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Room for more Rooms?

Soaring Hotel Investment in Indonesia

(12/9/2012) The Indonesian Hotel and Restaurant Association (PHRI) has recorded US$800 million in new hotel investments in 2012, an increase of 229.2% over 20122 when US$243 million in new hotels were built.

The chairperson of PHRI, Wiryanti (Yanti) Sukamdani told Bisnis.com that the high rate of new investment underlines the currently bright prospect of the hotel business in Indonesia.

Budget and three star hotels, a trend expected to continue through 2013, have dominated investment in new hotels in 2012.

PHRI counts 13,000 hotels nationwide hosting 240,000 rooms. That number is expected to increase between 10-20% in 2013.

Yanti warns that her association is counseling caution in the future to avoid problems of oversupply in the hotel market. While she sees many areas of Indonesia as still in dire need of more hotel rooms, locations such as Jakarta and Bali are operating at capacity levels. For this reason, PHRI is urging the government to work together with their association in deciding whether or not to grant permits for new hotel projects. The organization of hotels and restaurants is also lobbying that all new accommodation projects become members of PHRI before actual construction begins.

The National Bureau of Statistics (BPS) recorded average hotel occupancy of 54.90% nationwide in October 2012, an increase from the 54.87% recorded in the same month one year before. The highest occupancy levels in October were recorded in Bali (65.80%), followed by Lampung, South Sumatra (65.80%) and Yogyakarta (62.43%).