- Hotels and Accommodations hold a large share in the hospitality real estate industry as it is the most required necessity for the rising number of tourists in the country and locals who like holidaying over weekends or some part of the year.
- Tourism is the key driver for this sector coupled with easing certain tax and real estate laws that had opened opportunities for both locals and foreigners to invest and purchase properties to conduct the alluring business of hospitality in the country.
- Technology is gaining momentum with the improving economic development and digitalization of the business processes in both upstream and downstream sectors of the hospitality real estate sector in the country.
- Prospects for commercial properties do not look much promising as overall, there appears to be significant new supply coming in for all types of properties, especially in Jakarta.
- Indonesia’s Real Estate Association (REI) very recently has been aiming to gain more and more collaboration between all the government agencies and private parties involved in Indonesia’s property industry.
- Secretary-General of Real Estate (sic) Indonesia, Paulus Totok Lusida called for a greater collaboration from all parties that have an impact on Indonesia's real estate industry, as it is seen that the industry is growing too slowly for the last size years and needs more than just a reduction in the Bank Indonesia (BI) benchmark rate.
Scope of the Report
A complete background analysis of the Hospitality Real Estate Sector in Indonesia, which includes an assessment of the parental market, emerging trends by segments and regional markets, Significant changes in market dynamics and market overview is covered in the report. The report also features the qualitative and quantitative assessment by analyzing data gathered from industry analysts and market participants across key points in the industry’s value chain.
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Key Market Trends
Tourism in Indonesia is the Major Growth Driver for the Rise of Hospitality Industry
- Tourism in the country is the major growth driver for the rise of the hospitality industry, which eventually increases the demand for hotel properties, in order to meet the increasing demand.
- Recently, the Sustainable Destinations Top 100 Award, which is an annual Green Destinations Foundation program, had included four Indonesian villages, two in Yogyakarta and two in Bali. They were included in the categories of Environmental Conservation, Economic Utilization for Local Communities, and Socio-Culture. In recent times, the demand for hotel accommodation in Jakarta has been propelled by the Asian games. The hotel market is likely to look out for more and more occasional events to sustain the business.
- The number of foreign tourists visiting Indonesia grew by 7.3% to 9.44 million in 2014, up from 8.80 million in 2013. The government targets a further increase to at least 10 million in 2015 and the president has proclaimed a goal of more than 20 million tourists a year by the time his term ends in 2019. That would still be significantly less than the number of tourists in Malaysia and Thailand already attracts today.
- Indonesia’s tourism investments have been mainly focused on the development of fully integrated resort sites, as such properties help to boost the construction of tourist facilities, such as hotels and the development of the surrounding environment through social and cultural aspects. Mid-tier resort and city hotel investments are now still predominantly domestically driven, however, that is changing rapidly in the short term.
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Hotels and Accommodation Segment is Dominating the Market
- The Indonesian hotel industry is highly developed, with all manner of accommodation, from five-star hotels to modest guest houses. Most of the luxurious resorts are located on the island of Bali, which is Indonesia’s leading destination for leisure travel. Hotels in Jakarta and other cities tend to cater more to business travelers.
- Due to the significant expansion in the supply of hotels, there has been much commentary on the likely impact on hotel asset prices over the next couple of years, and it may depend on the rise in the number of domestic travelers and foreign tourists, especially in secondary cities throughout the country.
- Being Southeast Asia's largest country, Indonesia continues to attract an increasing number of travelers from around the world. At the same time, Indonesians themselves are traveling around the country. The demand for hotel accommodation is set to rise significantly over the coming years as more holidaymakers and businesspersons visit the country. Intensifying trade integration in the ASEAN region and increasingly affordable airfares are a boon for hotels and related businesses in Indonesia and should help the industry overcome the current challenges of oversupply in some areas.
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- Indonesian hospitality real estate market is highly fragmented with the presence of players, like Plaza Indonesia Realty, Sinar Mas Land, Agung Podomoro Land, and Ciputra group that have developed some key hotel projects in the country.
- Indonesia is also witnessing an increase of international players, like Tokyo Land Corporation, which is a Japanese property development company.
- Indonesia, being one of the emerging investment markets in the real estate sector, has been attracting international players, mostly from Asian countries. Due to favorable FDI policies by the government of Indonesia, the competition within the hospitality real estate is expected to increase over the next few years.
Table Of Contents
1.1 Study Deliverables
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS AND DYNAMICS
4.1 Market Overview
4.2 Market Dynamics
4.3 Insights into Technological Innovation in the Hospitality Real Estate Sector
4.4 Insights on Urban Commercial Property Prices and Recent Hospitality RE Transactions
4.5 Industry Value Chain Analysis
4.6 Porter's Five Forces Analysis
5. MARKET SEGMENTATION
5.1 By Property Type
5.1.1 Hotels and Accommodation
5.1.2 Spas and Resorts
5.1.3 Other Property Types
6. COMPETITVE INTELLIGENCE
6.1 Market Concentration
6.2 Company profiles
6.2.1 Sinar Mas Land
6.2.2 Agung Podomoro Land
6.2.3 Plaza Indonesia Realty
6.2.5 Duta Anggada Realty
6.2.6 Permata Birama Sakti
6.2.7 PP Properti
6.2.8 Tokyu Land Corporation
6.2.9 Pakuwon Jati
6.2.10 PT Surya Semesta Internusa (Persero) Tbk
7. INVESTMENT ANALYSIS
8. FUTURE OUTLOOK OF THE SECTOR
** Subject to Availability