Indonesian Hotel Sector set for 10% revenue growth by 2016

Bali – March, 2014 – A summit of over 200 leading Indonesian hospitality professionals has delivered a positive outlook for the local industry, stating their belief that the Indonesian hotel sector will grow its revenues by 10% over current levels by 2016.

The ‘Driving Hotel Revenue – Indonesia Summit’, organised by IDeaS Revenue Solutions, the leading provider of pricing and revenue management software, services and consulting, drew together leading hotel owners, general managers, revenue managers and sales directors from across Indonesia for key educational sessions. The educational sessions focused on instilling a mindset change amongst local hoteliers so that they are not only looking at occupancy, but also how to price their hotels for success with new strategies and systems.

According to the summits respondents, the overall positive growth predicted for the Indonesian hotels sector would largely be driven through better operating processes and newer technologies.

‘The outlook for the Indonesian hotel sector was largely positive at the summit, however what became clear was that a 10% revenue growth (or more) wasn’t just going to fall into every hotel operators lap. Hoteliers need to enhance their understanding and approach to revenue management so that properties are pricing themselves correctly,”’ said Adwien Dhanu, President, Jayakarta Hotels & Resorts. “Given the current issues around oversupply, the government should look to curb new development until occupancy levels recover and more work also needs to be carried out to improve tourism infrastructure generally including traffic management in the Legian area.”

“The ‘Driving Hotel Revenue – Indonesia Summit’ was a timely reminder of the potential opportunities and challenges faced by local hoteliers. While there are fast maturing hotel markets like Jakarta, Bali, Surabaya and Bandung in Indonesia, where maneuvering new hotel projects can be precarious, I believe opportunities in this vast archipelago are still plentiful but one must be observant and thorough,” said Rio Kondo, Vice President Development Indonesia & Malaysia, Accor.

In addition to overall revenue growth, another area expected to deliver significant benefits to Indonesian hoteliers is the growth in digital hotel bookings, with the summit attendees predicting that bookings from online sources would increase by 40% by 2016.

“It is important that Indonesian hoteliers grasp these changing booking patterns and are able to capitalise on the expected strong growth on this area through having the right strategies and systems in place to determine the best rate for their rooms at any given time and to be able to get these to market in a timely manner,” said Philip Stanley, Regional Director of Sales, IDeaS – a SAS Company.

Although the overall outlook for the Indonesian hotel sector is positive, the summit did also look at key challenges faced by local hoteliers with 70% of the 200 hotel professionals in attendance highlighting that ‘increased competition from global hotel chains’ and ‘an excess of hotel rooms currently on the market’ were the two biggest issues to be faced by Indonesian hoteliers in the coming years.

IDeaS is committed to working closely with hotel organisations throughout Indonesia and the Asia-Pacific region to support them in reaching their optimal revenue and profit levels by focusing on education which supports the development of a strong revenue management culture.