APPD Market Report Article


August 26, 2022

Mike Batchelor, CEO - Hotels & Hospitality Group, Asia


IDR 1,033,592


Upward trend in international visitation as borders reopen

  • International visitation is seeing a strong pick-up since borders reopened in April 2022, following two years of subdued performance. As at YTD June 2022, international visitors totalled 146,720, which represented a 221% y-o-y increase. Despite the strong rebound, international visitation remains muted at 15% of pre-COVID-19 levels.
  • Domestic demand is likely to remain the key demand driver for luxury hotels in the near term as international visitation continues to recover. On a positive note, the earlier-than-expected reopening of borders both in Indonesia and the wider Asia Pacific region is expected to fuel a rebound in demand from key source markets.

Hotel openings expected to pick up in 2H22

  • Hotel openings remain limited so far in 2022, compared to historical years. The only hotel that opened in 2Q22 was the 231-room Citadines Sudirman Jakarta. Several planned openings in 1H22 have either been delayed to the second half of 2022 or deferred indefinitely.
  • Six lodging properties offering around 937 rooms are slated to open for the rest of 2022, a substantial pick-up from the last two years due to a spillover of delayed openings since the onset of the COVID-19 pandemic. Serviced apartments are expected to account for around 43% of upcoming rooms that are slated to open in 2H22.

RevPAR recovery is driven by ADR growth as occupancy stabilises

  • Revenue per available room (RevPAR) rose by 51.3% y-o-y to IDR 1.0 million as at YTD June 2022, driven by a 33.9% growth in average daily rate (ADR) to IDR 2.1 million, as hotels continue to increase rates and occupancy rates show sign of stabilisation. Occupancy rate rose by 5.6 ppts y-o-y to 48.8%.
  • Luxury RevPAR in June 2022 was IDR 1.3 million, which marked one of the highest monthly RevPAR performance since the start of the COVID-19 pandemic. Monthly RevPAR was also in line with June’s 2019 performance, which suggests that trading performance may soon recover and reach pre-pandemic levels again.

Outlook: Rebound in international visitation to drive trading recovery

  • While domestic tourism will likely continue to drive demand for luxury hotels in the near term, the quicker-than-expected reopening of borders, both in the country and regionally, is expected to fuel the rebound in higher-paying international visitors. This should facilitate a recovery in trading performance, particularly for ADR.
  • As international visitation ramps up, The Ministry of Tourism and Creative Economy (MoTCE) is taking steps to ensure seat capacity is available to accommodate the anticipated pent-up demand of travellers. The MoTCE will likely also focus its marketing and promotional efforts on Australia, Singapore, France, the UK and the US, which are key markets to Indonesia.

Note: Jakarta Hotels refers to Jakarta's luxury hotel market.

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