International demand ramps up in 2023

• The number of visitor arrivals in Jakarta has been rapidly increasing since the reopening of international borders. Strong momentum from short-haul markets such as Singapore, Malaysia, Mainland China, Japan and South Korea has accelerated the post-pandemic recovery.
• As of YTD May 2023, Jakarta has experienced a significant 337.6% y-o-y increase in international visitor arrivals by welcoming 642,076 visitors. This represents approximately 68.3% of total international arrivals during the same period in 2019.

Supply growth backed by an uptick of new serviced apartments

• The hotel pipeline is expected to ramp up in 2023, with a total of 1,706 rooms expected to enter the market this year, representing a 2.7% y-o-y growth. Between 2023 and 2025, hotel supply is projected to grow at an annual rate of 2.6%.
• The majority of new supply that is slated to open in 2023–2024 is in the Midscale to Upscale segment, and 41% of the supply comprises serviced apartments from brands such as Ascott, Somerset, Citadines and PARKROYAL.

RevPAR exceeds pre-pandemic levels

• Jakarta hotel markets across all segments have seen a significant growth in trading performance in 2023, which has not only recovered but exceeded pre-pandemic levels.
• Compared to 2019, both the Luxury and Upscale markets grew in revenue per available room (RevPAR) as at YTD June 2023, by 10% and 27% respectively. This was mainly attributed to an uptick in ADR after all pandemic restrictions were lifted in December 2022, which reignited corporate and leisure demand. Domestic demand has remained robust as well, supporting overall trading performance.

Outlook: A full-fledged recovery of the market is anticipated

• The 2024 Indonesian general election should further boost corporate demand in the near term as more meetings are expected to be held in the capital. Hence, we foresee an uptick in occupancy leading up to the election as hotels capitalise on the spillover demand from political activities.
• Looking ahead, we expect the trading performance to continue improving on the back of an expected ramping up of Mainland Chinese outbound tourism. Trading performance is expected to maintain an elevated level in 2023 and early 2024.