Hospitality industry: Relaxation brings fortune
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 - Industri perhotelan: Relaksasi membawa berkah
27 April 2022
By: Faustina Prima
The government’s policy to relax the restriction on people’s mobility is boosting the tourism sector. The hospitality sector is also benefitting from the relaxation.
President Joko Widodo decided to permit homecoming activities during Eid this year with the condition that the travellers have received complete vaccination, which strengthens the hospitality business.
Hotel room bookings in several hotels with star ratings increased during Eid holiday. Moreover, hotels with star ratings in homecoming regions needed to reject new bookings as the rooms have been booked during that period.
One of the hotels that reported an increase in room bookings during Eid holiday is Ascott Sudirman Jakarta. Ascott Sudirman Jakarta Guest Service Officer Baqir Fairuz Abadi said that the hotel’s occupancy surged approaching Eid this year.
“From 2 to 3 May 2022, hotel rooms are almost fully booked,” he said to Bisnis on Tuesday (26/4).
He forecasts that occupancy will continue to increase until the end of this year. Generally, hotel room bookings increase during national and long holidays.
Jakarta Indonesian Hotel and Restaurant Association (PHRI) BPD Chairperson Sutrisno said that hotel occupancy that tend to decrease during Ramadhan would increase during Eid holiday.
“During Ramadhan, hotel occupancy decreased, but during the 7 days of Eid holiday, hotel occupancy in Jakarta will increase by around 20%-30%,” Sutrisno stated.
He forecasts hotel occupancy in Jakarta will surge in October through December this year.
For hotel business, the highest occupancy will occur from October to December as there are many people who need to finish their work by the end of the year.
“Meanwhile, [occupancy of] family hotels will surge in December during year-end holidays,” Sutrisno explained.
Despite the increase in hotel occupancy in Jakarta, the average daily revenue does not follow suit.
According to him, discounts and online promotions are implemented by hotel players to increase occupancy.
Sutrisno suggests that the government must support hotel players in promotions to attract consumers.
“Besides that, the government must also allow people to carry out activities in hotels,” Sutrisno affirmed.
PHRI Chairperson Hariyadi Sukamdani stated that the hospitality sector would start to recover in 2022.
He is also optimistic about hotel occupancy growing in 2022.
“Nationally, [hotel] occupancy reaches around 250,000 rooms,” Hariyadi stated.
In the first quarter of 2021, national hotel occupancy only reached 20%. This year, national hotel occupancy increased to 30%-35%.
Hariyadi mentioned that the largest contributors to hotel occupancy in the first quarter of 2022 were Bogor and Cirebon with an occupancy rate of 70%.
In tourism destinations such as Bali, occupancy will also increase during Eid holiday.
Bali PHRI Chairperson I Gusti Rai Suryawijaya believes that domestic tourist visits will increase during Eid holiday.
“For seven days during Eid holidays, hotel occupancy will increase. [The occupancy] will be dominated by domestic tourists,” Surya explained.
Usually, domestic tourists choose budget hotels, so hotel occupancy of said hotels will increase during Eid.
Unlike international tourists who choose hotels with star ratings or villas.
Surya predicts that the surge in hotel occupancy in Bali will increase in the middle of the year when international tourists come to Bali, and it will continue until the end of the year.
“Next, [hotel occupancy] will experience another increase in November thanks to the G20 Summit in Bali,” Surya stated.
To increase hotel occupancy, he suggests that the government have to accelerate tourism recovery in Bali through visa facilitations for international tourists.
He is targeting 5,000 international tourist visits per day by the end of the year. He also hopes that countries that can receive visa on arrival can be expanded. “If needed, no visa required can be implemented for 169 countries,” he said.
The same as hotels in Jakarta and Bali, hotels in Sumatra, especially hotels in Riau Islands Province, also benefit from Eid holidays.
International tourists
Riau Islands PHRI Chairperson Yeyen Heryawan stated that hotel occupancy would increase by 35% during Eid homecoming, dominated by Batam.
Despite the increase in occupancy, Yeyen explained that the occupancy rate had not reached the condition before the Covid-19 pandemic.
“Until now, occupancy has not reached the pre-Covid-19 level. There is an increase, but it is not significant,” Yeyen explained.
He added that promotions during Ramadhan increased hotel visits in Riau Islands Province.
Approaching Eid, Yeyen continued that resorts would have higher occupancy than city hotels intended for MICE (Meetings, Incentives, Conferences, and Exhibitions) and business.
Hence, several hotels have implemented promotions to attract consumers.
If domestic tourists dominate hotel occupancy approaching Eid holidays, hotels that target international tourists will still be lacking consumers.
Hotel with star ratings in Jakarta, Bali, and Riau Islands are still struggling due to the Covid-19 pandemic.
For example, Sutrisno stated that tourists from China have yet to contribute to the hotel occupancy in Jakarta until the first quarter of 2022.
“The lockdown in China is causing Chinese tourists to be unable to travel to Indonesia, especially to Jakarta,” he stated.
The same is also being experienced by Bali with international tourists decreasing due to the Covid-19 pandemic. “International tourist visits currently reach 2,000 people per day, which is still far below the pre-pandemic level that reached 10,000 people per day,” Surya stated.
