Indonesia’s Hospitality Industry Has Not Recovered. The Occupancy Is Low

hospitality industry
hospitality industry

Several industrial sectors in Indonesia are showing recovery signs. Unfortunately, the hospitality industry has not yet entered the recovery phase. This was confirmed by the Secretary General of the Indonesian Hotel & Restaurant Association (PHRI) Maulana Yusran.

Maulana was quoted on Thursday (28/7/2022), as saying, “Indeed there has been an increase in traffic since the easing of activities during the Covid-19 pandemic. However, it can’t be called a recovery phase. It’s just on the way to recovery. Due to the pandemic, the hotel business has suffered a deep crisis. , recovery is not as easy as imagined.”

Several obstacles are still hampering the movement of hospitality business players so efforts toward recovery have stalled. As a result, said Maulana, even though there is an increase in traffic or the movement of economic activity, the occupancy is still below 50 percent.

According to Maulana, the average hotel occupancy rate is currently around 40% nationally. This is far below 2019 which was also only 52% of the national average.

This figure also decreased compared to the national average occupancy in 2018 which reached 55%. In 2023, the hotel occupancy rate is expected to increase by 7-8% from this year

“Because in 2019 our position is also not better. At that time there was also the issue of ticket prices. This shows that this industry is very dependent on domestic movements, air transportation is the focus,” he said.

With current conditions, Maulana predicts, the domestic hospitality industry can only be in a perfect recovery phase in 2025.

“Now we are facing obstacles, starting from rising prices, including gas and electricity. When we are still in a state of shock, rising prices will certainly disrupt cash flow. So it falters,” he said.

Not to mention, he added, the increase in activity traffic has led to a misunderstanding that the domestic hotel sector has improved. This, he said, had an impact on the treatment of banks, which considered the hotel’s financial flows to be normal.

“Therefore, we ask the OJK Regulation regarding the relaxation deadline for credit restructuring to be extended. The plan is until next year, we ask for it to be until 2025. We also hope that there will be ease of interest rates and easy access to additional working capital,” said Maulana.

Additional working capital, he said, is needed to restart the business cycle so that it can immediately enter the recovery phase.

“To restart the business, we hope that issues related to the movement of people, such as airplanes, can have a solution. Because they are the backbone of the hotel industry,” said Maulana.

He admitted that he had submitted a request from the hotel business to the Ministry of Tourism.

“That way the recovery room will be more wide open and can start stably,” concluded Maulana.