The Indonesian Ministry of Tourism has urged hotel operators to shift focus from government-funded events and explore broader markets to sustain growth.
Speaking on June 5, 2025, Deputy Minister of Tourism Ni Luh Puspa said the hotel industry should not rely solely on public spending despite relaxed policies allowing government activities in hotels.
“Don’t depend on the state and regional budgets just because it’s now permitted again,” she said during a visit to Kuta Beach, Badung, Bali.
Puspa emphasized that hotel operators should strengthen ties with the private sector to expand business potential and reduce vulnerability to fiscal policy shifts.
Although the Ministry of Home Affairs has greenlit local governments to resume holding meetings in hotels, Puspa cautioned that state funding would not return to previous levels.
She explained that much of the government’s budget allocation—both from the national (APBN) and regional (APBD) budgets—will be redirected to public infrastructure and essential services.
Tourism Ministry Calls for Broader Market Development
The deputy minister highlighted that in the past, ten out of ten meetings might be hosted in hotels.
“Now, maybe just five,” Puspa said.
Baca Juga:
She stressed that events should not be artificially created to fill room bookings and urged the sector to innovate its service offerings.
“This is a good opportunity, but it doesn’t mean you can sit back and expect everything from APBN or APBD,” she added.
Diversifying revenue sources, she said, could help hotels maintain stable occupancy even without full reliance on state-financed activities.
She encouraged hotels to think beyond conventional conference packages and explore alternative tourism products and private-sector collaborations.
Baca Juga:
Hotels See Limited Boost Despite Looser Government Rules
Despite new permissions for state functions in hotels, occupancy rates are unlikely to rise sharply in the short term.
Puspa predicted that occupancy might only receive a modest boost, possibly accounting for 40 to 50 percent of business.
“The rest needs to come from creative efforts by the hotel industry,” she said.
She also urged hoteliers to invest in services that attract non-government clientele, including leisure tourists and corporate clients.
This, she believes, will create a healthier business model that is not overly sensitive to policy shifts or fiscal tightening.
BPS Reports Declining Room Occupancy in Early 2025
Recent data from Statistics Indonesia (BPS) indicates that hotel room occupancy rates are still under pressure.
Baca Juga:
Between January and April 2025, the occupancy rate for star-rated hotels stood at 43.94 percent.
That figure reflects a 2.67 percentage point drop compared to the same period in 2024, which was 46.61 percent.
Despite the national dip, Bali’s hotels remained relatively strong, with a 53.96 percent occupancy rate—the highest in the country.
Non-star hotels saw even steeper declines, falling from 24.75 percent in early 2024 to just 23.24 percent in the same period this year.
Hotels Encouraged to Collaborate with Non-Government Clients
The tourism ministry is betting on the private sector as a sustainable alternative.
According to Puspa, forging ties with corporations for meetings, incentives, conventions, and exhibitions (MICE) can provide stability.
She also suggested that hotels develop experiences for digital nomads, wellness seekers, and eco-conscious travelers.
The ministry plans to facilitate partnerships with domestic and international businesses to stimulate this growth.
By repositioning themselves, hotels could find more reliable income sources even if government spending remains subdued.
APBN and APBD to Fund Vital Infrastructure Projects
Puspa made it clear that public budgets would be increasingly directed toward long-term priorities.
“Road repairs, public health facilities, and education will come first,” she said.
This shift aligns with national development goals and reflects the need to balance short-term stimulus with strategic investment.
For hotels, this means less guaranteed business from ministries and local governments.
They must adapt by aligning products with emerging consumer trends and filling the gap left by reduced public sector demand.
Hotel Sector Told to Diversify, Not Wait for Government Events
As government activities in hotels resume, the ministry’s message remains clear: resilience requires reinvention.
Innovation in services, pricing, and marketing will be key to sustaining occupancy and revenue.
Puspa suggested bundling hotel stays with adventure tourism, culinary tours, or cultural activities to attract new segments.
The government will continue to support policy reform, but businesses must take proactive steps to ensure survival.
