Hotel Destinations Indonesia - JLL Asia Pacific ...€¦ · Hotel Destinations Indonesia 05 The...

Hotels & Hospitality Group | May 2016

Hotel Destinations Indonesia

Bali

Jakarta

SurabayaBandung

Lombok

Hotel and Hospitality’s Timeline

1994First Inna Group hotel – Bali Hotel

First IHG hotel – InterContinental Bali

Development of theNusa Dua integrated resort project

1973

First Hyatt hotel –Bali Hyatt

First Hilton hotel – Hilton Jakarta

First Mandarin Oriental hotel – Mandarin Oriental Jakarta

First Melia hotel – Bali Sol Hotel

Lombok International Airport - Bandara Internasional Lombok

Bali International Airport upgraded

• Easing of visa requirements for foreign visitors• Initiative to upgrade ten tourist destinations:

Lake Toba (North Sumatra), Tanjung Kelayang (Belitung), Tanjung Lesung (Banten), the Thousand Islands (Jakarta), Borobudur Temple (Magelang), Mount Bromo (East Java), Mandalika (South Lombok), Labuan Bajo (East Nusa Tenggara), Wakatobi (Southeast Sulawesi), and Morotai (North Maluku)

Proliferation ofLow Cost Carriers

• First Alila hotel –Alila Jakarta

• First Marriott hotel –JW Marriott Jakarta

1927

1997

2000’s2011

2013

2014

1976

2001

1991

1960s1979 1985

1970s

1981

First Starwood hotel –Sheraton Senggigi Beach Resort Lombok and Sheraton Laguna Hotel Bali

• First Accor hotel –ibis Jakarta Kemayoran

• First Shangri-La hotel – Shangri-La Jakarta

Legends

2019

Targets 20 million international visitor arrivals

First Carlson Rezidor hotel – Radisson Benoa and Radisson Legian

20162015

First Tauzia hotel –Harris Resort Batam Waterfront

2002

1995

First Four Seasons hotel – Regent Jakarta

JLL in BaliFirst Archipelago hotel - Grand Aston Bali

1998

Hotel Openings

Other Developments

JLL expands into Indonesia in association with PT Procon Indah

International visitor arrivals exceeded 9.7 million

2018

18th Asian Games Jakarta-Palembang

15 new airports across Indonesia and the Light Rail Transit in JakartaJLL celebrates

35 years inIndonesia

Visa waiver for169 countries

JLL in Surabaya

Transportation

Visitor Arrivals

Contents

16 Quick Facts

17Contributors

04The Journey So Far...

06 What’s Next For Indonesian Hospitality?

10 Indonesia’s Key Destinations

City Profiles

Bali 11Jakarta 12Lombok 13Surabaya 14Bandung 15

11

08Hotel and Hospitality’s Timeline

The Journey So Far...

05Hotel Destinations Indonesia

The tropical island of Bali is a dream destination regularly featured on the cover of glossy travel magazines. It offers an alluring mix of equatorial landscapes, white-sand beaches, luxury hotels and resorts, plus dining, shopping and nightlife. But it wasn’t always that way. Tourism and hospitality are relatively young industries in Indonesia, and Bali is the shining jewel.

In 1971, Indonesia’s government undertook a study to determine the potential of Balinese tourism to create employment, support economic development and place Indonesia on the global travel map. The Bali Tourism Development Corporation was established to deliver the Nusa Dua Master Plan, and convert a coastal village in the south of the island into a vibrant destination with deluxe hotels by Indonesian and global brands, plus conference facilities, golf, watersports and nightlife.

The success of Nusa Dua resulted in improved infrastructure and more southern coastal towns being developed for tourism during the 1990s. Chic hotel resort designs became influenced by Balinese art and culture. As more tourists arrived, Bali promoted itself assertively to compete with popular Asian island destinations, such as Phuket and Koh Samui, and new players like Sri Lanka, Boracay and Langkawi.

In the early 2000s, a commodities-driven economic boom and a soaring Australian Dollar saw visitation from Australia rise significantly. More recently, in 2013, Ngurah Rai International Airport was expanded ahead of the APEC Summit in Nusa Dua to facilitate more flights from Asia and Australia. Combined with Nusa Dua, thriving resorts like Kuta and Jimbaran, offering fine beaches, hotels, shopping and nightlife, and surfing hotspot Seminyak, which has transformed into a gourmet destination, have made Bali the poster child of Indonesian leisure tourism.

