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This is the second post, in a series of four, that briefly examines the tourism potential of four provinces in Eastern Indonesia. The posts include:

  • Tourism Potential in North Sulawesi Province, Indonesia
  • Tourism Potential in Sulawesi Selatan, Indonesia
  • Tourism Potential in Maluku Province, Indonesia
  • Tourism Potential of West Papua Province, Indonesia

We plan to roll-out the posts over the next few weeks. Let us know if you want a PDF report of any post. A PDF report for each post is available by email.

Background

Maluku Province offers the astute developer, investor and tourism entrepreneur a wide range of natural and man-made attractions on which to develop an environmentally sensitive and profitable tourism business. The tourism resources of the province remain largely untapped as the tourism sector continues in the early stages of its development.

Marine tourism, eco-tourism, and cultural and historical heritage tourism provide the foundations upon which a successful tourism enterprise can be built. Along with the most interesting tourist attractions of beaches, national parks, and natural vistas, these resources can be developed and managed to benefit not only the entrepreneur but also the local community in Maluku.

The Location of Maluku and North Maluku

Maluku is a province in Eastern Indonesia containing the central and southern regions of the Maluku Islands (Moluccas). Maluku consists of 559 islands, including Seram (18,625 square km), Buru (9,000 square km), Yamdena (5,085 square km), and Wetar (3,624 square km). Adjacent to Maluku are North Maluku and West Papua in the north, Central Sulawesi and Southeast Sulawesi in the west, Banda Sea, East Timor, and East Nusa Tenggara in the south, and the Arafura Sea in the east, as illustrated in the map above.

Maluku consists of nine regencies and two cities, including Ambon, the largest city and the province’s Capital. The province has the eighth-lowest population density of Indonesia’s 34 provinces, with roughly 32 people per square kilometer and a population of 1.77 million. This is significantly lower than the country’s population density of roughly 149 people per square kilometer.

Apart from various historical sites dispersed throughout the province, tourism in Maluku is driven mainly through its many notable beaches, including Ngurbloat Beach, which stretches five kilometers in length and boasts the “finest beach sands in Asia,” according to National Geographic. Ngurbloat is just one of Maluku’s major tourist beaches, in addition to Pasir Panjang and Natsepa, which are also regarded for their white sand and blue-sky background. The low population density combined with an abundance of beautiful beaches makes Maluku an ideal beachfront hotel location.

Visitor Arrivals

The total number of visitors to Maluku reached about 115,000 in 2018:

  • 100,500 are domestic visitors (excluding the trips of residents within the province)
  • 14,300 are foreign visitors

Foreign Visitors

Maluku Province has hosted a growing number of international visitors over the past five years. Their number has grown from almost 3,500 in 2013 to 14,300 in 2018, representing a compound annual growth rate (CAGR) of 32.5%.  Despite its location within the ASEAN region, only 4% of international visitors came from ASEAN countries in 2018. The largest source markets in 2018 were Europe 68%, Asia 13%, and America 10% as illustrated in the graph below.

Growth in International Visitors to Maluku by Origin 2013 – 2018

Source: Source: BPS-Statistics of Maluku Province

The fastest-growing international markets include Europe and America, each with a CAGR of 37%. The ASEAN and Asia markets have grown with CAGRs of about 20% over the past five years.

Domestic Visitors

Over the past four years, Maluku Province has attracted just over 100,000 domestic visitors (100,500 in 2018). The number of domestic visitors has grown from about 31,600 in 2010 to 100,500 in 2018, a CAGR of 15.5%. Java accounted for almost 69% of domestic visitors in 2018, followed by Sulawesi with 11.8% and Papua 10.8%. With direct flights from Jakarta to Ambon, about 49,000 domestic visitors came from this important source market in 2018.   

Connectivity/Access

Access to Maluku is by plane or ferry. According to the Maluku Provincial Transportation Office, there are 13 provincial airports serving the province, including Pattimura Airport. Sultan Baabullah Airport on the island of Ternate in the neighboring province of North Maluku is also a major feeder gateway to the province.  

The capital city Ambon is considered the gateway into Maluku, which is served by Pattimura Airport. The airport is located 30 kilometers from Ambon by road, and nine kilometers west by sea; both options are relatively inexpensive for visitors. The airport offers flights regularly to and from Makassar and Jakarta, as well as several flights from Papuan airports. Garuda Indonesia, Lion Air and Batik Air service the airport. Ambon is around 3.5 hours flying time east-north-east of Jakarta.

