Jakarta’s Hotel Industry Set to Flourish with the Arrival of Seven New Establishments

Hotel industry (photo: Marten Bjork - Unsplash)

The government’s recent decision to relax restrictions on community activities has had a notable impact on various business sectors, one of which is the hotel industry. As a result, the city of DKI Jakarta is poised to witness the emergence of seven new hotels within the time frame of 2023 to 2025.

Following a temporary halt during the Covid-19 pandemic, the construction of several new hotels in Jakarta has resumed, buoyed by the gradual recovery of the tourism sector throughout the country.

The positive development in the hotel industry is reinforced by data from Colliers Indonesia, which reveals that the first quarter of 2023 saw a total room supply of 44,685. Furthermore, it is estimated that an additional 638 hotel rooms will be built by the end of 2023, with a predominant focus on the establishment of five-star hotels.

Ferry Salanto, Head of Research at Colliers Indonesia, reported that although the occupancy rate for hotels in Jakarta experienced a 4.2% decline from the previous quarter, resting at 57.1% during the same period, there was a notable 11.8% increase in room rental prices, reaching an average of $63.3 per night.

In analyzing the current state of the Jakarta hotel market, Ferry emphasized the presence of business activities, particularly those associated with MICE (Meetings, Incentives, Conferences & Exhibitions) accommodations.

Anticipating the upcoming political events in 2024, such as parliamentary and presidential elections, the hospitality sector is poised to receive a significant boost. Hotels often serve as key venues for election-related preparations, contributing to increased demand and activity within the industry. However, it is currently observed that there is a relatively limited number of election-related activities scheduled for the early months of 2023.

Post the Eid al-Fitr holiday, it is anticipated that the level of activity in hotels, especially in relation to MICE events, will experience an upsurge. This heightened demand for hotel rooms has prompted many hotel operators to resume their construction projects to meet the anticipated needs of their guests. Throughout the pandemic, there has been a noticeable decline in the number of new hotel rooms entering the market in Jakarta.

Ferry also highlighted that certain hotel operators took advantage of the pandemic-induced lull to undertake renovation projects, either temporarily closing specific sections of their hotels or executing comprehensive renovations. This strategic move was motivated by their intent to attract new operators through enhanced aesthetics and upgraded management practices, ultimately aiming to allure a larger customer base.

Looking ahead, the hotel landscape in Jakarta promises to undergo a transformative shift with the introduction of these seven new establishments by 2025.

Among the forthcoming additions are the Sam Ratulangi Menteng Boutique Hotel, situated in Menteng, Central Jakarta, boasting 120 rooms, Fairfield Slipi in West Jakarta featuring 250 rooms, and the Park Royal Hotel in MH Thamrin, Central Jakarta, set to accommodate 171 rooms. Additionally, the Veranda Puri 2 in Puri Kembangan, West Jakarta, is anticipated to offer 180 rooms, while the Movenpick Jakarta Pecenongan in Central Jakarta will boast 253 rooms. Furthermore, the Pan Pacific Jakarta, nestled within the bustling CBD of MH Thamrin, is expected to feature 157 rooms, while the Waldorf Astoria, also located in MH Thamrin, will offer a luxurious experience with its 183 rooms.

As the hotel industry in Jakarta expands with these upcoming additions, it is anticipated that the city’s tourism landscape will continue to thrive, offering both local and international visitors an array of options to suit their accommodation preferences.