Alongside the high expectations for inbound tourism is a strong, fast-growing domestic tourism sector. Visitor dynamics are evolving 40 years after Bali kick-started Indonesian tourism. In 2015, it received 7.15 million domestic visitors, an 11.77% yearly growth, and four million international visitors. Geographically close to Bali, Australia has been the premier inbound market, generating almost one million annual arrivals, followed by Japan, China, Malaysia and South Korea. Pillar regional markets are now growing fast and hoteliers are predicting sustained arrivals growth from India.

“The good news is that more visitors are coming to Bali each year, not just for the first time, but also as repeat guests. Conventions and incentives business are also showing a strong increase year to year,” says Ricky Putra, Chairman of the Bali Hotels Association (BHA), which represents more than 100 star-rated hotels.

The BHA liaises with Balinese authorities to provide the hospitality sector’s viewpoint on important issues, such as infrastructure development, sustainability and tourism promotion. “The big challenge over the last three years has been the increased supply of hotel rooms,” says Mr Putra. “We now have about 130,000 rooms in Bali, with more hotels opening in 2016. This fast rate of supply growth has put downward pressure on occupancies and average rates.”

Mirroring the rise of Bali as a holiday retreat, the fast-changing capital Jakarta has established itself as a business and city-break destination in South East Asia’s competitive travel landscape. In recent years, Jakarta has become a pivotal hub for regional low-cost carriers and international airlines, and its

dynamic profile as a city of business, leisure and retail has attracted a broad-based hospitality mix comprising international hotel brands and successful homegrown operators.

“The growth of the hotel industry has been very fast in Jakarta and Bali, which are now well-known destinations, but Indonesia offers a diversity of exotic experiences,” says Djodi Trisusanto, Chief Operating Officer of PT. Hotel Indonesia Natour, which operates 12 hotels in select locations, including Jakarta, Bali, Yogyakarta and Medan.

As travel patterns diversify, Indonesia wants visitors to explore more of the world’s largest archipelago, which comprises 17,508 tropical islands. “There are very few places in the world that can boast the diverse selection of tourism experiences that Indonesia offers. With eight sites on the World Heritage List, it offers an abundance of opportunities in the tourism and hospitality, and its related investment sectors”, says Corinna Toh, Executive Vice President Strategic Advisory at JLL Hotels & Hospitality Group.

With Indonesian tourism on an upward curve, more destinations want to follow in the footsteps of Bali and Jakarta. “We are starting to see more demand for good quality hotels, especially in the mid-market segment, in places like Yogyakarta, Lombok, Raja Ampat, East Java and South Sumatra,” says Mr Trisusanto.

From its humble beginnings, the Indonesian tourism industry now plays a significant role as a pillar of the Indonesian economy. Led by Bali and Jakarta, the past four decades have witnessed a transformation of tourism and hospitality in Indonesia.

As incomes grow, more domestic tourists will explore the Indonesian archipelago, and the accommodation preferences of Asia’s affluent short-break vacationers will further evolve. Tourism growth in Indonesia has painted a bright picture, but hoteliers will need to engage their creative capacities to anticipate new trends and developments.

“There are very few places in the world that can boast the diverse selection of tourism

experiences that Indonesia offers. With eight sites on the UNESCO World Heritage

List, it offers an abundance of opportunities in the tourism and hospitality, and its

related investment sectors.”Corinna Toh

Executive Vice President, Strategic Advisory at JLL Hotels & Hospitality Group

What’s Next For Indonesian Hospitality?


Few countries in Southeast Asia have the many distinct cultures, traditions, natural beauty and vitality of Indonesia. While Bali and Jakarta are shining examples of the success of Indonesia’s tourism industry, the world’s largest archipelago has far more to offer. Mark Edleson, President, Commune Hotels and Resorts, which includes the ultra-luxe Alila brand commented, “Indonesia still has a lot of exotic destinations, with the history, with the culture, with natural beauty to be developed, and they are becoming more accessible.”

This abundance of opportunity is reflected in Indonesia’s tourism master plan which seeks to steer tourists deeper into the wider expanse of Java and Sumatra as well as Sulawesi, Nusa Tenggara, Maluku and Papua.

