Hotel Intelligence Indonesia

Indonesia Hotel and Tourism Report | May 2015
Hotels & Hospitality Group
Hotel Intelligence
Indonesia
Contents
03
Market Summary
04
06
Bali
Market Overview
Jakarta
08
10
Lombok
Hotel Intelligence Indonesia 3
Market Overview
Tourism
Demand
Supply
Outlook
International tourist arrivals to
Indonesia numbered approximately
9.5 million during 2014, a growth
of 7.2% year-on-year. The country
has seen a CAGR (Compounded
Annual Growth Rate) of 7.0% in
international visitation between 2003
and 2014, however, growth has
been affected by security issues in
recent years.
Bali and Jakarta remain the most
popular destinations for tourists with
3.8 million and 2.3 million foreign
tourist arrivals in 2014 respectively.
Lombok is gaining traction with
foreign visitors and witnessed close
to 70,000 visitor arrivals in 2014,
growing by 41.8% between 2010
and 2014 (CAGR).
Branded new room supply is
primarily concentrated in Bali and
Jakarta with an additional 19,790
keys expected to enter these
two markets in the near future.
Internationally branded supply in
Lombok is limited but expected to
grow with the proposed Mandalika
Project (an integrated project
comprising of hotels, villas, luxury
residences and golf course) in
South Lombok breaking grounds.
The Indonesian tourism industry
is set to continue to grow for
the foreseeable future with
the government aiming for 20
million visitors by 2020. Planned
government investment in
infrastructure and additional flight
routes are expected to improve
the overall connectivity, while
investment in facilities for visitors
including new hotels across all star
categories, entertainment centers,
fine dining restaurants and tourist
attractions should boost the number
of visitor arrivals.
QUICK FACTS
(Bali and Jakarta)
Contribution of Tourism Industry to National GDP
9.5 million
6,292
3.1%
International Visitor Arrivals in 2014
Number of New Rooms in 2014
% of total GDP in 2013
(forecast to rise by 8.1% in 2014)
Source: WTTC, BPS-Statistics Indonesia, JLL
ADR - Average daily rate, RevPAR - Revenue per available room
4 Indonesia Hotel and Tourism Report
Market Summary
Indonesia is the fourth most populous nation in the world and sits between
the continents of Asia and Australia and between the Pacific and the
Indian Ocean. The country is predicted to have 255 million people from
more than 200 ethnic groups by the end of 2015.
Indonesia is the largest archipelago in the world comprising of over 17,000
islands. Of these islands the most well-known are Bali, Sumatra, Java,
Kalimantan, Sulawesi, Maluku Islands and Papua.
Due to its location and geology, the country is blessed with varied
landscapes and nature including green rainforests, numerous volcanoes,
pristine beaches and diverse flora and fauna.
Indonesia has a diverse culture that has developed over centuries, having
been influenced and adapted along the way with Indian, Arabic, Chinese
and European traces. Differences in culture can be seen from region to
region in terms of dance, textiles, architecture, cuisine and language.
Indonesia’s leading cities including Jakarta, Surabaya and Bandung, cater
to the business and leisure travels. A number of shopping malls, road side
stalls and MICE facilities continue to attract visitors.
Accessibility between cities and tourist destinations is facilitated by direct
flights, supported by regular and low cost carriers connecting more remote
destinations.
In 2014, Indonesia welcomed 9.5 million international visitors, with
visitation growing by 7.0% per annum (CAGR) between 2003 and 2014.
International Visitor Arrivals to Indonesia
Visitor Arrivals (million)
Annual Growth (%)
100%
10.0
9.0
80%
8.0
7.0
60%
6.0
40%
5.0
4.0
20%
3.0
2.0
0%
1.0
0.0
-20%
4 5
02 03 04 05 06 07 08 09 10 11 12 13 14
01 201
20 20 20 20 20 20 20 20 20 20 20 20 20
2
ar ar
D MTD M
T
Y Y
International Visitor Arrivals
Annual Growth
Source: BPS-Statistics Indonesia / JLL
MA
Hotel Intelligence Indonesia 5
THAILAND
PHILIPPINES
LAOS
CAMBODIA
VIETNAM
BRUNEI
MALAYSIA
SINGAPORE
Sulawesi
Kalimantan
Sumatra
INDONESIA
Maluku
Papua
Jakarta
Java
Bali
The Nusa Tenggara Islands
PAPUA
NEW
GUINEA
EAST TIMOR
Lombok
AUSTRALIA
Outlook
In the light of growing visitation coupled with improvement in the overall
tourism infrastructure, the outlook for Indonesian hospitality market
remains positive. The weakening of the Indonesian Rupiah continues to
attract foreign visitors, while domestic tourism also continues to grow.
