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Indonesia’s star-rated hotels across the 34 provinces hosted 103.4 million room nights in 2018, up 10.7% from 93.4 million in 2017. Over the past five years (2013-2018) the demand for star-rated hotels (room nights occupied) has grown at a robust CAGR of 16%, compared to 18% over the ten-year period 2008-2018.

The demand for 2-star hotels, albeit from a small base, has led the way growing by a CAGR of 26% over the past five years. This is followed by 3-star, 4-star, 5-star and 1-star growing at CAGRs of 19%, 16%, 9%, and -2% respectively.

Distribution of Room Night Demand by Hotel Star-Rating in Indonesia, 2008, 2013 & 2018

Source: Hotel Investment Strategies, LLC based on an analysis of BPS – Statistics Indonesia.

As a result, the distribution of demand has shifted between the rating categories as illustrated in the graph above. In 2008, 5-star hotels captured 24.3% of demand compared to 15% in 2018. Today, 3-star hotels account for about 34% of demand compared to 26% in 2008.

The island of Bali accounts for more star-rated room demand compared to any other province. DKI Jakarta captures more 1, 2 and 3-star room nights compared to any other province.

Ranking of Room Nights Demand by Province and Star Rating, 2018

Source: Hotel Investment Strategies, LLC based on an analysis of BPS-Statistics Indonesia data.

While the demand for star rated hotel accommodation across the country grew by 16% CAGR over the past five years, the growth in Jakarta and Bali, the two most popular destinations, grew more than the national average, at CAGR 23% and 18.1% respectively.

Growth in Star-Rated Hotel Room Demand by Province & Star Rating 2013-2018 (CAGR%)

Source: Hotel Investment Strategies, LLC based on an analysis of BPS-Statistics Indonesia data.