Jakarta & Bali Hotel Market
Update
H1 2019
JAKARTA & BALI HOTEL MARKET UPDATE
H1 2019
SNAPSHOT
JANUARY 2019 FEBRUARY 2019
• East Nusa Tenggara MAY 2019
• Direct flights from Moscow
administration plans on MARCH 2019 • Vietnam’s Vietjet H1 2019
to Bali have resulted in a
closing Komodo National • The government has launched its inaugural • BPS reported 5.12 million foreign
6.95% increase of Russian
Park temporarily to boost tourists. The Indonesian lowered this year’s revenue APRIL 2019 flight from Ho Chi Minh tourist arrivals in Indonesia from Jan
the population of Komodo Embassy in Moscow target for the tourist • The Tourism Ministry has City to Denpasar. Direct – May 2019. The data shows a
dragons and deer. Tourism industry from US$20 billion formed the Indonesia flights connecting decrease of 15.5% year on year.
collaborated with the
Minister Arief Yahya to US$17.6 billion, as natural Sustainable Tourism Council Cambodia and Indonesia • IDR appreciated 1.64% against USD
Tourism Ministry to organize
expressed his opposition to disaster threats still loom (ISTC) to certify destinations are also being considered in the first quarter of 2019, as
various programs, such as
the plan, stressing that over Indonesia. Projected in sustainability, focusing on to boost arrivals under ongoing trade war between China
tourism exhibitions, sales
securing travel packages to foreign arrival is also environmental and cultural the ASEAN open skies and the United States is affecting
missions and familiarization
the park is more important. lowered to 17 million. conservation. policy. Indonesia’s exports.
trips to raise interests.
JANUARY 2019 FEBRUARY 2019 • The Betawi• Cultural APRIL 2019 JUNE 2019 BALI INFRASTRUCTURE JAKARTA INFRASTRUCTURE
• West Jakarta Tourism • Bali administration has Institute (LKB) held a tour • Bali is looking to take • The Bali Arts Festival was UPDATE: UPDATE:
Agency collaborated drafted a bylaw to levy of ‘History of Young advantage of global held in Denpasar, with • Bali is planned to have • MRT was open for public trial
with Jeera Foundation USD 10 on each tourist for Indonesian Statesmen’, wellness tourism as it has thousands of artists 14 infrastructure run on March 12 and became
to present The Festival island preservation. The and participants were over 3,200 traditional showcasing their artwork projects between 2020- fully operational in April after
of Kali Besar to revenue will be used to invited to visit nine wellness centers. To in the month-long event. 2024, including an inauguration by Jokowi.
showcase Batavia arts fund programs to preserve historical tourism spots further develop health The theme for the year Gilimanuk-Denpasar toll • LRT has yet to set a date for its
around Jakarta to learn was Bayu Pramana road. commercial operation, but a
and culture at the end the environment and tourism, it would need to
full trial run began in April
of August. The festival Balinese culture as well as more about the history of comply with standards, (Glorifying Wind • North Bali Airport is
after standard operational
is comprised of battling excessive plastic Indonesian and the local government Resources), as the event going to started documents were approved by
numerous traditional waste. independence. is planning to regulate celebrates wind as a construction in early the Transportation Ministry.
arts and cultural the industry through a source of life. 2020 and targeted to be • Second phase of MRT project
shows, booths and bylaw that will be operational in 2025. connecting Sarinah – Kampung
bazaars. finalized by year end. Bandan will start at the end of
2019.
Legend:
Indonesia Snapshot
Jakarta Snapshot
Bali Snapshot
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JAKARTA & BALI HOTEL MARKET UPDATE
H1 2019
Foreign Arrivals to Indonesia
Source: Badan Pusat Statistik – Statistics Indonesia
Despite total foreign arrivals increasing by a small 3% in the first 5 months of 2019, Indonesia’s 2 key markets of
Jakarta and Bali are hurting, down monthly from January to May (down 12%) and February to May (down 2%)
respectively. The government is struggling to achieve their ambitious forecast of 20 million foreign arrivals in 2019
with the lowest annual increase in recent years. A few strategic plans being discussed by the Ministry of Tourism to
boost tourism arrivals include: (1) further optimizing the low-cost carrier terminals at Soekarno Hatta (terminals 1 &
2) on the back of a solid 21% increase in LCC airline travel in 2018, by comparison only 5% growth was recorded
for full-service carriers; (2) using neighboring countries such as Singapore and Malaysia as tourism hubs to promote
Indonesia as a side visit; and (3) revitalizing existing airports suffering capacity constraints such as a rumored new
terminal and runway at Soekarno-Hatta and a new airport in North Bali.