Although visitor arrivals to Indonesia have been stunted by security issues
in the past such as bombing incidents including the one in Bali in 2005
and in Jakarta at the JW Marriott and Ritz-Carlton hotels in 2009, the
stabilising of the economic and political situation has provided cautious
optimism for investors.
While tourism is expected to remain strong with increased air traffic and
visa free initiatives, poor state of infrastructure remains one of the key
challenges across Indonesia.
Recent Key Transactions
Property
Name
Level 8
Urban Hotel
Petitenget
Location Year Rooms
Price
(USD)
Price per
room (USD)
Bali
2014
139
20 million
144,000
Somerset
Berlian
Jakarta
2014
137
9.8
million
71,800
Semara
Seminyak
Bali
2013
63
20
million
317,400
Bali Nirwana
Resort
Bali
2013
278
115
million
413,600
Source: JLL
6 Indonesia Hotel and Tourism Report
Jakarta
Jakarta is the capital and largest city of Indonesia, predicted to have
a population of 10.1 million people in 2015. The city is the country's
economic, cultural and political centre. It was originally established in
the fourth century and was an important trading port for the Kingdom of
Sunda.
Being the national capital, Jakarta acts as the main gateway to Indonesia’s
many tourist destinations. In 2014, Jakarta witnessed its highest ever
number of visitor arrivals. Although the capital is seldom viewed as a
centre for tourism itself, efforts to improve the city’s reputation as a service
and tourism city have been stepped-up.
The increase in flight connectivity between Jakarta and major gateway
cities will continue to boost visitation. Garuda Indonesia introduced direct
flights five times weekly between Jakarta and Amsterdam in May 2014
and London via Amsterdam flights in September 2014 which are expected
to become a daily route by the end of 2015. The airline also plans future
routes to Paris and Frankfurt, providing greater accessibility for European
travellers to Jakarta and beyond. This has led to the introduction of
Netherlands as one of the top ten source markets.
In recent years, Jakarta has expanded its facilities for visitors by
developing new multi-star luxury hotels, entertainment centres, fine
dining restaurants as well as tourist attractions in an effort to boost visitor
arrivals. Visitor arrivals have registered an 8.4% annual growth rate
(CAGR) between 2003 and 2014, reaching 2.3 million visitors in 2014.
Hotel Intelligence Indonesia 7
Demand
Trading Performance
• Jakarta is the most populous city in Indonesia and is country's
economic, cultural and political centre.
• Being an international gateway to the rest of the country, it welcomed 2.3
million foreign visitors during 2014, up 0.3% over the previous year.
• Malaysia, Mainland China, Japan, Singapore and Saudi Arabia are the
top source markets to Jakarta.
International Visitor Arrivals to Jakarta
Annual Growth (%)
100%
80%
2.0
60%
1.5
40%
20%
1.0
0%
0.5
-20%
02 03 04 05 06 07 08 09 10 11 12 13 14
14 15
20 20 20 20 20 20 20 20 20 20 20 20 20
20 r 20
r
a a
DM DM
YT YT
International Visitor Arrivals
Annual Growth
-40%
Source BPS-Statistics Indonesia / JLL
Occupancy (%)
100%
90%
80%
$150
70%
60%
50%
$100
40%
30%
$50
20%
10%
0%
$0
14 015
06 007 008 009 010 2011 012 013 014
0
0
2
2
2
2 2 2
2
2
h2 h2
arc Marc
M
D
YT YTD
ADR (USD)
RevPAR (USD)
Occupancy
Outlook
Rooms
Opening
InterContinental Pondok Indah Jakarta
300
2015
Sheraton Jakarta Gandaria City Hotel
300
2015
Regatta Jakarta
320
2015
The Bellagio
290
2016
Hotel Indigo Jakarta
110
2016
St Regis
124
2016
Rosewood Jakarta
200
2017
The Langham Jakarta
200
2017
Waldorf Astoria
181
2018
W Hotel Ciputra World II
250
2018
Source: JLL
ADR/RevPAR (USD)
$200
Source: STR Global / JLL
Key Hotel Openings
Hotel
• Figures for YTD March 2015 indicate a decline in RevPAR performance
of 6.8% y-o-y to USD 109 compared to the same period in 2014.
Trading Performance – Jakarta Upscale
Visitor Arrivals (million)
2.5
0.0
• Trading performance in 2014 was down over the previous year, with
RevPAR declining 4.7% relative to 2013 to USD 115 driven by a
simultaneous decline in occupancy from 65.9% to 63.7% and average
room rates from USD 184 in 2013 to USD 181 in 2014.