Jumping into the fray

Indonesia welcomed almost 10 million arrivals in 2015, with 12 million predicted for 2016, and a target of 20 million set for 2019. To achieve this, the government has waived visas for tourists from 169 nations, increased marketing promotions on destinations and further relaxed foreign ownership rules in tourism-related assets. And working in favor of the government’s plan is the growing interest among global and Asia Pacific investors for both hotel assets and operating tourism businesses.

“Indonesia now features as a key growth market for most of the global hotel brands,” says Tony Ryan, Managing Director, Global Mergers & Acquisitions at JLL Hotels & Hospitality Group. While Indonesian hoteliers are more competitive in the 3- and 4-star market segment, foreign operators typically have a stronghold in the boutique and luxury category. However this is set to change as local and foreign hoteliers are looking to expand their footprint across all segments.

Already, Waldorf Astoria, Rosewood, Six Senses and Langham are planning to open hotel projects in Jakarta and Bali. Hilton is expanding in Indonesia with two projects in Surabaya and Marriott is opening its chic boutique brand, Moxy, in Bandung. Alila, which currently manages eight boutique luxury hotels and resorts and a luxury cruise in Indonesia, is also opening another hotel development in Jakarta this year and Bintan in 2017.

Indonesian developers have played a key role in the growth of the industry to date. Typically, family-owned conglomerates dominate many of Indonesia’s large corporations and the tourism/hotel division of the company is often just one part of a major conglomerate. As the second and third generation of business leaders evaluate their overall portfolios, “restructuring of hotel assets through disposal, joint venture or rebranding could be effective levers for them to optimise their holdings,” says Adam Bury, Vice President, Investment Sales, Asia at JLL.

Still, the government will look to address the requirements of investors “including enhancements to land tenure and title, financing, local licensing and regulatory issues, as well as improving security concerns for the overall industry,” adds JLL’s Bury.

Plugging the gap

While there is promising potential to vastly increase the number of destinations and advance new aspects such as marine tourism, the lack of adequate infrastructure in Indonesia has been a bottleneck to its development.

The government is already moving to plug the infrastructure gap and has allocated US$1 billion1 this year to improve safety for land, sea and air transport, including airport runways, terminals, and air navigation systems. Indonesia’s Minister of Transportation Ignatius Jonan also pledged that the government is committed to build 15 new airports by 2018. Existing terminals and runways including those in Bali, Jakarta and Labuan Bajo are being upgraded and expanded to accommodate more flights. Better roads and highways are also being constructed across the archipelago and ferry services improved to connect the various islands.

Mark Edleson, reflecting on his more than 40 years working experience in Indonesia, noted that “a successful platform to initiate investment in the

1970s and ‘80s was the Nusa Dua project”. As part of a master plan for the development of tourism in Bali2, the project, with good infrastructure and land titles, brought in the global brands that helped kick-start international tourism. “It also started changing (Bali) from a village-based culture to an attraction-based culture,” adds Commune’s Edleson.

This approach has been replicated in Lombok. “Lombok is one area where the government has outlined to improve tourism infrastructure and you have to give the government credit that they recognise that, but it doesn’t happen overnight,” says Bury.

Changing tourist profile

Over the decades, the tourism industry has grown manyfold in Indonesia. It commands a large share of the Southeast Asian tourism market (coming in fourth in travel and tourism competitiveness3 among Southeast Asian countries) even with increasing competition from emerging destinations such as Vietnam, Cambodia and Myanmar.

Opportunities for the hospitality sector will emerge as new visitors are channeled into new tourism hotspots, where land values are cheaper than Bali and Jakarta. International visitor arrivals in Indonesia rose 4.14 percent in the first quarter this year to 2.41 million, despite the impact of security concerns in Jakarta. For the first time in February this year, Mainland China5 became the top source country for foreign visitors in Indonesia, followed by Singapore, Malaysia, Australia and Japan. Indeed, a strong and sustainable intra-regional tourists flow is a positive development. Investors and developers should pay close attention to the changing travel demographics.

Locally, Indonesia’s Generation X and Y are increasingly keen to explore new destinations, both overseas and throughout Indonesia. They travel independently or in small groups, are heavily influenced by social media and have specific demands for the design and services at the hotels they choose. “Most of the savvy operators and owners have recognised the need to diversify demand sources in order to grown and limit the impact of external demand shocks,” says Ryan. “Now is the time to look and be ready for the next big trend.”

