Indonesia Hospitality Real Estate Market Size (2024 - 2029)

The market size of the hospitality industry in Indonesia is poised for significant growth, driven primarily by the tourism sector. Recent regulatory changes have facilitated investment opportunities for both locals and foreigners, enhancing the appeal of the hospitality business. The country's diverse attractions, from stunning beaches to cultural experiences, continue to draw tourists, contributing to foreign exchange inflows and infrastructure development. The government's focus on promoting 'super-priority' destinations further underscores the sector's potential for expansion, with a positive investor outlook indicating robust growth in the hospitality market.

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Market Size of Indonesia Hospitality Real Estate Industry

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Indonesia Hospitality Real Estate Market Summary
Study Period 2020 - 2029
Base Year For Estimation 2023
Market Size (2024) USD 1.84 Billion
Market Size (2029) USD 3.25 Billion
CAGR (2024 - 2029) 12.07 %
Market Concentration Low

Major Players

Indonesia Hospitality Real Estate Market Major Players

*Disclaimer: Major Players sorted in no particular order

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Indonesia Hospitality Real Estate Market Analysis

The Indonesia Hospitality Real Estate Market size is estimated at USD 1.84 billion in 2024, and is expected to reach USD 3.25 billion by 2029, growing at a CAGR of 12.07% during the forecast period (2024-2029).

  • Tourism is the primary driver of this industry. Some tax and real estate rules have also been loosened, which has made it possible for locals and foreigners to invest in and buy buildings for the lucrative hospitality business in the country. Tourism brought significant foreign exchange inflows to Indonesia in the form of international tourism receipts, as well as investments and capital in tourism-related businesses. Tourism has typically resulted in infrastructure improvements for the local economy of a country.
  • Indonesia, with its expansive archipelago, entices tourists with a plethora of experiences. From idyllic beach getaways, wellness retreats, and cultural immersions to thrilling adventures, the country has it all. Notably, it boasts world-renowned dive sites like Raja Ampat. In 2021, the Indonesian Ministry of Tourism and Creative Economy earmarked five 'super-priority' destinations for heightened promotion: Labuan Bajo in East Nusa Tenggara, Lake Toba in Sumatra, Mandalika in West Nusa Tenggara, Borobudur in Java, and Likupang in North Sulawesi. A significant budget of IDR 351.6 billion was allocated in 2022 to bolster the development of these destinations.
  • According to industry sources, investors continued to hold a positive outlook on the Indonesian hotel market as of July 2023. By the end of 2024, Bali is expected to welcome six new hotels, while Jakarta will see the debut of two. Among the anticipated openings in Jakarta are the Swiss-Belhotel Kelapa Gading, boasting 316 rooms, and the Movenpick Jakarta Pecenongan, featuring 253 rooms. Indonesia's tourism sector continues to thrive, with significant investments in infrastructure and hospitality signaling robust growth. The strategic promotion of 'super-priority' destinations and the optimistic outlook of investors underscore the sector's potential for sustained economic impact.

Indonesia Hospitality Real Estate Industry Segmentation

Hospitality property means the development of real estate, the primary usage of which is as a hotel or motel, with individual rooms principally for short-term rental to tenants occupying the same.

The Indonesian hospitality real estate market is segmented by property type (hotels and accommodations, spas and resorts, and other property types). The report offers market size and forecasts for the Indonesian hospitality real estate market in value (USD) for all the above segments.

By Property Type
Hotels and Accommodation
Spas and Resorts
Other Property Types
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Indonesia Hospitality Real Estate Market Size Summary

The hospitality industry in Indonesia is experiencing significant growth, driven primarily by the booming tourism sector. The country's diverse attractions, from stunning beaches to cultural sites, have made it a favored destination for both international and domestic travelers. The government's strategic promotion of 'super-priority' destinations and the easing of tax and real estate regulations have further fueled investments in the hospitality sector. This has led to substantial foreign exchange inflows and infrastructure improvements, enhancing the local economy. The hotel market is expanding, with new developments in key areas like Bali and Jakarta, catering to both leisure and business travelers. The integration of the ASEAN economy and affordable airfares are also contributing to the sector's robust growth, despite global economic challenges.

The Indonesian hospitality real estate market is characterized by its fragmentation, with major local players and increasing interest from international investors, particularly from Asia. The market is becoming more competitive due to favorable foreign direct investment policies. The sector is witnessing a surge in new supply, especially in the midscale to upscale segments, with significant contributions from serviced apartment brands. Sustainable development initiatives are gaining traction, with companies like Sinar Mas Land leading efforts in eco-friendly practices. The opening of new properties, such as Accor's Mercure Pangkalan Bun, highlights the ongoing expansion and diversification of Indonesia's hospitality offerings, positioning the country as a key player in the regional tourism landscape.

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Indonesia Hospitality Real Estate Market Size - Table of Contents

  1. 1. MARKET INSIGHTS AND DYNAMICS

    1. 1.1 Market Overview

    2. 1.2 Market Drivers

      1. 1.2.1 Indonesia's Hospitality Market Shifting Preference for Local and Authentic Experiences

    3. 1.3 Market Restraints

      1. 1.3.1 Difficulties in Implementing Tourism Policies

    4. 1.4 Market Opportunities

      1. 1.4.1 Increase in Internet Access and Online Testimonials

    5. 1.5 Insights into Supply Chain/Value Chain Analysis

    6. 1.6 Industry Attractiveness - Porter's Five Forces Analysis

      1. 1.6.1 Bargaining Power of Suppliers

      2. 1.6.2 Bargaining Power of Buyers/Consumers

      3. 1.6.3 Threat of New Entrants

      4. 1.6.4 Threat of Substitute Products

      5. 1.6.5 Intensity of Competitive Rivalry

    7. 1.7 Insights into Technological Innovation in the Hospitality Real Estate Sector

    8. 1.8 Insights into Urban Commercial Property Prices and Recent Hospitality RE Transactions

    9. 1.9 Impact of COVID-19 on the Market

  2. 2. MARKET SEGMENTATION

    1. 2.1 By Property Type

      1. 2.1.1 Hotels and Accommodation

      2. 2.1.2 Spas and Resorts

      3. 2.1.3 Other Property Types

Indonesia Hospitality Real Estate Market Size FAQs

The Indonesia Hospitality Real Estate Market size is expected to reach USD 1.84 billion in 2024 and grow at a CAGR of 12.07% to reach USD 3.25 billion by 2029.

In 2024, the Indonesia Hospitality Real Estate Market size is expected to reach USD 1.84 billion.

Indonesia Hospitality Real Estate Market Report Snapshots

Hospitality Industry in Indonesia Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)