Indonesia Hospitality Real Estate Market Size

Hospitality in Indonesia Market Analysis

The Indonesia Hospitality Real Estate Market size is estimated at USD 1.84 billion in 2024, and is expected to reach USD 3.25 billion by 2029, growing at a CAGR of 12.07% during the forecast period (2024-2029).

• The economic crisis caused by the COVID-19 pandemic in 2020 influenced the hospitality real estate market, causing some projects to be postponed. Hotels and other lodging establishments account for a sizable portion of the hospitality real estate market. This is due to the fact that accommodations, such as hotels, are essential to the ever-increasing influx of foreign visitors to the country, as well as to the growing number of locals who like to take a weekend or seasonal vacation.
• Tourism is the main driver of this industry. Some tax and real estate rules have also been loosened, which has made it possible for both locals and foreigners to invest in and buy buildings for the lucrative hospitality business in the country. Tourism brought significant foreign exchange inflows to Indonesia in the form of international tourism receipts, as well as investments and capital in tourism-related businesses. Tourism has typically resulted in infrastructure improvements for the local economy of a country.
• Although the number of domestic trips taken in Indonesia greatly outnumbers the number of foreign visitors, domestic tourists spend less than half of what international visitors do. In 2020, the government came up with a plan to protect the tourism industry from the effects of the COVID-19 outbreak. The plan was to pay influencers up to IDR 72 billion (USD 5.2 million) to promote the country.
• The government also waived hotel and restaurant taxes in 10 tourist destinations, including Toba Lake Regency in North Sumatra, Yogyakarta, Malang in East Java, Manado in North Sulawesi, Bali, Mandalika in West Nusa Tenggara, Labuan Bajo in East Nusa Tenggara, Bangka Belitung, and Batam and Bintan in the Riau Islands. PT Indonesia Tourism Development (Persero) or Indonesia Tourism Development Corporation (ITDC) revealed in March 2021 that a luxury hotel being built worth IDR 709 billion is being worked on in Mandalika, West Nusa Tenggara (NTB).
• In July 2023, Jones Lang LaSalle (JLL) Hotels and Hospitality Group Asia Pacific Senior Vice President and Investment Sales Julien Naouri said that investors were still confident about the situation of hotels in Indonesia. Until the end of this year, six new hotels will be ready to operate in Bali, and two new hotels will be ready to operate in Jakarta. The two new hotels that would operate in Jakarta at the end of 2023 were Swiss-Belhotel Kelapa Gading, with 316 rooms, and Movenpick Jakarta Pecenongan, with 253 rooms.