Three domestic operators - Santika Hotel Group, Tauzia Hotel and Dafam Hotel - will add a total of 140 hotels up to 2015. Meanwhile foreign operator Carlson Rezidor together with its partner Panorama Group will invest in the construction of 20 new hotels in Indonesia between now and seven years. Four of these hotels, located in Lampung (Sumatra), Bali, Makassar (Sulawesi) and Bandung (Java), will be ready for operation by the end of this year.

Other foreign investors include Aston International, which already owns 76 hotels in Indonesia and plans to open 150 more in the next four years, as well as the Accor Group, which currently runs 70 hotels in Indonesia but aims to increase this number to 100 by 2015.

The hospitality industry of Indonesia is booming, evidenced by the steadily increasing number of tourists each year. Moreover, expansion of Indonesia's low-cost carrier segment is also partly responsible for the increase because more and more people - both domestic and foreign (particularly from the Asia Pacific region - can afford to fly. The hospitality sector of Indonesia is expected to continue its impressive growth up to 2020.

Earlier this week, Statistics Indonesia announced that foreign tourist arrivals in Indonesia rose 3.57 percent (year-on-year) to 702,666 in February 2014 despite several natural disasters that plagued the country (floods and volcano eruptions). In the first two months of 2014, Indonesia welcomed 1,455,745 foreign tourists, a 12.6 percentage growth from the same period last year. Pangestu is content with this growth and is optimistic that the country's target of 9.3 to 9.4 million foreign tourists in 2014 can be achieved.

Factors that contributed to the strong visitor growth in 2014 are more seat capacity on flights to Indonesia, particularly those flights from the Middle East and China, as well as several world-class events that were held in Jakarta in February (Java Jazz Festival and Indonesia Fashion Week).

Foreign Tourist Arrivals in 2013-2014:

Month  Tourist Arrivals
 Tourist Arrivals
January        614,328        753,079
February        678,415        702,666
March        725,316  
April        646,117  
May        700,708  
June        789,594  
July        717,784  
August        771,009  
September        770,878  
October        719,900  
November        807,422  
December        766,966  
Total       8,802,129       1,455,745

Foreign Tourists Arrivals 2007-2014:

    2007   2008   2009   2010   2011   2012   2013   2014¹
Foreign Tourists
(in millions)
  5.51   6.23   6.32   7.00   7.65   8.04    8.80    9.3

¹ indicates government target
Source: Statistics Indonesia (BPS)