End of Budget Hotel in Indonesia

I was having lunch yesterday in a 60-rooms fun, funky hotel, in central Jakarta when I saw one group of 10 foreigners arriving in the lobby.  The restaurant was full with business people mix with leisure. One long table was reserved by one corporate group.

I happened to know the hotel manager. He told me that the occupancy is in an average of 80% with an average room rate above 800,000 rupiah.  Sounds like a good business in Jakarta, where Indonesia’  hotel situation is quite tough lately.  Then, I remembered a conversation with some hotel owners, who shared with me that their 3 star international standardized hotels are struggling to meet the budgeted occupancy and rate.  

While the number of non-star hotel in Indonesia by end of 2014 is 15,488 (based on Indonesia’ Bureau of Statistic Center) and there will be additional 26,524 rooms in 2016. Is there still a room for budget hotel in Indonesia?

Take a look of some popular hotel in instagram and the languages used to describe their hotels:

1.      Lokal Hotel in Yogyakarta. A 12-rooms bijou hotel with great sense of familiarity located in not-so called prime location, has 12,200 followers.

2.      Bambu Indah, a sustainable boutique hotel in Ubud, welcome eco warriors and gypsets. Followed by 6,700 fans.

3.      Artotel Indonesia, a collection of Art inspired design hotels featuring original artwork by talented Indonesian contemporary artists.  Followed by 6,400 fans.

4.      Kosenda Hotel, a hotel filled with character and individuality.  A very chic small hotel but equipped with roof top lounge and restaurant.  It has 3,500 followers.

5.      Greenhost Hotel in Yogyakarta. 96 rooms hotel that has co-working space for creative professionals, creative farming and art kitchen. Their followers in instagram is 1,200.

Picture taken from Lokal Hotel instagram

 

These hotels are all have very unique and strong concept, either eco, art or using local materials.  Their hotels are social media materials. If millennial generation are started to travel and have the spending power, I believe it is time for hotel developers in Indonesia to start to take into account what these generation like.

International hotel operators have widened their operation to tap into these unique hotel trends market:

1.      Moxy Hotel by Marriot, a style and soul boutique hotel, started with 1,600 followers in instagram.

2.      Mama Shelter of Accor, a fun, stylish, pop art hotel is very popular in instagram with 11,500 followers.

3.      Ace Hotel is a collection of individuals – multiple and inclusive, held together by an affinity for the soulful, followed by 95,700 in their instagram.

Picture taken from Mama Shelter instagram

Key words for these hotels are lean luxury, laid back glamour and affordable boutique hotel So, gone are all those standardized concept hotel. Millennial travellers like to explore and find new experiences.  They love to upload and proud to be the 1^st one to find a unique place.  In order to energize the budget hotel in Indonesia, hotel developers should put into consideration of all the successful ingredients of the popular hotels above. (ade noerwenda)