Rising Tourism and Business; Foreign Investors Keen on Hotels in Indonesia
With having more than 10,000 islands, Indonesia offers an unique natural scenery. The country contains all sorts of attractive options for tourism, including seas, beaches, mountains and much more. Not surprisingly, tourist arrivals in Indonesia continue to grow. Based on data from Statistics Indonesia (BPS), released in early November 2013, the number of foreign tourist arrivals between January and September 2013 reached 6.41 million, an increase of 8.8 percent from the same period last year.
A logical consequence of the rapidly growing number of tourists in Indonesia is the increasing demand for hotel rooms. According to data from BPS, the hotel occupancy rate (for hotels that range from one star to five stars) stood at an average of 54.11 percent in September 2013. This is 1.27 percentage points higher than the room occupancy rate in September 2012.
Looking at the data it is not surprising that new hotels are popping up. The investors behind these projects not only target tourists but also foreign businessmen. Indonesia, especially this year, was home to several large international events, such as the Asia-Pacific Economic Cooperation (APEC) 2013 in Bali. As Indonesia has experienced continued and robust economic growth in recent years (around 6 percent), increased business activity triggered rising demand for hotel rooms. In combination with the rising trend of tourist arrivals, it has resulted in the growth of new hotel projects in Indonesia.
International hotel operators are coming to Indonesia to expand their businesses. Last week, a top-class hotel operator from Singapore, Meritus, announced that they will operate the Condotel Meritus Seminyak Resort in Bali, an upscale condotel project. Meritus was offered to operate the condotel as they have ample experience being a luxury hotel operator for around 40 years. Construction of the Meritus Seminyak Resort will start in early 2014 and it will be operational by mid-2015. One hundred units are offered to the public. The price per unit will range between IDR 1.5 billion (USD $130,434) and 6 billion (USD $512,739).
Ricky Thomas Wijaya, President Director of PT Bali Seminyak Sejahtera, expressed that by cooperating with Meritus investors can expect their investment to become profitable more quickly. According to calculations, investors can expect a profit in less than six years. During the construction period, the price of the condotel is predicted to increase by about 20 percent.
Besides Meritus, the Langham Hospitality Group also announced its business expansion to Indonesia. The company will cooperate with the Agung Sedayu Group for the construction of the Langham Jakarta hotel, which is their first hotel in Indonesia. This luxury hotel will be located in Jakarta's central business district, and is expected to commence operations in 2017.
Foreign companies consider Jakarta as a city that can not be ignored. Indonesia's capital city is considered to be prospective for the next 10 years to come. Andrew Jessop, Vice President of the Development Langham Hospitality Group, stated that the company considers Indonesia, particularly Jakarta, as the most dynamic market in Southeast Asia. The company will also target a number of other cities in Indonesia as well as the famous island of Bali.
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