Indonesia has to boost hotel supply by 50 per cent

INDONESIA will need 800 new hotels or 100,000 more rooms within the next decade in order to keep pace with the projected growth of domestic and international tourists to the country.

Speaking during the first Indonesia Hospitality & Tourism Investment Conference, HVS China and South-east Asia chairman, David Ling, said: “Last year, the number of domestic movements was 245 million. Assuming that the growth of the market is four per cent in the next 10 years, there will be around 400 million trips a year.”

According to Statistics Indonesia data, there are currently 1,623 hotels or 155,000 rooms in the major provinces of Jakarta, West Java, Central Java, East Java and Bali. By 2023, 256,000 rooms will be required, Ling projected.

This represents a tremendous opportunity for developers, investors, hotel management groups, airlines, travel companies  and other stakeholders, Ling pointed out. “New hotel developments, in economy to luxury sectors, are required to cater to the anticipated increase in demand for hotel accommodation.”

Indonesia’s minister of tourism and creative economy, Mari Elka Pangestu, said: “We have set a focus on 16 destinations (TTG Asia e-Daily, September 28, 2012) in the country for development and these are open for (the trade) to invest in.”

“In fact, we have seen hotel investment flowing beyond Java and Bali, especially into eastern Indonesia where the resources and commodity businesses, such as palm oil and coal, are growing. Hotels in these areas are even equipped with meeting facilities to cater to the demand for these businesses.”

Many panellists and speakers at the conference raised the lack of infrastructure as one of the challenges in developing properties in Indonesia, a problem Pangestu herself has acknowledged.

The minister said transportation and connectivity development was a major focus of Indonesia’s economic development plan, with 12 new and upgraded airports to open this year and 24 new airports to open up to 2015.

Meanwhile, road construction, railway and port development are also underway.

Sourced: ttgasia