Hospitality Industry Faces Uneven Recovery Despite Rising Occupancy Rates

hospitality industry
hospitality industry

Despite signs of recovery in various sectors post-Covid-19, the hospitality industry in Indonesia is still grappling with the aftermath of the pandemic. Although there is an upward trend in occupancy rates, the industry hasn’t fully bounced back.

As of 2023, the average hotel occupancy rate has reached 50%, according to Maulana Yusran, the Secretary-General of the Indonesian Hotel and Restaurant Association (PHRI). However, this recovery is not uniform across all regions.

Yusran pointed out, “Upon closer examination, it turns out that only 9 provinces have occupancy rates above 50%. This means that not all regions have experienced recovery,” highlighting the uneven nature of the industry’s resurgence.

The disparity in occupancy rates is attributed to the uneven movement of both foreign tourists (wisman) and domestic tourists (wisnus), influenced by various factors like road infrastructure, expensive airfares, and the organization of events in specific regions.

For instance, the government’s current emphasis on developing the Nusantara Capital City (IKN) has positively impacted hotel occupancy in the IKN area, where various activities are taking place.

Conversely, regions with fewer organized events tend to experience minimal hotel occupancy, leading to a direct impact on room prices. On this note, Yusran noted that average room prices have seen a decline of around 25-30%.

“If we say it’s recovered, it hasn’t fully recovered. Only a few areas may have seen a recovery in the business industry,” Yusran expressed, emphasizing the need for a more widespread and sustained recovery.

Addin Maulana, a researcher at the National Research and Innovation Agency (BRIN), echoed this sentiment, highlighting that the hospitality industry is still grappling with the consequences of the Covid-19 pandemic. According to data, average hotel room prices have significantly dropped by 19% compared to 2021.

“The challenge for accommodation service providers is the significant decrease in the average selling prices of rooms by 19%,” Addin emphasized during a recent webinar, shedding light on the hurdles faced by the industry in its path to recovery.