Rich in natural resources and experiencing an era of dynamic economic progress, Indonesia is a market not to be missed. Tourism arrival is expected to increase from the current 250 million in 2012 to an estimated 400 million by 2023 based on a 5% compound annual growth rate. An additional 100,000 guestrooms will be required, translating to an estimated 700 to 800 hotels to be built in the next decade, creating tremendous opportunities for developers, investors, financiers, hotel management groups, airlines companies, travel agencies, consultancies and other stakeholders.
The concentration of Indonesia's international tourist arrivals still revolves between the nation's capital city Jakarta and the world-renowned destination of Bali. However, there is growing interest in Indonesia's second and third tier markets, with many market players taking note of their massive potential. Stakeholders such as hotel operators, investors, developers and the government sectors are closely following the new investments 'hot spots' of Indonesia.
Economy to mid-scale hotel properties are the key target segments for many stakeholders' growth expansion plans in the coming years. Hotel chains such as Accor, InterContinental Hotels Group, as well as Indonesia's domestic hotel groups such as Archipelago International and Tauzia have indicated their intentions of strengthening the presence of their economy to mid-scale brands in such emerging markets.
Overall, Indonesia’s tourism industry, can expect strong long-term potential, bolstered by rising demand for domestic and regional travel, resulting in a diversification of destinations and hotel product offerings.
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