Jakarta: A Rising Star
Jakarta, the dynamic capital of Indonesia, has shown remarkable recovery in its hotel construction pipeline. After a dip from 16,112 rooms in 2Q2019 to 8,557 rooms in 1Q2023 due to the pandemic, the sector has bounced back to 9,369 rooms in 3Q2023. This resilience highlights Jakarta's attractiveness to hotel developers and investors.
📈 West Java & Banten: Regions of Rapid Growth
The hotel sector in West Java, Jakarta, and Banten has seen significant increases in room supply. South Tangerang and Tangerang in Banten province have experienced 5-year CAGRs of 14.9% and 14.8% respectively for 2017-2022.
🔍 Detailed Look at DKI Jakarta and Bodebek
DKI Jakarta: With 432 hotels offering about 56,500 rooms, this region has experienced a CAGR of 5% for rooms from 2017 to 2022. North Jakarta witnessed a 5-year CAGR of 8.7% in room supply, followed closely by Soth Jakarta at 8.2%.
Bodebek (Bogor-Depok-Bekasi): Comprising the cities of Bogor, Depok, and Bekasi, and known for its significant industrial and residential development, the region has shown the highest growth, with a CAGR of 11% for rooms. The market dynamics indicate a need for differentiation and cautious investment strategies due to potential oversupply.
📊 Regional Growth Statistics
Banten leads the three major provinces with a 9.2% CAGR in room supply, followed by West Java and Jakarta at 7.1% and 4.8% respectively. Notable growth in Kota Tangerang and Kota Tangerang Selatan with CAGRs of 14.8% and 14.9%. Jakarta regions show varied but steady growth, with Kota Jakarta Utara leading at 8.7% CAGR.
🔮 Looking Ahead
This upward trend in Indonesia's hotel sector, especially in Jakarta, West Java, and Banten, signals strong investor confidence and a growing market. However, the nuances in supply and demand dynamics across different regions necessitate tailored strategies for hotel owners, investors, and lenders.
🌍 Conclusion
Indonesia's hotel industry is a beacon of growth and opportunity in Asia. Its resilience and adaptability, especially post-pandemic, position it as a key player in the hospitality sector.
Ross Woods - Follow Ross
Hotel Investment Strategy & Asset Management, Hotel Acquisitions & Transactions Advisory, Hotel Market Forecasts.
Source: PT. Hotel Investasi Strategis based on BPS Statistics Indonesia & Lodging Econometrics data
