Domestic guests remain a key driver for star-rated hotels, with divergent preferences between local and foreign guests

• As of YTD February 2025, the Jakarta hotel market remained heavily reliant on domestic tourism, with local guests accounting for 90.3% of the total in star-rated hotels. Domestic guests in Jakarta predominantly chose three-star hotels, where foreign guests continue to prefer five-star hotels.
• Jakarta’s hotel market experienced a decline in trading performance. Despite a y-o-y high-single-digit increase in ADR, the double-digit percentage-point decline in occupancy levels more than negated the strong ADR growth, resulting in an overall decrease in RevPAR.

No new openings in Q1 2025

• As of YTD March 2025, Jakarta has not seen any new hotel openings. However, the city’s hotel and hospitality sector is poised for growth this year, driven by serviced apartments.
• Most of the upcoming openings for 2025 will be situated within Central Jakarta, and mostly driven by upscale and luxury openings. Notable openings include the Okura Residences and Hotel Okura, PARKROYAL Jakarta and Swissotel Living Mega Kuningan.

No hotel transactions in 2024

• The Jakarta hotel transaction market remained dormant, with its last transaction in 2023, as owners continue to hold onto their assets amid a significant improvement in inbound tourism and high trading performance.
• However, occupancy and ADR in Jakarta have been on a consistent upward trend, which has increased investor interest in the market. In 2025, we expect cash flow-generating hotels in Jakarta to attract attention from investors in the region and globally.

Outlook: Jakarta’s hotel market faces headwinds from austerity measures and the trade war, but government remains confident on economy

• There is rising concern that the government austerity measures, introduced in November 2024, will lead to reduced government travel budgets and fewer MICE activities, which will invariably impact hotels in Jakarta, which traditionally have been reliant on government-driven demand.
• Macroeconomic headwinds may increase due to the ongoing trade war, and it remains to be seen whether this is the start of a protracted battle. On a positive note, the government remains confident the economy will grow at 5%, unchanged from the previous forecast, which should bode well for corporate demand.