Long weekends also led to the increase of family staycations and the increase in YTD occupancy rates until May 2023 of 60.2%, 56.0%, 61.7%, 55.0% for 3, 4, 5 and luxury hotels respectively. This reflects a 2.7% annual occupancy increase from 2022. In May 2023 alone, the average occupancy rate of hotels in Jakarta was 65%, exceeding May 2019 (pre-pandemic) occupancy rate of 43%.
ADR: Significant Increase in ADR
The improved occupancy level was seen to have impact on the increasing ADR across every market segment during the review semester. The average Daily Rates in 1H2023 were recorded at : 3-star – Rp. 446,470 (14.4% YoY); 4-star – Rp. 804,500 (22.8% YoY); 5- star – Rp. 1,7,49,580 (30.4% YoY); and Luxury – Rp. 2,191,180 (17.0% YoY), respectively.
Outlook: Domestic Arrivals Will Rebound Substantially
With a broader normalization of international travel in Asia Pacific region, the Jakarta hotel market has returned to pre-pandemic levels in end 2022 and should see modest growth in performance in 2023. Domestic arrivals in Jakarta will rebound substantially in which the rebuild of the inbound market will take place.
In line with this, event organizers, both government and private, are expected to hold many international MICE events not only in tourist destinations such as Bali but also Jakarta, which ultimately give positive impact on hotel room demand.
Landed Residential H1 2023
Demand: Stable Purchasing Power of The Market
Following the government’s official removal of activity restrictions across all regions of Indonesia by the end of 2022, the first half of 2023 has witnessed a sustained enhancement in market confidence towards landed residential products.
Although the Middle segment maintains its dominant position in terms of demand, accounting for approximately 26% of the total demand, the Upper segment continues to exhibit improving demand, representing around 23.9% of the total units sold.
Notably, a significant portion of the demand stems from end-users, constituting approximately 77% of the buyers – this buyer group comprises a blend of first-time homeowners and more established families seeking larger residences to accommodate their growing requirements.
The Greater Jakarta area exhibited an average monthly take-up rate of 20.1 units per estate during H1 2023, representing a year-on-year decrease of 20.5%. This figure corresponds to an average absorption value of Rp 41.8 billion per estate per month.
Although this value reflects an 8% year- on-year decline compared to the previous year, it remains relatively consistent with the previous semester (+4% HoH), indicating promising purchasing power within the market.
The average transaction value per unit stands at approximately Rp 2.08 billion, showing a 15.6% increase compared to the first half of 2022. Notably, Bekasi maintained its position with the highest average absorption rate per estate, recording an average of 27.9 units per month, followed by Tangerang with approximately 21.4 units per estate per month.
Despite the expiration of the Government’s Value Added Tax (VAT) incentives program in September 2022, developers in the landed residential sector remain actively engaged and are expected to persist in launching new products due to the sustained strong demand they are experiencing.
Beginning in January 2023, the Central Bank initiated a series of increases in its average interest reference rate and maintained this rate up until June 2023, with the objective of managing inflationary pressures.
Despite this, the average prime mortgage lending rates offered by banks have remained relatively stable. Many banks have continued to ease their mortgage regulations, while developers actively introduced competitive payment methods such as down payment installment programs and express mortgages. Mortgages have remained the preferred payment method this first half of 2023, accounting for 74.1% of transactions, followed by cash installments at 15.2% and hard cash payments at 10%.