• As of year-end 2014, Malaysia, Jakarta’s largest source market,
continued to record a 1.3% y-o-y growth motivated by its close proximity
and the facilitation of low cost carrier flight connectivity between four
Malaysian cities and Jakarta.
• The development of Shari’ah tourism has also supported the increase
in tourists from Middle Eastern countries, with Saudi Arabia registering
a 26.2% y-o-y increase in 2014.
• Jakarta has witnessed significant supply additions in the recent past,
putting pressure on hotel trading performance.
• Investment in infrastructure including expansion of Soekarno–Hatta
Airport will boost the city's capacity to handle greater demand and
thereby support tourism and corporate demand.
Key Recent Additions
• Holiday Inn Express Jakarta Pluit Citigate, 297 keys;
• Ibis Styles Jakarta Airport, 251 keys;
• Mercure Jakarta Sabang, 166 keys;
• Fairmont Jakarta, 380 keys;
• Raffles Jakarta, 173 keys.
8 Indonesia Hotel and Tourism Report
Bali
Bali is known as the island of the gods and is the largest tourist destination
in the country. The island is famous for its art galleries, local traditions,
culture and nightlife as well as natural wonders including a large number
of sandy beaches, rugged coastlines, lush rice terraces and barren
volcanic hillsides.
Bali had an estimated population of 4.1 million people in 2014. Around
85% of the population adhere to Balinese Hinduism which can be seen
through its influence of the art and culture of the island.
In 2014, Bali welcomed 3.8 million tourists. Visitation grew by 12.9% per
annum (CAGR) between 2003 and 2014. Despite the rapid growth of
tourism and development, the Balinese tradition, culture and lifestyle is
still what it was and continues to make the island stand out from other
destinations.
Historically, much of the development has been focused in South Bali
(Seminyak, Legian and Kuta as well as quieter, higher-end destinations
such as Sanur and Nusa Dua). Further north, the town of Ubud is
recognized as the spiritual home of Balinese culture. Yet, outside these
main tourist areas, the island remains largely untouched, providing scope
for development.
Bali is benefiting from increased domestic and international visitor
arrivals thanks to continuously improving infrastructure and affordable air
connectivity. A host of new air routes linking the island to Mainland China
and the Middle East together with visa free entry proposed to nationals
from 30 countries including Japan, UK, USA, South Korea, Mainland
China and Russia shows the government’s desire to grow new markets
beyond Bali’s traditional base of Australian tourists, which constituted 25%
of international arrivals in 2014. As of date, nationals of 15 countries are
eligible for a 30-days visa free entry to Indonesia.
Infrastructure has improved significantly in recent years with major
achievements including the refurbishment of the international airport and
the construction of the Bali Mandara toll road, linking Kuta with Nusa Dua.
Construction of a new international airport at Buleleng Regency in the
north of the island has been planned by the authorities. Approval has also
been granted for improvement of roads linking South Bali and the capital
Denpasar to East, West and North Bali. These moves have been seen
as the most essential requirement to harness the untapped potential for
development in the remote areas of the island.
Although improvements in air and road connectivity are progressing,
occasional water and electricity shortages remain a challenge.
Hotel Intelligence Indonesia 9
Demand
Trading Performance
• Bali is the leading tourist destination in the country, famous for its art,
culture, nightlife and scenic beaches.
• In 2014, Bali welcomed 3.8 million foreign tourists, an increase of 14.9%
on 2013.
• Top source markets to Bali include Australia, Mainland China, Japan,
Malaysia and South Korea.
International Visitor Arrivals to Bali
Source: Bali Provincial Government / JLL
ADR/RevPAR (USD)
$200
Occupancy (%)
100%
90%
80%
$150
70%
60%
50%
$100
40%
30%
$50
20%
10%
0%
$0
4
5
06 07 08 09 10 11 12 13 14
01 201
2
20 20 20 20 20 20 20 20 20
h
h
arc Marc
M
D
YT YTD
ADR (USD)
RevPAR (USD)
Occupancy
Source: STR Global / JLL
Key Hotel Openings
Outlook
Rooms
Opening
Hilton Garden Inn Ngurah Rai Airport
292
2015
Hotel Indigo Seminyak
280
2015
Kempinski Nusa Dua
480
2015
Westin Ubud Resort & Spa
107
2016
Andaz Bali
144
2016
Jumeirah Bali
120
2016
Mövenpick Resort
270
2016
Mandarin Oriental Bali
121
2016
Six Senses Bali
97
2017
Shangri-La Nusa Dua
249
2017
Fairmont Uluwatu
170
2017
Ritz-Carlton Reserve
100
2017
Waldorf Astoria
96
2017
Conrad Ubud Resort
80
2017
Raffles Uluwatu
80
2017
Source: JLL
• Figures for YTD March 2015 represent a 10.7% decrease in RevPAR
to USD 90 compared to USD 101 in 2014, which is driven by both a
decline in ADR as well as occupancy.
