Indonesia Hotel Industry Faces Opportunities and Challenges (Executive Interview)

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Hotel lobby of the Radisson Blu Bali Uluwatu.

Wonderful Indonesia

Indonesia hotel industry faces challenges and opportunities as the government tries to diversify the tourism industry by developing new travel destinations. Check out what a spokesman for a major international hotel chain has to say in this exclusive interview.

Indonesia 101

Officially known as the Republic of Indonesia, Indonesia is situated in Southeast Asia between the Indian and Pacific oceans.

The island nation is the world’s fifth most populous country. It had an estimated population of 264 million in 2017, according to the Word Bank.

Indonesia is a diverse country in terms of its ethnicity and linguistics. There are more than 300 ethnic groups, and more than 700 languages are spoken.

Bahasa Indonesia is the official language. English is widely spoken in the commercial and tourism sectors.

The official currency is the Indonesian rupiah. Banknotes run from 1,000 rupiah (roughly US 2 cents) up to 100,000 rupiah (roughly US$7).

A quick guide to Indonesia follows …

Geography

Indonesia is made up of as many as 18,108 islands, and about 6,000 of them are inhabited. Many of the islands are  volcanic.

Indonesia has the world’s second longest coastline after Canada. It  has sandy beaches, verdant rain forests, and a rich mixture of flora and fauna.

Jakarta is the nation’s capital and largest city. It is located on the island of Java.

Bali is the country’s most important destination for leisure travelers.

Indonesia Tourism Industry

Tourism plays an important role in the Indonesian economy, accounting for approximately 8% of the nation’s GDP.

Malaysia, China, Singapore, Timior-Leste, Australia, India, Japan, the United Kingdom, and the United States are the country’s top 10 sources of tourism.

Bali is Indonesia’s top tourism draw owing to its stunning natural beauty and its fascinating culture.

The Indonesian government has targeted the following 10 spots for tourism development:

  • Borobudur, Central Java;
  • Mandalika, West Nusa Tenggara;
  • Labuan Bajo, East Nusa Tenggara;
  • Bromo-Tengger-Semeru, East Java;
  • Thousand Islands, Jakarta;
  • Toba, North Sumatra;
  • Wakatobi, Southeast Sulawesi;
  • Tanjung Lesung, Banten;
  • Morotai, North Maluku;
  • Tanjung Kelayang, Belitung.

Accommodation in Indonesia

The Indonesia hotel industry is highly developed, with all manner of accommodation, from five star hotels to modest guest houses.

Most of the luxurious resorts are located on the island of Bali, which is Indonesia’s leading destination for leisure travel. Hotels in Jakarta and other cities tend to cater more to business travelers.

According to the HVS Asia-Pacific Hotel Operator Guide, Indonesia had 356 hotels, and another 228 hotels were in the pipeline, as of 31 December 2017.

Bali had 96 branded properties, with 17,257 rooms. Jakarta had 80 branded properties, with 17,575 rooms.

These figures do not include the many private villas and home stays that are especially popular with leisure travelers in Bali.

Transport in Indonesia

Indonesia has dozens of airports, including well-equipped international airports with customs facilities and passport control as well as simple air fields with unpaved runways.

Each one of the major islands has at least one international airport.

Indonesia’s busiest airports are Soekarno-Hatta International Airport (CGK), which serves Jakarta, and Ngurah Rai International Airport (DPS), which serves the island of Bali.

Soekarno-Hatta International Airport is the world’s 17th busiest airport, the busiest airport in Southeast Asia, and the busiest airport in the southern hemisphere.

Indonesia’s Climate

Indonesia has a tropical climate, with little change in temperature from month to month. It is hot, humid, and rainy throughout the year.

The average daily high ranges from 86 to 90 degrees Fahrenheit (or 30 to 32 degrees Celsius).  The average low is 72 to 77 degrees Fahrenheit (or 22 to 25 degrees Celsius).

May is the hottest month; January is the coldest. The relative humidity runs from 70% to 90%.

If the temperature is relatively stable throughout the year, the climate does vary in terms of rainfall.

December to March is considered the rainy season, and January and February are the wettest months. June to September is considered the dry season. Many travelers consider this the best time to visit the country.

Because it straddles the equator, Indonesia has 12 hours of daylight all year long.

Indonesian Visas

Travelers from 170 jurisdictions can visit Indonesia without a visa for up to 30 days. If you overstay your visa, you will have to pay a fine.

Passports must be valid for six months beyond the date of arrival. Passports must have at least two blank pages.

Travelers are restricted to 100,000,000 Indonesian rupiah (approximately US$7,500) upon entry and exit.

Vaccinations are suggested by the U.S. State Department.

Executive Interview

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Andre de Jong – Vice President, Operations, South East Asia and Pacific, Radisson Hotel Group.

Andre de Jong – Vice President, Operations, South East Asia and Pacific, Radisson Hotel Group spoke with the Accidental Travel Writer on the state of the Indonesia hotel industry.

Excerpts of the interview follow:

Can you briefly describe the Radisson Hotel Group’s operations in Indonesia?

In terms of our current presence in Indonesia, Radisson Hotel Group currently has three hotels in operation in Indonesia, namely, Radisson Blu Bali Uluwatu, Radisson Golf & Convention Center Batam, and Radisson Medan.