Recognising the importance of meetings and conventions, the government recently established an Indonesia Convention and Exhibition Bureau6 to strategise development of the meetings, incentives, conventions and exhibitions industry. There is also the potential to further develop Islamic tourism where there are large visitor numbers from the Middle East, parts of Asia and even the local market.

With the support of critical government commitments and local and international expertise and investment, Indonesia’s tourism industry is going beyond Bali and Jakarta, to solidify its position as one of the region’s pre-eminent leisure and business destination.

“Indonesia now features as a key growth market for most of the global hotel brands.”

Tony Ryan Managing Director, Global Mergers & Acquisitions at JLL Hotels & Hospitality Group

References: 1 “Indonesia commits to 15 new airports by 2018”, Air Transport World, Nov. 19, 2015 2 The Bali Tourism Development Corporation website, http://www.btdc.co.id/ 3 The Travel & Tourism Competitiveness Index Ranking 2015, World Economic Forum data as of 2015 4 Statistics of Foreign Tourist Visits for March, Indonesia’s statistics bureau, May 2016 5 “More Chinese, fewer Australians visit Indonesia”, The Jakarta Post, April 1, 2016 6 “New bureau to strengthen MICE industry, lure visitors”, The Jakarta Post, March 29, 2016

Hotel and Hospitality’s Timeline

1994First Inna Group hotel – Bali Hotel

First IHG hotel – InterContinental Bali

Development of theNusa Dua integrated resort project

1973

First Hyatt hotel –Bali Hyatt

First Hilton hotel – Hilton Jakarta

First Mandarin Oriental hotel – Mandarin Oriental Jakarta

First Melia hotel – Bali Sol Hotel

Lombok International Airport - Bandara Internasional Lombok

Bali International Airport upgraded

• Easing of visa requirements for foreign visitors• Initiative to upgrade ten tourist destinations:

Lake Toba (North Sumatra), Tanjung Kelayang (Belitung), Tanjung Lesung (Banten), the Thousand Islands (Jakarta), Borobudur Temple (Magelang), Mount Bromo (East Java), Mandalika (South Lombok), Labuan Bajo (East Nusa Tenggara), Wakatobi (Southeast Sulawesi), and Morotai (North Maluku)

Proliferation ofLow Cost Carriers

• First Alila hotel –Alila Jakarta

• First Marriott hotel –JW Marriott Jakarta

1927

1997

2000’s2011

2013

2014

1976

2001

1991

1960s1979 1985

1970s

1981

First Starwood hotel –Sheraton Senggigi Beach Resort Lombok and Sheraton Laguna Hotel Bali

• First Accor hotel –ibis Jakarta Kemayoran

• First Shangri-La hotel – Shangri-La Jakarta

Legends

2019

Targets 20 million international visitor arrivals

First Carlson Rezidor hotel – Radisson Benoa and Radisson Legian

20162015

First Tauzia hotel –Harris Resort Batam Waterfront

2002

1995

First Four Seasons hotel – Regent Jakarta

JLL in BaliFirst Archipelago hotel - Grand Aston Bali

1998

Hotel Openings

Other Developments

JLL expands into Indonesia in association with PT Procon Indah

International visitor arrivals exceeded 9.7 million

2018

18th Asian Games Jakarta-Palembang

15 new airports across Indonesia and the Light Rail Transit in JakartaJLL celebrates

35 years inIndonesia

Visa waiver for169 countries

JLL in Surabaya

Transportation

Visitor Arrivals

Bali

Jakarta

SurabayaBandung

Lombok

10 Hotel Destinations Indonesia

Indonesia’s Key Destinations

rooms306

rooms240

rooms222

rooms292rooms rooms

134rooms60


HIGHLIGHTS

BaliKnown as the island of the gods, Bali is one of the most popular tourist destinations in the world. Few places on earth are blessed with the amount of sandy beaches, rugged coastlines, lush rice terraces, barren volcanic hillsides, panoramic views, art galleries, local traditions, culture and nightlife that Bali has to offer. On top of all this, Bali is benefiting from increased domestic and international visitor arrivals thanks to continuous infrastructure improvements, increased air connectivity and a relaxation of visa requirements.