In a landscape marked by tighter fiscal constraints, hotels must evolve to secure a sustainable future.*
The Indonesian Ministry of Tourism has urged hotel operators to shift focus from government-funded events and explore broader markets to sustain growth.
Speaking on June 5, 2025, Deputy Minister of Tourism Ni Luh Puspa said the hotel industry should not rely solely on public spending despite relaxed policies allowing government activities in hotels.
“Don’t depend on the state and regional budgets just because it’s now permitted again,” she said during a visit to Kuta Beach, Badung, Bali.
Puspa emphasized that hotel operators should strengthen ties with the private sector to expand business potential and reduce vulnerability to fiscal policy shifts.
Although the Ministry of Home Affairs has greenlit local governments to resume holding meetings in hotels, Puspa cautioned that state funding would not return to previous levels.
She explained that much of the government’s budget allocation—both from the national (APBN) and regional (APBD) budgets—will be redirected to public infrastructure and essential services.
Hotels Encouraged to Rely Less on State Spending
The deputy minister highlighted that in the past, ten out of ten meetings might be hosted in hotels.
“Now, maybe just five,” Puspa said.
She stressed that events should not be artificially created to fill room bookings and urged the sector to innovate its service offerings.
“This is a good opportunity, but it doesn’t mean you can sit back and expect everything from APBN or APBD,” she added.
Diversifying revenue sources, she said, could help hotels maintain stable occupancy even without full reliance on state-financed activities.
She encouraged hotels to think beyond conventional conference packages and explore alternative tourism products and private-sector collaborations.
Occupancy Rates Show No Signs of Quick Recovery
Despite new permissions for state functions in hotels, occupancy rates are unlikely to rise sharply in the short term.
Puspa predicted that occupancy might only receive a modest boost, possibly accounting for 40 to 50 percent of business.
“The rest needs to come from creative efforts by the hotel industry,” she said.
She also urged hoteliers to invest in services that attract non-government clientele, including leisure tourists and corporate clients.
This, she believes, will create a healthier business model that is not overly sensitive to policy shifts or fiscal tightening.
Statistical Data Paints a Cautious Picture for Hotels
Recent data from Statistics Indonesia (BPS) indicates that hotel room occupancy rates are still under pressure.
Between January and April 2025, the occupancy rate for star-rated hotels stood at 43.94 percent.
That figure reflects a 2.67 percentage point drop compared to the same period in 2024, which was 46.61 percent.
Despite the national dip, Bali’s hotels remained relatively strong, with a 53.96 percent occupancy rate—the highest in the country.
Non-star hotels saw even steeper declines, falling from 24.75 percent in early 2024 to just 23.24 percent in the same period this year.
Private Sector Engagement Seen as Industry Lifeline
The tourism ministry is betting on the private sector as a sustainable alternative.
According to Puspa, forging ties with corporations for meetings, incentives, conventions, and exhibitions (MICE) can provide stability.
She also suggested that hotels develop experiences for digital nomads, wellness seekers, and eco-conscious travelers.
The ministry plans to facilitate partnerships with domestic and international businesses to stimulate this growth.
By repositioning themselves, hotels could find more reliable income sources even if government spending remains subdued.
Public Infrastructure Takes Budget Priority over Hotel Spending
Puspa made it clear that public budgets would be increasingly directed toward long-term priorities.
“Road repairs, public health facilities, and education will come first,” she said.
This shift aligns with national development goals and reflects the need to balance short-term stimulus with strategic investment.
For hotels, this means less guaranteed business from ministries and local governments.
They must adapt by aligning products with emerging consumer trends and filling the gap left by reduced public sector demand.
Tourism Ministry Pushes for Innovation and Resilience
As government activities in hotels resume, the ministry’s message remains clear: resilience requires reinvention.
Innovation in services, pricing, and marketing will be key to sustaining occupancy and revenue.
Puspa suggested bundling hotel stays with adventure tourism, culinary tours, or cultural activities to attract new segments.
The government will continue to support policy reform, but businesses must take proactive steps to ensure survival.
In a landscape marked by tighter fiscal constraints, hotels must evolve to secure a sustainable future.***
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