Indonesia’s hospitality sector is experiencing unprecedented investment activity, with ProSpace Indonesia’s Hotel Investment Report identifying $3.7 billion committed to accommodation development projects since 2023. These investments will add approximately 34,000 rooms to the national inventory by 2027.
International hotel brands continue to expand their Indonesian portfolios, with 18 global chains launching new properties in the past year. Meanwhile, domestic hotel groups show increasing sophistication, with several successful IPOs funding ambitious expansion plans.
“Indonesia’s hospitality investment landscape has matured significantly, with more specialized products targeting specific traveler segments,” explains Miranda Husodo, Hospitality Investment Analyst at ProSpace. “The geographic diversification beyond traditional tourism hubs is creating a more balanced development pattern.”
Luxury and upper-upscale segments lead in investment values, accounting for 42% of committed capital, while midscale properties show the highest growth in room counts. Branded budget hotels continue their rapid expansion in secondary cities, capturing business traveler market share from independent properties.
Alternative accommodation concepts including branded residences, serviced apartments, and glamping experiences show the strongest percentage growth, albeit from smaller bases. Meanwhile, wellness-focused resorts represent a growing specialized segment, particularly in Bali and emerging destinations.
ESG considerations increasingly influence development decisions, with 67% of new projects incorporating substantial sustainability elements including renewable energy systems, water conservation technologies, and locally-sourced building materials.
For hospitality investment guidance: Phone: +62 21 5799 8989 Email: info@prospaceindonesia.com Follow @prospace.indonesia on Instagram for updates