handle the pandemic. So far, within domestic tourism, which is now the backbone of our tourism, we are closing in on about $1 billion of additional revenues from domestic tourists.

“In terms of foreign tourist arrivals, we’re at 70% of our upper limit targets – we’re targeting 3.6 million for 2022 we’re now at 2.4 million.”

Visa initiative

Since February 2022, Indonesia reopened its doors to foreign visitors. Initiatives to boost the tourism sector include a Special Tourist Visa on Arrival for 86 countries, visa-free for ASEAN countries, second-home visa, and exempting PCR tests for healthy travellers and quarantine for fully vaccinated travellers.

To further boost international tourism, Uno outlined: “We’re expanding the number of countries able to use electronic visas on arrivals. So this will add about 500,000 new tourist arrivals in the next three months and we’ll be hoping that by the end of the year we’ll be able to break our upper limit target of 3.6 million.

“Indonesia hopes to welcome 3.5 to 7.4 million foreign visitors in 2023. For international visitors fitting the requirements, a second-home visa valid for five to 10 years can be a door for a niche market.”

Nevertheless, he acknowledged: “We’re only at 25% of pre-covid numbers; this is going to be a long journey before we recover. We’re not going to see a pre-covid numbers until 2025.”

Hotel hike

One element that could help this long recovery is a growing high end hotel pipeline in the country. When we last looked at Indonesia’s planned projects in the TOPHOTELPROJECTS database 12 months ago, there were 120 entries comprising 21,847 keys. This year those figures have increased by 12% and 8% respectively, to 134 sites totalling 23,520 rooms.

The premium pipeline will peak in 2023, with 23% of sites, totalling 43 projects, due to be delivered. 2025 comes runner up with 13%/17 hotels, with opening rates dipping slightly in 2024 to 11 properties equating to 8% of high end developments. The same amount is due to deliver in the remainder of this year, while the rest of the hotels (52 entries) will either appear in 2026 and beyond or have yet to receive an end date.

Segment and cities

In terms of segments, four star sites form the vast majority, comprising 89 hotels/66% of the total. The other 34%/45 hotels are five star luxury builds.

Geographically, capital city Jakarta is the leader for hotel development, with 22 sites underway, while popular island of Bali comes a close second, on 17 projects. West Javan province capital Bandung makes the podium with seven builds.

Brands and plans

The Ascott brand Harris Hotels is the top name for high end Indonesian hotel projects currently, with 25 underway. A distant runner-up is Swiss-Belhotel International Hotels & Resorts, on six sites. Sharing third place are Archipelago International’s Aston and another The Ascott marque, Preference Hotels, with five apiece.

One of the many Harris Hotels is Harris Resort Garut, which is slated to complete in 2026. This is envisaged to be a popular gateway destination for staycations and out-of-city conventions. Harris Resort Garut will offer 135 rooms as well as facilities such as a ballroom, a gymnasium, a lounge, a restaurant and a swimming pool.

And part of the Swiss-Belhotel stable, the imminently-opening Swiss-Belhotel Airport Yogyakarta will have 167 rooms and a range of international standard facilities and services. These will include a ballroom and meeting rooms with modern meeting facilities, an all-day dining restaurant with indoor and outdoor sitting options, in-room dining, a rooftop swimming pool and a gym.

Many TOPHOTELNEWS articles draw on exclusive information from the TOPHOTELPROJECTS construction database. This subscription-based product includes details of thousands of hotel projects around the world, along with the key decision-makers behind them. Please note, our data may differ from records held by other organisations. Generally, the database focuses on four- and five-star schemes of significant scale; tracks projects in either the vision, pre-planning, planning, under-construction, pre-opening or newly opened phase; and covers newbuilds, extensions, refurbishments and conversions.

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