Jakarta: Hotel


International visitor arrivals to Jakarta via the Soekarno-Hatta International Airport (SHIA) edged up 1.3% from the previous year to 1.9 million as at YTD October 2014. The slower growth was due to the presidential elections which took place earlier in the year. Amongst the major source markets, Saudi Arabia registered the highest growth with a 29.7% y-o-y increase. Stronger promotional efforts by the government to boost Shari’ah tourism have prompted a significant increase in visitor arrivals from Middle Eastern countries.

Starting in January 2015, the introduction of a visa exemption policy for five major source markets, including Australia, Mainland China, Japan, South Korea and Russia, will further boost the tourism market as Jakarta remains the key international gateway to the country. The anticipated growth in tourism and corporate travel demand will also benefit from further infrastructure investment and ongoing airport expansion.


There were no new hotel openings in 4Q14. New hotel developments that were originally planned for opening in 4Q14 have been delayed to 2015, and they are predominantly in the economy and midscale segments. As at end-2014, Jakarta’s accommodation market comprised approximately 32,372 rooms, signifying an 8.4% increase from the previous year. Midscale and economy hotel brands such as Ibis, Holiday Inn Express, DoubleTree by Hilton, Best Western and Mercure opened in 2014. There were no new upscale and luxury hotel openings in 2014.

Asset Performance

As at YTD November 2014, occupancy declined by 1.7 percentage points to 64.5% while Average Daily Rates (ADR) fell 1.7% y-o-y to USD 182. The decline in ADR in US Dollar terms can be attributed to the depreciation of the Indonesian Rupiah. Comparatively, ADR showed a significant improvement of 11.6% y-o-y to IDR 2.2 million resulting in Revenue per Available Room (RevPAR) growth of 8.8% to IDR 1.4 million. In terms of moving annual average, RevPAR levels have been relatively stable, achieving levels above USD 115 in the twelve months ending November 2014.

12-Month Outlook

Although Jakarta and Indonesia experienced a volatile season in 1H14 due to the presidential elections and a significant depreciation of the Indonesian Rupiah, the economy has exhibited resilience on the back of a robust domestic demand base. The outlook for 2015 is relatively positive with projected growth in investments and exports ahead, even as new President Joko Widodo attempts to introduce economic reforms across the country.

The government recently proposed plans to restrict lavish spending on hospitality by government officials, which will directly impact the hotel industry nationwide, particularly the luxury and upscale segments. Jakarta, being the capital city, is likely to be most adversely affected. In light of uncertainties arising from the new measures and the influx of new supply in 2015, we expect hotel trading performance in Jakarta to be volatile in the short term. Nevertheless, Indonesia remains one of the largest economies in the world with a favourable demographic situation, and with Jakarta being the main hub of the country, it is likely to record faster GDP growth compared to the rest of the country, and this will directly benefit trading performance in the long term.

Note: Jakarta Hotels refers to Jakarta’s Upscale hotel market.