Hotel Market Overview

The number of rooms in the accommodation sector (classified and non-classified) has grown in two distinct phases, 1987-2002 and 2003-2018 as illustrated in the graph below. During the first phase, the number of rooms grew from 883 in 1987 to 2,040 in 2002, a CAGR of 5.7%. During the second and more recent phase, the number of rooms grew from 979 in 2003 to 5,874 in 2018, a CAGR of 12.7%.

Growth in the Number of Rooms for the Accommodation Sector in Maluku 1987 – 2018

Source: Source: BPS-Statistics of Maluku Province and Hotel Investment Strategies, LLC

The composition of today’s accommodation sector in Maluku has evolved slowly over the past five years. Catering to a wide range of domestic and international guests, the number of star-rated hotels has grown from 21 in 2013 to 22 in 2018.  Over the same period, the number of star-rated hotel rooms has grown at a CAGR 1.2% from 995 to 1054. This compares with national CAGRs for star-rated hotels and rooms of 13% and 10% respectively.

Growth in the Number of Rooms by Star Rating in Maluku Province 2013 – 2018

Source: Source: BPS-Statistics of Maluku Province

Growth in Hotel Room Demand by Star Rating in Maluku Province 2013 – 2019

Source: Source: BPS-Statistics of Maluku Province

The demand for star-rated hotel accommodation has grown at the CAGR of 5.1% over the period 2013-2018, with solid CAGRs for 2 and 3-star hotels of 13.1% and 13.2% respectively. The demand for 1-star hotels has slumped by a CAGR of 27.1%, or 29,000 room nights as illustrated in the accompanying graph.

Growth in Historical & Forecast Domestic Guests in Star Rated Hotels – Maluku 2008-2020

Source: Source: BPS-Statistics of Maluku Province and Hotel Investment Strategies, LLC

While only 6% of domestic visitors to Maluku stayed in hotels in 2018, they accounted for 92% of guests in the 22 star rated hotels in the province, down from 94% in 2008. The number of domestic guests has grown from 33,000 in 2006 to almost 116,000 in 2018, a CAGR of 13.4%.

The number of domestic guests is expected to moderate in 2019, growing less than 1% to 117,000 and then reverting to a long-term growth rate of 14.3% in 2020, culminating in about 134,000 domestic guests.

Growth in Historical & Forecast Foreign Guests in Star Rated Hotels – Maluku 2008-2020

Source: Source: BPS-Statistics of Maluku Province and Hotel Investment Strategies, LLC

The number of foreign guests using star-rated hotels in the province has grown from just over 2,000 in 2006 to over 9,900 in 2018, a CAGR of 17.2%. Based on year-to-date September 2019 performance, we forecast the number of foreign guests declining by 29% in 2019 to 7,100. The number of foreign guests is forecast to grow by about 7% in 2020 to 7,600.

Growth in Historical & Forecast Room Occupancy in Star Rated Hotels – Maluku 2008-2020

Source: Source: BPS-Statistics of Maluku Province and Hotel Investment Strategies, LLC

Over the period 2008-2018, the average annual room occupancy for star-rated hotels was 38.1%, which compares with 40.2% for the period 1994-2018. Room occupancy peaked in 2015 at almost 60%. Annual room occupancy is forecast to decline three percentage points in 2019, down to 35.8%. It is forecast to grow by 0.7 percentage points to 36.4% in 2020. 

Conclusion

Maluku Province has a wide range of natural and man-made attractions suitable for the development of environmentally sensitive and sustainable tourist facilities It has the potential to become a major tourist destination among a few leading tourist regions in Eastern Indonesia appealing to domestic and foreign tourists alike with an interest in pristine coral reefs, tropical beaches, scenic vistas including forest-coated volcanoes, centuries-old forts, and local culture.

The tourism resources of the province remain largely untapped as the tourism sector continues in the early stage of development. Maluku Province offers the astute developer, investor and tourism entrepreneur a wide range of natural and man-made attractions on which to develop an environmentally sensitive and profitable tourism business.

The anticipated growth in international visitor arrivals and domestic travel movements is expected to bring about a corresponding increase in capacity requirements and demand for new products, facilities and services, thus paving the way for local and foreign investment opportunities.

Hotels, resorts and other types of accommodation facilities will have to be built to address the lodging requirements of both foreign and domestic travelers. The need for improved accessibility will likewise open investment opportunities in air, water and land transport operations.