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JAKARTA & BALI HOTEL MARKET UPDATE
H1 2019
Top 5 Foreign Arrival Feeders to Indonesia (January – May)
Source: Badan Pusat Statistik – Statistics Indonesia
The foreign tourist arrivals growth to Indonesia in the first half of 2019 was fueled by a surge of inbound tourists
from Malaysia (up 23% YOY), Singapore (up 14% YOY) and India (up 10% YOY). The increase in Malaysians and
Singaporeans coincides with the government’s initiative to boost border tourism and is driven by increases through
the ports of Tanjung Uban (Bintan) up nearly 60% / 100k people and “other water gates” which are not specified,
which increased by a whopping 136% / 320k people in the first 5 months of the year. The Sumatran airports also
fared well, with Kualanamu (Medan) up 10% YOY, Minangkabau (Padang) up 24%, Sultan Syarif Kasim II (Pekanbaru)
up 33% and Sultan Mahmud Badaruddin II (Palembang) up 68%.
It is understood that many factors have contributed to the slowing in Chinese arrivals growth including a continuing
backlash against Bali’s shutdown of zero-dollar tourists, the weakening in the Chinese Yuan, constantly evolving
regional resort market and improvements in domestic tourism infrastructure. The net result was a mere 2.3%
growth for Chinese arrivals, most of whom went to Bali, but some helped boost arrivals to Sam Ratulangi Airport
(Manado) up 11% YOY. India has soared up the ranks becoming the 5th biggest contributor to foreign arrivals YTD
May 2019. The growth started back in 2016 with the commencement of direct flights from major cities in India to
Jakarta and Denpasar. It is just the beginning.
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JAKARTA & BALI HOTEL MARKET UPDATE
H1 2019
Jakarta Performance
Source: STR
Bali Performance
Source: STR
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JAKARTA & BALI HOTEL MARKET UPDATE
H1 2019
Hotel Performance, Jakarta & Bali H1 2019
The major factor affecting Jakarta & Bali’s hotel performance in H1 2019 – arguably across Indonesia – were the
games being played by the duopoly of local airlines servicing Indonesia’ domestic flights, at the expense of
Indonesians. Prices were hiked, Air Asia mysteriously disappeared from major OTAs and passenger numbers
plummeted. YTD May 2019, Jakarta’s Soekarno Hatta Airport reported a 19% decline in passengers on domestic
routes whilst Bali’s Ngurah Rai Airport recorded a 14% drop in passengers on domestic routes. Another factor that
contributed to a fall in domestic passenger numbers during the Lebaran exodus, Indonesia’s largest annual holiday
period, was the opening of the new Trans-Java toll road – or is it chicken & egg...? On the flipside, passengers on
international routes to Soeta showed only a slight fall of 1.1%.
Jakarta’s hotels in H1 experienced a decline in both occupancy and RevPAR, down 4.4% and 3.1% respectively.
Fortunately, ADR enjoyed a slight increase of 1.4%. Flight prices, the general election in April and the subsequent
riots, followed by the Ramadhan month and Eid al-Fitr, all happened in the first half of the year and negatively
affected performance with hoteliers struggling to maintain last year’s numbers. The worst month was May with
occupancy plummeting by 19% YOY, resulting in an 18% drop in RevPAR. As the graph indicates, the ADR
performance in Jakarta is quite stable month by month, ranging from IDR 1,016,632 to IDR 1,042,124.
Less domestic dominated, Bali airport’s decline in passengers on domestic routes was almost balanced by an
increase of 12% in passengers on international routes. Several airlines have opened new routes, including Garuda
Indonesia’s London-Bali route (which will now stop-over in Medan to service potential increases in tourism to Lake
Toba), VietJet’s Ho Chi Minh-Bali route, Turkish Airlines Istanbul-Bali route and Malindo’s Adelaide-Bali route.
Driven by the cancellation and rescheduling of domestic flights, the number of planes arriving in Bali fell by 5% YOY.
Bali’s YTD hotel market performance reflects all the above: occupancy down a small 2.4% while ADR was up a large
14% (more foreign, less domestic guests) with a resultant strong upsurge in RevPAR of 11%. We note: (1) that the
sample is not all-encompassing and the story at mid-tier, non-branded hotels was very different with performance
savaged by the decline in more price sensitive domestic and Chinese tour group visitors; and (2) the occupancy
bump YOY is attribute to the improved January numbers which were terrible in January 2018 following the Mt
Agung eruption and airport closure in November 2018.
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JAKARTA & BALI HOTEL MARKET UPDATE
H1 2019
Bali and Jakarta are chalk and cheese markets and the above graphs, using similar axes indicate the price inelasticity
and seasonality of Jakarta v Bali. Looking forward, the market is very optimistic about H2 in Jakarta with President
Jokowi being voted back for another 5-year term and improved economic stability forecast + a real focus on tourism
from the Central Government. The hotel market in Bali, however, is confused and no-one really knows what to
expect over the current high season and for the remainder of 2019.
