Indonesia Hospitality Real Estate Market Size (2024 - 2029)

The market size of the hospitality real estate sector in Indonesia is expected to grow significantly in the coming years, despite the impact of the COVID-19 pandemic. This growth is primarily driven by the tourism industry, which contributes to a large portion of the market. Hotels and other lodging establishments form a significant part of this market, catering to both local and foreign visitors. The government has implemented several measures to support the industry, including tax waivers and promotional campaigns. Despite the challenges, investors remain confident in the potential of the Indonesian hospitality real estate market.

Market Size of Indonesia Hospitality Real Estate Industry

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Indonesia Hospitality Real Estate Market Summary
Study Period 2020 - 2029
Base Year For Estimation 2023
Market Size (2024) USD 1.84 Billion
Market Size (2029) USD 3.25 Billion
CAGR (2024 - 2029) 12.07 %
Market Concentration Low

Major Players

Indonesia Hospitality Real Estate Market Major Players

*Disclaimer: Major Players sorted in no particular order

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Indonesia Hospitality Real Estate 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).

  • Tourism is the primary driver of this industry. Some tax and real estate rules have also been loosened, which has made it possible for 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.
  • Indonesia, with its expansive archipelago, entices tourists with a plethora of experiences. From idyllic beach getaways, wellness retreats, and cultural immersions to thrilling adventures, the country has it all. Notably, it boasts world-renowned dive sites like Raja Ampat. In 2021, the Indonesian Ministry of Tourism and Creative Economy earmarked five 'super-priority' destinations for heightened promotion: Labuan Bajo in East Nusa Tenggara, Lake Toba in Sumatra, Mandalika in West Nusa Tenggara, Borobudur in Java, and Likupang in North Sulawesi. A significant budget of IDR 351.6 billion was allocated in 2022 to bolster the development of these destinations.
  • According to industry sources, investors continued to hold a positive outlook on the Indonesian hotel market as of July 2023. By the end of 2024, Bali is expected to welcome six new hotels, while Jakarta will see the debut of two. Among the anticipated openings in Jakarta are the Swiss-Belhotel Kelapa Gading, boasting 316 rooms, and the Movenpick Jakarta Pecenongan, featuring 253 rooms. Indonesia's tourism sector continues to thrive, with significant investments in infrastructure and hospitality signaling robust growth. The strategic promotion of 'super-priority' destinations and the optimistic outlook of investors underscore the sector's potential for sustained economic impact.

Indonesia Hospitality Real Estate Industry Segmentation

Hospitality property means the development of real estate, the primary usage of which is as a hotel or motel, with individual rooms principally for short-term rental to tenants occupying the same.

The Indonesian hospitality real estate market is segmented by property type (hotels and accommodations, spas and resorts, and other property types). The report offers market size and forecasts for the Indonesian hospitality real estate market in value (USD) for all the above segments.

By Property Type
Hotels and Accommodation
Spas and Resorts
Other Property Types

Indonesia Hospitality Real Estate Market Size Summary

The Indonesian hospitality real estate market has seen significant growth, with a substantial portion of the market being made up by hotels and other lodging establishments. This growth is driven by the increasing influx of foreign visitors to the country and the growing trend of locals taking vacations. The tourism industry is the main driver of this market, with both locals and foreigners investing in buildings for the lucrative hospitality business. Despite the economic crisis caused by the COVID-19 pandemic, the government has taken steps to protect the tourism industry, including tax waivers and promotional initiatives. The hospitality industry in Indonesia is also seeing a surge in the construction of hotels and accommodations, catering to both business travelers and tourists. This increase in supply is expected to impact hotel asset prices over the coming years. The market is highly fragmented, with both local and international businesses developing significant hotel projects. The presence of international players is increasing, particularly from Asian countries, due to Indonesia's emerging status as a real estate investment market. The hospitality real estate market in Indonesia is expected to become more competitive in the future, driven by the government's favorable FDI policy.

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Indonesia Hospitality Real Estate Market Size - Table of Contents

  1. 1. MARKET INSIGHTS AND DYNAMICS

    1. 1.1 Market Overview

    2. 1.2 Market Drivers

      1. 1.2.1 Indonesia's Hospitality Market Shifting Preference for Local and Authentic Experiences

    3. 1.3 Market Restraints

      1. 1.3.1 Difficulties in Implementing Tourism Policies

    4. 1.4 Market Opportunities

      1. 1.4.1 Increase in Internet Access and Online Testimonials

    5. 1.5 Insights into Supply Chain/Value Chain Analysis

    6. 1.6 Industry Attractiveness - Porter's Five Forces Analysis

      1. 1.6.1 Bargaining Power of Suppliers

      2. 1.6.2 Bargaining Power of Buyers/Consumers

      3. 1.6.3 Threat of New Entrants

      4. 1.6.4 Threat of Substitute Products

      5. 1.6.5 Intensity of Competitive Rivalry

    7. 1.7 Insights into Technological Innovation in the Hospitality Real Estate Sector

    8. 1.8 Insights into Urban Commercial Property Prices and Recent Hospitality RE Transactions

    9. 1.9 Impact of COVID-19 on the Market

  2. 2. MARKET SEGMENTATION

    1. 2.1 By Property Type

      1. 2.1.1 Hotels and Accommodation

      2. 2.1.2 Spas and Resorts

      3. 2.1.3 Other Property Types

Indonesia Hospitality Real Estate Market Size FAQs

The Indonesia Hospitality Real Estate Market size is expected to reach USD 1.84 billion in 2024 and grow at a CAGR of 12.07% to reach USD 3.25 billion by 2029.

In 2024, the Indonesia Hospitality Real Estate Market size is expected to reach USD 1.84 billion.

Hospitality Industry in Indonesia Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)