Tourism Demand Supply OutlookFor the tenth consecutive year,

international visitor arrivals to Bali increased year-on-year (y-o-y) in 2015. Despite the flight disruptions caused by the volcanic eruptions of Mount

Raung and Mount Rinjani during 2015, international visitor arrivals to Bali

increased 6.2% y-o-y to reach four million. The growth in visitor

arrivals can be attributed to the easing of visa requirements, which as of April

2016 is applicable to nationals of 169 countries.

In 2015, the fastest growing source markets to Bali were the United

Kingdom, United States and Mainland China, which increased 31.9%, 19.8%

and 17.3% y-o-y respectively, due to the visa waiver initiatives. As at YTD March

2016, visitor arrivals from Mainland China increased 29.0% y-o-y, overtaking Australia as the leading source market to Bali. Together, Mainland China and Australia accounted for approximately 45.9% of all international visitor arrivals

as at YTD March 2016.

From 2016 to 2019, the upcoming supply of international branded hotels in Bali

is estimated at 9,500 rooms, which will increase by a compound annual

growth rate (CAGR) of 9.1%, if all hotels materialise. Notable new hotel brands

expected to debut in the next few years include Six Senses, Rosewood and the

Waldorf Astoria.

Moving forward, visitor arrivals are expected to increase, facilitated by improvements in air connectivity,

the implementation of the visa-free policy for citizens of 169 countries

and the boost in Indonesia’s annual tourism marketing budget to three

trillion Rupiahs. In the medium term, the supply pipeline is significant and is likely to place pressure on the overall hotel market performance, however

growing demand will gradually absorb incremental supply.

Renaissance Bali Uluwatu Resort & Spa (2016)Mövenpick Resort & Spa Jimbaran Bay (2016)The Westin Ubud Resort & Spa (2017)

UPCOMING HOTELS

QUICK FACTS

Tune Hotels Bali Portfolio The Villas Bali Hotel & Spa

NOTABLE HOTEL DEALS

Note: Bali hotels refer to upscale stockSource: STR Global (YTD March 2016), Bali Government Tourism Office, JLLADR - Average daily rate, RevPAR - Revenue per available room ^ Statistics Indonesia - Number of rooms in classified hotel in Bali Province

4.0 millionInternational Visitor

Arrivals (2015)

2,785 roomsNumber of New Rooms^

(2015) RevPAR

IDR

1.2 million62.9%Occupancy

NEW HOTELS

ADR

IDR

1.9 million

Alila Seminyak Bali Wyndham Tamansari Jivva Resort Bali

Hilton Garden Inn Bali Ngurah Rai Airport

ibis Styles Bali Petitenget

Mandapa, a Ritz Carlton Reserve

rooms306

rooms380

rooms293

rooms505rooms rooms

173rooms160


Tourism Demand Supply Outlook

As the national capital, Jakarta remains a key business gateway in

Indonesia and an important corporate destination. As at YTD March 2016,

visitor arrivals decreased 3.5% y-o-y, due to the bombing in January 2016.

Nevertheless, the government’s ongoing commitment to ease visa requirements

together with the increase in flight connectivity between Jakarta and major

gateway cities, including new flights to Guangzhou as of August 2015 and London as of March 2016, will help to

boost visitor arrivals.

In 2015, international visitor arrivals to Jakarta grew modestly by 2.6% y-o-y to reach 2.3 million. The majority of the top 10 source markets registered increases

including Mainland China (+23.3% y-o-y) and South Korea (+11.7% y-o-y) driven by the government’s visa waiver policies. Additionally, the development of Shari’ah tourism has also supported

the increase in tourists from Middle Eastern countries, with Saudi Arabia

registering a 7.8% y-o-y increase in 2015.

Majority of the new supply which entered the market in 2015 was in the

economy and midscale sector with the exception of the 173-room Raffles Hotel and the 380-room Fairmont Hotel which

were the only two luxury hotel openings. Looking forward, approximately 2,300 international branded hotel rooms are expected to enter the market in 2016,

representing a y-o-y increase of 6.0% if all projects materialise. Notable luxury hotel openings in the pipeline include

the 283-room The Westin Jakarta and the 125-room Four Seasons Hotel

Jakarta.

In the lead up to the 2018 Asian Games, which will be hosted in Jakarta, the

city’s tourism market will benefit from increased air connectivity and improved

public infrastructure, including the development of a light rail system.

