Inbound travel on track to recover after reopening of borders

• Jakarta witnessed a strong rebound in international visitation since the full reopening of borders in April 2022, as seen from an exponential visitor arrival growth from May 2022 onwards. As of YTD November 2022, visitor arrivals have increased by 690% y-o-y.
• Top source markets include Malaysia, Singapore, Mainland China, South Korea and USA. As of YTD November 2022, total international visitors only represented 33.5% of 2019’s pre-pandemic levels.

New hotel supply concentrated in the CBD region

• A total of 1,253 new rooms entered the market in 2022. Notable hotel openings include the 282-room St Regis Jakarta and the 220-room Park Hyatt Jakarta.
• The hotel pipeline from 2023 to 2025 remains relatively muted, with a total of 1,970 rooms scheduled to enter the market during the period. This translates to a compound annual growth rate (CAGR) of 1.9%. The majority of hotels that are slated to open from 2023 to 2025 are located within the CBD, with the remaining openings located in the North, South and Central.

Domestic tourism continues to drive RevPAR

• Despite muted international demand, luxury hotels were able to attain a RevPAR level that was comparable to pre-pandemic levels. RevPAR rose 56.9% y-o-y, supported by a recovery in ADR and occupancy, which rose by 32.7% and 8.4 percentage points respectively.
• Trading performance is expected to continue improving following the revocation of public policy restrictions as well as the foreseeable return of Mainland Chinese tourists to Jakarta.

Outlook: Lodging industry still optimistic despite global headwinds

• Having exceeded its target for international arrivals in 2022, the Indonesian government has set a new target of attracting about 7.4 million foreign tourists in 2023. Key source markets for 2023 include countries that have showed increasing trends in tourist arrivals, such as Australia, India, Malaysia, New Zealand and Singapore.
• However, Jakarta may face some external headwinds in the form of a shift in consumer behavior amid a global recession which could hamper the recovery in corporate travel. The recent surge in COVID-19 infections in Mainland China despite the earlier-than-expected reopening may also delay the return in Chinese visitors, which was the top source market to Jakarta pre-COVID-19.