Influx of luxury hotels yet to spur international demand to Jakarta - Tourism Indonesia

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Tuesday, July 2, 2019

Influx of luxury hotels yet to spur international demand to Jakarta

(Source: booking.com)
In its transformation into an Asian megacity, Jakarta has been slow to increase its mix of international visitors, an imbalance that international-brand luxury hotels alone cannot correct, C9 Hotelworks argues.
In 2018, the city’s hotels hosted over 13 million guests, yet 86% were from the domestic segment.

According to the newly released the Jakarta Hotel Market Review by C9 Hotelworks, over 2.7 million overseas passengers arrived at the gateway Soekarno-Hatta International Airport last year. Over a 10-year period the compound annual growth rate hit an impressive 7.4%.

Yet, the reality is that Indonesia’s largely domestic economic marketplace remains the key spotlight as public sector infrastructure is playing catch up with ongoing mass transportation developments trying to link the city’s spread of mini-metros, C9 Hotelworks observes.

A key outcome of the domestic feeding frenzy is that Indonesian conglomerates and real estate groups are developing massive integrated mixed-use properties with global luxury operators. Jakarta’s accommodation pipeline includes well-known names such as Park Hyatt, Waldorf Astoria, St. Regis, W, Regent and Langham.

Historically the influx of overseas guests are business travellers during peak mid-week periods who leave the city in advance of the weekend. C9 surmises that this leaves hotels with the choice of either lower room rates for the domestic market or empty beds.
Jakarta’s international geographic source of business profile has seen mainland China in the top position since 2015, with a five-year CAGR of 9%. Rounding out the top five are Malaysia, Japan, Singapore and Saudi Arabia. There have been few surprises during the past few years yet two international sporting events, the 2018 Asia and Para Asian games pushed market-wide demand higher.

Looking forward, C9 Hotelworks managing director Bill Barnett said: “It’s unclear if the new luxury pipeline will dramatically induce the overseas market. Until there are broader economic reforms that will positively impact FDI (foreign direct investment) and improvements in commuting to CBD areas, the domestic segment is likely to remain firmly entrenched in the driver’s seat of Jakarta hotel performance.” (TTGAsia)

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