Positive Trend in Jakarta’s Hotel Sector

Early last month PT Lippo Karawaci Tbk. announced that it had reached an agreement with Marriot International Inc. to build two JW Marriot Hotels. One of them will be The JW Marriot Hotel West Jakarta St. Moritz in the St. Moritz superblock of Lippo Karawaci in Puri Indah in West Jakarta. The other will be The JW Marriot Hotel Jakarta Kemang Village in the Kemang Village superblock in South Jakarta. The JW Marriot Hotel St. Moritz will have 208 rooms while the one in Kemang will have 275 rooms.

“We are so enthusiastic about the presence of The Marriot Hotel West Jakarta St. Moritz and The JW Marriot Hotel Jakarta Kemang Village because both will be five-star hotels and will be located outside the CBD golden triangle,” said Michael Riady, CEO of The St. Moritz and Shopping Mall Group.

According to Michael, the two hotels will materialize Lippo Group’s plan of applying international standards at the two property mega projects. Investments of the two hotels are estimated at no less than Rp 1 trillion. The JW Marriot Hotel West Jakarta St. Moritz and The JW Marriot Hotel Jakarta Kemang Village will help improve the image of Puri Indah and Kemang as luxury area in Jakarta, equaling other elite real estate areas in the capital.

A positive trend in the hotel sector was clearly shown visible through a research conducted by Colliers International Indonesia, whose results were published in May of this year. Example, 5-star hotels in CBD with total rooms of 6,962 in Q-1 2011 achieved 65.1% occupancy with room tariffs averaging Rp 971,106 per night. In South Jakarta (excluding CBD), there were 536 rooms of 5-star hotels that were offered at Rp 921,534 per night and achieved 67% occupancy on average. Meanwhile, in Central Jakarta (excluding CBD), the occupancy of 5-star hotel rooms was 62.7% on average and they were sold at Rp 659,598 per night.

Four-star hotels also achieved positive growth. The occupancy of the 1,570 rooms of 4-star hotels in CBD Jakarta averaged 73.5% in Q-1 2011, while their tariffs were Rp 531,085 per night on average. It was followed by South Jakarta (695 rooms; 71% occupancy; Rp 570,202 per night); Central Jakarta (4,193 rooms; 63.7% occupancy; Rp 433,403 per night); North Jakarta (888 rooms; 71.2% occupancy; Rp 493,972 per night); and West Jakarta (1,926 rooms; 70.5% occupancy; Rp 501,667 per night).

Even 3-star hotels recorded quite high occupancy in Q1-2011. Example, in South Jakarta, 3-star hotels reached 1,349 room in total, and their occupancy averaged 71.3% while their room tariffs averaged Rp 383.088 per night. Central Jakarta had 2,344 rooms with their tariffs averaging Rp 302,731 while their occupancy was 68.7% on average. In North Jakarta, there were 454 rooms with their occupancy reaching 77.1% and their room tariffs averaged Rp 338,835. Meanwhile, East Jakarta had 158 rooms in total, which were priced at Rp 289,216, with their occupancy averaging 68%.

In 2013, two new hotels will start operation in Jakarta namely the 123-room Santika Hotel in Indonesia Miniature Park (TMII) in East Jakarta; and the 275-room Hotel Jakarta Kemang Village. In 2014, a new five-star hotel, The Regatta, will commence operation. It will have 152 rooms. Meanwhile, in 2015 JW Marriot Hotel West Jakarta St. Moritz in the St. Moritz superblock will enter the market. It will have 208 rooms.

the operator of JW Marriot Hotel West Jakarta St. Moritz, which is located in Puri Indah in West Jakarta, needs to work extra hard to market it if they want to become a key player in the international MICE market. This is because, despite its five-star status, seminar organizers will prefer holding meetings at 5-star hotels in CBD Jakarta like Hotel Indonesia Kempinski, Ritz Carlton, Grand Hyatt, Shangri-La, Four Seasons Hotel and Hotel Mulia Senayan.