New Hotel Supply & Expected Developments
In H1 2019 Horwath noted 6 hotel openings in Jakarta, adding 1,364 keys and 4 hotel openings in Bali, adding 781
new room keys, including Alila adding 64 keys to its inventory.
Hotels Opened in H1 2019
Jakarta Hotels Star Keys Location Bali Hotels Star Keys Location
Q1 Q1
Kyriad Metro Cipulir 3 156 South Kanvaz Village Resort Bali 4 147 Seminyak
Holiday Inn & Suites Gajah Mada 4 442 West The Apurva Kempinski Bali 5 475* Nusa Dua
Q2 Q2
Ibis Styles Jakarta Tanah Abang 3 201 Central Studios @ Alila Seminyak 5 64 Seminyak
Mercure Jakarta Gatot Soebroto 4 253 South Anja Jimbaran 4 37 Jimbaran
Aston Kartika Grogol 4 189 West X2 Bali Breakers Resort 5 58 Jimbaran
Artotel Wahid Hasyim 3 123 Central Total H1 2019 781
Source: Horwath HTL – Research, STR
Total H1 2019 1,364 * staggered opening, with 321 open to end July
Hotels Opening in H2 2019
Jakarta Hotels Star Keys Location Bali Hotels Star Keys Location
Mercure Jakarta Batavia 4 376 North Aloft Bali Seminyak 3 80 Seminyak
Park Hyatt Jakarta 5 221 Central Shangri-La Bali Resort & Spa,
The Maj Nusa Dua Bali 5 339 Nusa Dua
Swissôtel Jakarta PIK Avenue 4 412 North
Fairfield Inn Kuta 3 222 Kuta
Aloft Jakarta Simatupang 3 180 South
Anantara Ubud Bali Resort 5 70 Ubud
Crowne Plaza Jakarta Residences 4 214 South
Novotel Cikini 4 245 Central Jumeirah Bali 5 123 Pecatu
Aston Sunter 4 180 North Potato Head Hotel 5 140 Seminyak
NEO Puri Jakarta 3 96 West Total H2 2019 974
Source: Horwath HTL – Research, STR
Total H2 2019 1,924
The Mercure Jakarta Batavia opened its doors on 19 July 2019 after a major refurbishment and rebranding from
what was the Omni Batavia Hotel. The new flagship for tourism in Jakarta’s Kota Tua (Old Town) blends old with
new and has a large inventory of 376 rooms. It is a lot of new rooms for both Jakarta and Bali and there is no doubt
that the list is not exhaustive! The real winners are hotel guests who will benefit from the ongoing performance
battles.
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JAKARTA & BALI HOTEL MARKET UPDATE
H1 2019
Jakarta Sub-Markets
The Jakarta hotel market is corporate, and
MICE driven, with very little leisure RND
generated, limiting weekly/annual occupancy.
That said, H1 2019 was more miserable than
normal with falls recorded in each sub-
market across the Big Durian. As mentioned
above, this was the result of an election,
Source: STR
some riots, Ramadan and Eid (although these
also occurred in H1 2018 so that is a
spurious argument).
Small ADR improvements were recorded in
most sub-markets but insufficient to offset
occupancy falls so RevPAR fell in each area
other than North Jakarta.
Source: STR
Fortunately, H2 is always better, which will
be important to counteract the addition of
2,000 more rooms over the 6-month period.
Source: STR
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JAKARTA & BALI HOTEL MARKET UPDATE
H1 2019
Bali Sub-Markets
Despite the overall drop in Bali’s
occupancy in H1, there were some
regional winners including Ubud and
the Bukit (Jimbaran, Pecatu, Ungasan).
As mentioned above, ADR was up for
Bali in H1 2019 and as seen here, that
was evenly spread across all sub-
Source: STR
markets. The biggest winner was the
Bukit (Jimbaran/Pecatu/Ungasan) which
blew it out of the water with a 21%
increase in ADR & a resultant 29% hike
in RevPAR. Followed very closely by
Ubud.
Sleepy Sanur lived up to its reputation,
having a difficult first half, with a fall in
Source: STR
RevPAR driven entirely by a large
decline in occupancy.
Overall, the STR sample of Bali hotels
recorded improvements in RevPAR in
H1 2019, which is encouraging, but
arguably not the full picture.
Source: STR
Horwath HTL STR
Yudita Budijanto Veranica Maidangkay
Research Analyst Business Development Manager
+62 21 2598 2532 +62 21 2598 2533
[email protected] [email protected] www.horwathhtl.asia www.strglobal.com
www.horwathhtl.com
Cover Photo:
Hendra Yudha Pratama
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