Trading Performance – Bali Upscale
Visitor Arrivals (million)
Annual Growth (%)
4.0
100%
3.5
80%
3.0
60%
2.5
40%
2.0
20%
1.5
0%
1.0
-20%
0.5
0.0
-40%
4 5
02 03 04 05 06 07 08 09 10 11 12 13 14
01 201
2
20 20 20 20 20 20 20 20 20 20 20 20 20
ar ar
D MTD M
T
Y Y
International Visitor Arrivals
Annual Growth
Hotel
• RevPAR increased by 2.3% year-on-year during 2014 to USD 117,
primarily driven by an increase in occupancy to 72.4%. While ADR
declined 4.7% to USD 162 during the same period.
• N
ew air routes and initiatives such as extension of visa free entry to
citizens of 30 countries, are anticipated to boost tourist inflow.
• Construction of a new airport in the north has been approved which
may allow potential development in remote and untapped areas of the
island in the future.
• Significant supply pipeline is expected to put pressure on the hotel
market performance in the near term. However, in the longer term, we
expect the incremental supply to be absorbed with growing demand.
Key Recent Additions
• Ritz-Carlton Bali, 313 keys;
• Double-Six Seminyak, 146 keys;
• Mercure Bali Legian, 321 keys.
10 Indonesia Hotel and Tourism Report
Lombok
Lombok is a tropical island in the West Nusa Tenggara province of
Indonesia. The city of Mataram is the largest city and provincial capital
located on the island. Situated on the east of Bali, Lombok offers natural
landscapes, a traditional way of life and a diverse flora and fauna that
have helped in capturing growing attention of a number of domestic and
international visitors.
Accessibility to Lombok Island is primarily through Lombok International
Airport, though busses and ferries are also available to allow tourists to
reach the island via Jakarta and Surabaya.
Attractions on the Lombok Island include Lombok beach, Senggigi
beach, Marmada Park and Mount Rinjani, the second highest volcano in
Indonesia. Moreover, the island is also famous for its great diving, trekking
and surfing locations.
The Bali Tourism Development Corporation (BTDC) in conjunction with
the Indonesian Government, have proposed a unique project named
Mandalika in south Lombok. The proposed integrated project will be
built on a 1,053 hectare plot of land and will comprise luxury residences,
exclusive villas, hotels and a golf course. The construction of hotels is
expected to start by August 2015, while basic infrastructure development
has already commenced. Slated to be fully complete by 2021, the
proposed mega project will certainly provide fillip to the tourism industry in
Lombok.
Hotel Intelligence Indonesia 11
Supply
Demand
• The total number of visitors to Lombok via Lombok International airport
reached 69,000 in 2014.
• Visitor arrivals have grown at a rate of 41.8% annually (CAGR) between
2010 and 2014.
• Key tourist attractions in the region include Lombok beach, Senggigi
beach, Marmada Park and Mount Rinjani.
• The island is famous for its great diving, trekking and surfing locations.
• Lombok appears fifth on TripAdvisor's 2015 Travellers' Choice list of the
top 10 islands in Asia.
International Visitor Arrivals to Lombok
Visitor Arrivals (’000)
80
70
60
50
40
30
20
10
0
10
20
11
20
12
20
13
20
14
20
International Visitor Arrivals
Annual Growth (%)
160%
140%
120%
100%
80%
60%
40%
20%
0%
-20%
-40%
4
5
01
01
2
2
ar
ar
DM
DM
T
T
Y
Y
Annual Growth
• Internationally branded supply in Lombok is limited but growing. Key
players in the market include Sheraton, Novotel and The Oberoi branded
resorts.
Outlook
• Bali Tourism Development Corporation (BTDC) has started work on
the Mandalika project in South Lombok. With an aim to provide a
suitable resort infrastructure, the proposed project will consist of luxury
residences, hotels, golf course, museum and MICE facilities. The project
is expected to be completed in three phases by 2021.
• Although Tigerair and Jetstar no longer operate services from Singapore
and Perth to Lombok, AirAsia has increased service from 7 to 10 weekly
flights as it anticipates increase in demand to the island.
Source BPS-Statistics Indonesia / JLL
Front cover
Borobudur, Yogyakarta
About JLL
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© 2015 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.