Hotel trading performances is likely to remain modest due to the significant

supply of new hotels expected to enter the market over the next few years. Nevertheless, the entry of new hotel

brands will help to diversify the tourism offerings which, in conjunction with the visa waiver policies, will help to boost

visitor arrivals.

Four Points by Sheraton Jakarta, Thamrin (2016)Four Seasons Hotel Jakarta (2016)The Westin Jakarta (2016)

UPCOMING HOTELS

QUICK FACTS

HIGHLIGHTS

JakartaPrimarily a city of government, business, industry and trade, Jakarta is also the main gateway to Indonesia’s many tourism destinations. Although the capital of the world’s fourth most populous nation is seldom viewed as a centre for tourism and culture itself, efforts to improve the city’s reputation as a service and tourism city have been stepped-up. In recent years, Jakarta has expanded its facilities for visitors by developing new multi-star luxury hotels, entertainment centres, fine restaurants as well as tourist attractions in an effort to boost visitor arrivals.

NOTABLE HOTEL DEALS

NEW HOTELS

2.3 millionInternational Visitor

Arrivals (2015)

3,507roomsNumber of New Rooms

(2015)^RevPAR

IDR

1.2 million52.2%Occupancy ADR

IDR

2.3 million

Note: Jakarta hotels refer to upscale stockSource: STR Global (YTD March 2016), Statistics Indonesia, JLLADR - Average daily rate, RevPAR - Revenue per available room

^ Statistics Indonesia - Number of rooms in classified hotel in DKI Jakarta Province

Fairmont Jakarta Sheraton Grand Jakarta Gandaria City

Grand Mercure Jakarta Kemayoran

Raffles Jakarta Holiday Inn Express Jakarta Wahid

Hasyim


HIGHLIGHTS

Since the construction of the new Bandara International Lombok Airport in October 2011, international visitor

arrivals to Lombok have surged. From 2011 to 2015, international arrivals increased by a compound annual

growth rate (CAGR) of 40.7%. In 2016, the government earmarked Lombok as one of ten emerging destinations

in Indonesia, which will further boost the attractiveness of the Island to both

foreign and domestic visitors.

In 2015, international visitor arrivals to Lombok increased marginally by 0.5%

y-o-y, as demand was temporarily dampened due to the volcanic activity from Mount Rinjani in November 2015. Nevertheless, the market has quickly recovered as reflected in the robust

growth in visitor arrivals during the first quarter of 2016, increasing 42.3% y-o-y.

The majority of existing hotel supply in Lombok comprise locally branded owner-operator hotels and resorts.

International branded hotels are limited and currently include the Sheraton

Senggigi, the Oberoi Lombok and the Novotel Lombok. Looking forward, the

development the Mandalika Project, an integrated tourism hub, will feature a

number of international branded hotels including the 250-room Pullman and the

400-room Club Med as well as luxury residences, a golf course and various

retail and dining facilities.

Moving ahead, visitor arrivals to Lombok are expected to grow, driven by the

government’s visa waiver policies and increased destination marketing efforts including the promotion of halal tourism

to attract Middle Eastern tourists. The Mandalika Project is expected to facilitate tourism growth in Lombok, if it successfully completes, and further

demonstrates the government’s ongoing willingness to invest in the tourism

industry outside of Bali and Jakarta. Improved infrastructure and the entry of international hotels under the proposed

development is expected to enhance the tourism offering and landscape of

Lombok.

Melia Lombok Tangkong (2018)Pullman (2018)Renaissance Lombok Gili Trawangan (2020)

UPCOMING HOTELS

QUICK FACTS

LombokLocated to the west of Bali, Lombok is a tropical island in the West Nusa Tenggara province of Indonesia. Offering natural landscapes, a traditional way of life and diverse flora and fauna, Lombok has captured the growing attention of domestic and international visitors. In recent years, Lombok’s popularity as a resort destination has increased as travellers relish in the tranquillity and natural beauty that the island has to offer.

