Jakarta to see over 600 new hotel rooms by end-2023

Majority of the new supply will be from 5-star hotels.

According to a Colliers report, Jakarta’s total room supply up to Q1 2023 was 44,685 rooms and it is estimated that 638 new hotel rooms will be built by the end of 2023, with the majority of the supply being 5-star hotels.

Since the pandemic, Colliers said the supply of new rooms in Jakarta has significantly decreased. The hotel pipeline has come to a halt due to declining demand. Aside from that, several hoteliers carried out renovations towards the end of the pandemic, either by closing a portion of their hotel or by completely renovating their establishment whilst temporarily closing it. 

“Other than to change the appearance of their hotel, some hotels underwent renovation because they intend to be run by new operators. A new appearance and new management could attract more guests,” the report said.

Here’s more from Colliers:

Typically, there are not many business activities at the start of the year because most corporations and government offices are still preparing their budgets. Although activities were relatively quiet at the start of 2023, there was a noticeable movement in business, particularly in activities related to MICE accommodation. 

Because the fasting month fell at the end of Q1 this year, many activities scheduled for Q2 were moved ahead because it typically takes one to two weeks after Eid for business to resume normal operations. Hotel-related operations are set to resume in mid-May 2023. 

Aside from government and corporate MICE activities, many offline events such as music concerts (especially those involving international artists), sports competitions, exhibitions, and so on have a positive impact on hotel performance. These activities draw in not only the performers (artists, athletes, their teams, and the organising committee), but also the audience.

Many offline events were very successful in attracting many people from mid-2022 to early 2023 because there were no such activities at all during the pandemic (2020-2021), let alone events such as music concerts, sports matches, and so on. Expo activities are also typically limited. This is what draws spectators from all over the country and even the world to Jakarta to watch/participate in such events. 

During the month of fasting, hoteliers prioritise ifthar activities as a key revenue source due to the decrease in income from business travellers who typically occupy rooms during this time. As such, ifthar events are regarded as a crucial pillar of the hotel's financial stability. 

However, a circular prohibiting government employees from holding ifthar gatherings, issued by President Jokowi a few days before Ramadan, has caused anxiety among hoteliers as their revenue stream is now dependent on private sector events. The hope is that after Eid al-Fitr, hotels will experience a resurgence, especially as they prepare for the 2024 political season.