Foreign guests at star hotels in Lombok

With tourist arrivals up by over 15% in 2016 and ambitious sector development plans under way, Indonesia’s hotel segment is widely expected to see healthy expansion in the coming years. This follows on from strong performance across the hospitality industry over the past half decade.

Indeed, according to HVS Research, a global hospitality research firm, from 2011 to 2015 the total supply of branded hotel rooms in 12 key Indonesian markets more than doubled, posting a compound annual growth rate of 19%. During this period the total number of branded rooms jumped from around 35,000 to upwards of 71,000.

Today more than half of this supply is composed of midscale and budget offerings, while the upscale segment accounts for 33% and luxury properties make up the remaining 12%. Indonesia’s hotels, like the nation’s tourism industry more generally, are concentrated in Bali and Jakarta, though a number of smaller markets – including Medan, Lombok, Surabaya, Bandung, Mandalika and Palembang – have seen an increasing influx of visitors as well in recent years.