Fortune Indonesia are reporting that property consultant Jones Lang LaSalle (JLL) Indonesia projects that the investment volume of the hotel business in Indonesia is expected to reach USD 300-million in 2023.
Julien Naouri, Senior Vice President, Investment Sales Hotels & Hospitality Group JLL Asia Pacific , said this was driven by the recovery of the tourism sector in Indonesia.
“The desire to acquire hotels and resorts in Indonesia is currently growing, with increasing interest from domestic and international investors due to the improving tourism industry and favourable economic conditions,” he said in a media briefing Q4-2022, Wednesday (2/1) .
He predicts that private capital will dominate in hotel acquisitions because buyers view hotel assets as immune to inflation. He continued by saying that until the end of 2022 Indonesia leads in terms of the volume of hotel investment value which totals USD 174-million.
JLL also predicted that by the end of 2022 the number of foreign tourist arrivals in Indonesia’s main cities such as Jakarta and Bali will have exceeded 2021 figures.
The performance of luxury hotels has also continued to improve, reaching levels close to pre-pandemic times, particularly in Bali, where in terms of ADR ( Average Daily Rate) for luxury hotels, it has grown significantly beyond 2019, and offset relatively low occupancy rates, say Fortune Indonesia.
“Jakarta can still count on strong demand from domestic tourists while waiting for the arrival of foreign corporate tourists,” said Naouri.
Up until the end of 2022, two hotels opened; mid-range hotel Artotel Casa Kuningan, and luxury hotel St Regis Jakarta. Thus, the supply of hotel space in Jakarta has also increased to 58,105.
Naouri stated that the G20 event had a positive impact on the hotel business, not only in the hospitality aspect, but also in related industries such as food & beverage and retail.
In addition, he also said that the increase in revenue per available room (RevPAR) in December was mainly driven by a significant increase in the occupancy rate. Meanwhile, the average daily rate continues to improve, say Fortune Indonesia.
“On a monthly basis RevPAR is experiencing the same conditions as in 2019, even 14-percent higher in December 2022,” he said.
In December 2022, the occupancy rate of luxury hotels in Bali continued to recover, reaching 92-percent in the same month before the COVID-19 pandemic.
With international visitors continuing to arrive throughout 2022 and increased air transport, Bali is expected to welcome 4-million foreign tourists in 2023.
“Hotel occupancy will continue to increase. It is certainly possible to significantly surpass 2019 levels in the same period,” he said.
In Q4/ 2022, no new hotels have been completed in Bali. But in the next three years there will be around 2,000-additional hotel rooms. The total hotel space on the Island of the Gods is currently 44,906.
Source: Fortune Indonesia