NOTABLE HOTEL DEALS

NEW HOTELS


70,217International Visitor

Arrivals (2015)

793 roomsNumber of New Rooms

(2015)^ RevPAR*

IDR

911,00068.0%Occupancy* ADR*

IDR

1.3 million

Note: Lombok hotels refer to marketwide stockSource: Tourism Industry Association, Statistics Indonesia, JLLADR - Average daily rate, RevPAR - Revenue per available room

^ Statistics Indonesia - Number of rooms in classified hotel in Nusa Tenggara Barat Province* Based on JLL estimates of Lombok Resorts 2015

Zmax D Hotel Praya Katamaran ResortGolden Tulip Hotel

rooms138

rooms104

rooms164

rooms132

rooms236rooms


HIGHLIGHTS

In 2015, Surabaya welcomed approximately 200,851 international

visitors. According to the Directorate of Civil Aviation, domestic travellers account for approximately 90% of total arrivals. In 2013, the Surabaya Juanda International Airport completed its expansion with the

construction of Terminal Two which is now dedicated to serving international flights. Currently, Surabaya is serviced

by international flights to Singapore, Malaysia and Hong Kong.

As one of the primary business destinations after Jakarta, Surabaya’s

tourism market is dominated by corporate and meetings, incentives, conventions and exhibitions (MICE)

demand, especially from the domestic market. Surabaya is also a domestic

leisure destination popular for its retail offerings and is the gateway to Mount

Bromo, a popular tourist attraction, approximately four hours drive from the

city.

The existing hotel supply in Surabaya is currently dominated by local owner operator hotels. In 2015, the majority of the supply additions to the market were in the economy and midscale

sector including the 236-room Holiday Inn Express Surabaya Centre Plaza and

the 132-room Ibis Styles Jemursari. International hotel brands expected to debut over the next few years include the Four Points by Sheraton and the

Doubletree by Hilton Surabaya.

Improvements to infrastructure and new visa-free entries for key source

markets are expected to support international visitor arrivals to Surabaya

in 2016 and beyond. Given the strong presence of manufacturing, trade and industries within the city, Surabaya’s

tourism market is expected to continue to be dominated by domestic corporate

demand which will benefit from a stronger economic growth outlook.

Four Points by Sheraton (2016)DoubleTree by Hilton Surabaya (2017)

UPCOMING HOTELS

QUICK FACTS

SurabayaKnown as the “city of heroes” due to the historical battle for Indonesia’s independence, Surabaya is one of the country’s key economic and commercial centres. With a population of approximately 2.8 million, Surabaya is the second largest city in Indonesia. The city has a well-established infrastructure system and is accessible by land, sea and air transportation systems. Surabaya is also one of South-East Asia’s busiest seaports, facilitating a range of principal exports including sugar, tobacco and coffee.

NOTABLE HOTEL DEALS

NEW HOTELS



Arrivals (2015)

2,017 roomsNumber of New Rooms

(East Java) (2015)^ RevPAR*

IDR


IDR

400,000

Note: Surabaya hotels refer to midscale and economy stockSource: Based on JLL estimates (YTD March 2016), Statistics IndonesiaADR - Average daily rate, RevPAR - Revenue per available room

^ Statistics Indonesia - Number of rooms in classified hotel in Jawa Timur (East Java) Province* Based on JLL estimates 2015

ibis Styles Jemursari Premier Inn Surabaya Airport

Holiday Inn Express Surabaya Centre Plaza

rooms129


Located approximately two hours’ drive southeast of Jakarta, Bandung

is an ideal retreat and weekend destination for domestic and foreign

tourists. In 2015, approximately 160,000 international visitor arrivals arrived via Bandung’s Husein Sastranegara International Airport, representing an 11.5% y-o-y decline from 2014.

The decline in arrivals may be attributed to the reduction of

Air Asia’s flight frequency between Bandung and Singapore.

Visitor arrivals to Bandung are largely dominated by domestic demand due

to the city’s popularity as a staycation weekend destination with its plethora

of affordable shopping outlets and cool temperate climate. In addition to leisure

tourism, corporate and MICE demand are becoming increasingly popular

given the ease of access from Jakarta to Bandung.

According to the Bandung Tourism Authority, there are currently 275 hotels in Bandung, the majority of which are budget and midscale hotels. In 2015, several international branded hotels opened, including the 193-room Best Western Premier and the 270-room

Crowne Plaza Bandung. Looking forward, the supply of international

hotel brands are expected to increase gradually. This includes the debut of

new brands such as the Moxy Bandung and the Innside by Melia, both of which

are scheduled to open in 2017.

