Faced with low demand due to the absence of foreign tourists from Indonesia for much of 2021 and 2022, many of the country’s hotels reduced room rates in an effort to stimulate demand and avoid operating profitably during the COVID-19 pandemic. With room rates at many hotels below the typical average throughout 2021, occupancy rates were supported across the category.
The Ramadan and Eid festive period tends to mark the peak of demand for hospitality genera Indonesia, and this definitely applies to hotels as many people travel to their home town and cities of origin at this time of year to spend time with friends and family. However, this typically reliable seasonality in demand for lodging has been interrupted by the COVID-19 pandemic, with the decision of the government of Indonesia to impose restrictions on domestic travel during the Ramadan and Eid festive period during 2020 and 2021 as a key plank of its efforts to control the spread of the COVID-19 virus putting considerable pressure on demand for hotels.
While the boom that was seen in domestic tourism during 2020 and 2021 due to the unavailability of outbound travel is unlikely to last very long as international borders will inevitably be reopened once the spread of the COVID-19 virus has been brought under control, the shift in focus towards catering to domestic travellers that has been seen across hotels since Indonesia’s borders were closed to international visitors at the peak of the COVID-19 pandemic during 2020 is likely to remain in effect during the forecast period. In particular, the eventual lifting of travel restrictions during the crucial Eid/Lebaran festive period is likely to motivate hotels to target domestic travellers at this peak time for domestic travel and tourism.
Third-party lodging intermediaries are becoming increasingly popular among the Indonesian population and this presents opportunities to hotels and other lodging outlets to expand the consumer bases and improve occupancy rates. In addition, these lodging intermediaries are increasingly engaging in promotions to position their brands and gain an advantage over their rivals.
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Understand the latest market trends and future growth opportunities for the Lodging industry in Indonesia with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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This report originates from Passport, our Lodging research and analysis database.
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