Do these hotels have a particular focus?

In Batam, the property is focused on the MICE market, while Radisson Medan is a multi-faceted hotel that mainly serves the corporate domestic sector. Our new Balinese resort will be popular with the upper-upscale leisure travelers.

Radisson Medan is one of the city’s leading hotels and regularly hosts large local events. With the strength of the Radisson brand, it is also the hotel of choice for international travelers to Medan.

We were happy with the performance of Radisson Golf & Convention Center Batam in its first full year of operations, and our confidence in the hotel was demonstrated when we hosted our annual Asia Pacific Business Conference in Batam last year.

This was the latest in a series of high-level events successfully staged at the hotel.

How do you see the future of the Radisson Hotel Group in Indonesia?

Looking ahead, we have identified Indonesia as a key strategic market for Radisson Hotel Group, and we are actively seeking opportunities to introduce our brands to first, second, and even third tier destinations across the country.

Is there anything unique that Radisson is bringing to the table?

We believe that Radisson, our internationally recognized upscale brand, is especially well-suited to Asia’s emerging markets.

Like Batam and Medan, we believe there is a need for international-standard accommodation and facilities, including high-quality event space, in many Indonesian destinations.

That’s why we are excited about the planned opening of Radisson Lampung in the coming months.

[NOTE: this hotel opened after this interview took place.]

Will these hotels be targeted at the domestic or international market?

These new hotels will cater not only to the rising demand from international travelers, but also to the large and increasingly affluent domestic population, including local events and weddings.

More than 14 million travelers visited Indonesia in 2016, up from about 9 million the year before. To what do you attribute the increase?

International arrivals to Indonesia are rising sharply, jumping 21.9% to 14.04 million visitors in 2017, despite tourism disruption as a result of the eruption of Mount Agung in Bali, which slightly impacted the growth.

It would be easy to attribute this growth to the surge in demand from mainland China; certainly, in terms of volume, Chinese visitors outweigh any other nationality and continue to register strong growth rates.

But there are other factors in play too; the liberalization of Indonesia’s visa policy for example, has had a significant impact, as have the global promotional activities of Tourism Indonesia, and increased air lift.

Are there any other important markets?

It’s significant that arrivals from India have more than doubled since 2013, while long-haul markets including the UK, USA, France, and Germany are also on the rise. Visitation from regional neighbours in the ASEAN region are also strong.

The Ministry of Tourism has initiated a five-year plan to develop and market the country as a tourist destination. Can you comment on this plan? Do you think the goal of attracting 20 million visitors by 2019 is realistic?

There are so many incredible places to explore in Indonesia; they just need to be discovered. At Radisson Hotel Group, we look forward to introducing international accommodation to many more parts of this exquisite archipelago in the coming years.

Radisson Hotel Group

One of the world’s largest hotel groups, the Radisson Hotel Group has more than 1,400 hotels around the world under eight brands: Radisson Collection, Radisson Blu, Radisson, Radisson RED, Park Plaza, Park Inn by Radisson, Country Inn & Suites by Radisson, and prizeotel.

Radisson Blu Bali Uluwatu

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The lobby of the Radisson Blu Bali Uluwatu overlooks an infinity pool.

Radisson Blu Bali Uluwatu – dramatically perched atop a hilltop, this luxurious resort has 111 rooms with private balconies and 14 suites with a rooftop terrace. It has two restaurants, three bars, a full-service spa, a swimming pool, and a fitness centre. It is close to one of Bali’s most sacred temples and one of the island’s best surfing beaches. Bali it the most popular holiday destination in Indonesia.

Radisson Golf & Convention Center Batam

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Entrance of the Radisson Golf & Convention Center Batam.

Radisson Golf & Convention Center Batam – this 235-room resort has a fitness centre, a full service spa, and a hot tub as well as an outdoor infinity swimming pool, an indoor swimming pool, and kids pool. There is an on-site restaurant and lounge. A 24-hour shuttle service connects the hotel to the ferry terminal and Hang Nadim International Airport (BTH). Batam is an island located west of Bintan and South of Singapore.

Radisson Medan

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Entrance of the Radisson Medan.

Radisson Medan – situated in the heart of downtown Medan, this 215-room hotel is close to shopping malls and such key attractions as the Sri Mariamman Temple. It has a restaurant, a coffee shop, a fitness centre, and an outdoor swimming pool. The fourth largest city in Indonesia, Medan is the capital of North Sumatra province.

Andre de Jong Bio

A member of the Asia Pacific Executive Committee, Andre de Jong is responsible for the Radisson Hotel Group’s hotel operations in Southeast Asia and the Pacific and for all operational initiatives across Asia Pacific. He has had 20 years of food and beverage, brand standards, and operations experience. He has a bachelor’s Degree in Hotel Business and Administration from the Hotel Management School Leeuwarden in the Netherlands and the Carlson Global Leadership Journey, an 18-month EMBA-style leadership development programme.

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This report on the Indonesia Hotel Industry is the latest in an occasional series of Round Table Discussions and Executive Interviews with industry leaders in the global travel, tourism, and hotel sectors.

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