Given Indonesia’s youthful demographic mix and the rising affluence of the middle

class, domestic tourism to Bandung is expected to remain robust in the medium term. Combined with Bandung’s proximity

to Jakarta and the availability of low cost carrier to many domestic cities,

visitor arrivals is forecast to increase in the future. Furthermore, infrastructure

development including the construction of the country’s first high-speed railway

connecting Bandung and Jakarta, scheduled to complete by the end of

2019, will help improve accessibility to Bandung.

NOTABLE HOTEL DEALS

Innside by Melia (2017)Moxy Bandung (2017)

UPCOMING HOTELS

QUICK FACTS

HIGHLIGHTS

BandungThe picturesque city of Bandung, capital of West Java, is imbued with lush highlands and a temperate climate. With a diverse retail and culinary offering, the city is a popular weekend and staycation destination for domestic tourists. Bandung is also one of Indonesia’s burgeoning information technology centres and features a vibrant culture of music, fashion and arts. Given its close proximity to Jakarta, Bandung is also an attractive MICE destination and the city has been host to a number of international summits including the recent Asian-African Conference in 2015.

NEW HOTELS



Arrivals (2015)

3,298 roomsNumber of New Rooms

(West Java) (2015)^ RevPAR*

IDR


IDR

448,000

Note: Bandung hotels refers to marketwide stockSource: Tourism Industry Association, Statistics Indonesia, JLL ADR - Average daily rate, RevPAR - Revenue per available room

^ Statistics Indonesia - Number of rooms in classified hotel in Jawa Barat (West Java) Province* Based on JLL estimates 2015

Best Western Premier La Grande Hotel

Bandung

Four Points by Sheraton Bandung

Crowne Plaza Bandung

rooms193

rooms162

rooms270


Quick Facts

9.7 millionh

h

3.1% y-o-y

AUSTRALIA

12.0%SINGAPORE

18.4%1 3MALAYSIA

15.7%2

1 2

1 2

1 2

1 2

1 2

7.9 million0.9% y-o-y

JAPAN

8.6%MAINLAND CHINA

22.7%SOUTH KOREA

14.2%3

29.8 millionh 20.5% y-o-y

JAPAN

4.6%MAINLAND CHINA

26.6%MALAYSIA

11.4%3

25.7 millioni 6.3% y-o-y

MAINLAND CHINA

6.5%SINGAPORE

50.3%INDONESIA

10.8%3


JAPAN

9.2%KOREA

25.0%USA

14.5%3


JAPAN

6.9%THAILAND

15.7%MAINLAND CHINA

11.4%3

International visitor arrivals 2015 Top 3 source markets in 2015

INDONESIA

VIETNAM

THAILAND

MALAYSIA

PHILIPPINES

MYANMAR

Hotel Destinations Indonesia 17

Contributors

Alison LiAssociate Strategic [email protected]

For further enquiries on hotel and hospitality advisory and investment opportunities in Indonesia, kindly contact:

Mike BatchelorManaging Director Investment [email protected]

Tony RyanManaging DirectorGlobal Mergers & [email protected]

Adam BuryVice PresidentInvestment [email protected]

Corinna TohExecutive Vice PresidentStrategic [email protected]

Adam BuryVice President Investment Sales Asia [email protected] +65 8313 4600

Corinna TohExecutive Vice President Strategic Advisory [email protected] +65 9617 3107

Tengger Semeru National Park, East Java, Indonesia

About JLL Hotels & Hospitality Group

JLL’s Hotels & Hospitality Group has completed more transactions than any other hotels and hospitality real estate advisor over the last five years, totalling more than $68 billion worldwide. Between negotiating the world’s most extraordinary, enticing, and profitable property deals, the group’s 350-strong global team also closed more than 4,400 advisory, valuation and asset management assignments. Investors worldwide turn to JLL to shape their strategies, tailor their portfolios and maximize the value of their assets. We are recognized as the global leader in real estate services across hospitality properties of all shapes and sizes. Our expert advice is backed by industry-leading research.We apply our broad spectrum of hotel valuation, brokerage, asset management and consultancy services through every phase of the hotel lifecycle. We have helped more hotel investors, owners and operators achieve high returns on their assets than any other real estate advisor in the world. Whether you are looking for a hotel or you’re ready to sell, we’ll use our capital markets expertise, hospitality industry knowledge and global relationships to put the right parties together and execute a bespoke deal that exceeds your objectives.To find out more, talk to JLL. www.jll.com/hospitality

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© 2016 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.

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