Investigation Of Current-Future Trends In Indonesia Hospitality Industry

2058 (5 pages)
Download for Free
Watch out! This text is available online and is used for guidance and inspiration
Download PDF


Looking deeply into Indonesia geographic which attract a lot of attention from all nationalities in the world and find out about the current-future trend in Indonesia hospitality industry which affected by inner and outer factors. The factors that happened inside the country are caused by the number of tourist arrival, market share relation, the tourist attractions, brands of the hotels that growth in that country and who is more dominant for being a key person.

On the other hand, there are some outside factors such as taxes in the political side, also income and outcome in the hospitality industry, the impact of social cultures that affect tourist knowledge, the development of technology, and environmental. IntroductionAs a country that has a geographic of over thousand islands and ethnics, Indonesia also rich of food, multiculturalism, and artistry (Handoyo et al. , 2018). Indonesia has a total area (Figure 1) is almost two square kilometers and the area consist of land with almost 1. 9 million square kilometers and water is around ninethy thousand square kilometers (Leinbach, Frederick, and Worden, 2011) with the agricultural land used is 31,2% is forest and some the rest of it is bordering with Papua New Guinea, Timor Leste and Malaysia (Central Intelligent Agency, 2018). Indonesia ranked fourth by the number of population in the world (Kohler and Behrman, 2015) Population is low in the last decades of the 2000 and has halt since 1990 (Figure 2), with an average of women that give a birth is over 2 childs (Ibid, 2015). According to E. Salim, S. Adioetomo, E. Arifin et al. (2015), There are new trends will change the composition of the Indonesian population in any sectors which hold economic implications for the composition of consumers and producers and reflect potential changes in the market for goods, services, and labor.

Indonesia Market Analysis

Tourist Arrival

As an important aspect to develop countries and profit in the economic sector (Damanik and Baiquni, 2016). Tourist who arrived in Indonesia has a total average over 8 million from 2011 to 2018 with the highest number on July 2018 which is almost 1. 6 million and the lowest record is 550 thousand on January 2011 with Bali as the top destination that consists of 624 thousand visitors, second is Jakarta with the 321 thousand visitors and lastly is Batam with the total number is 144 thousand. (Trading Economics, 2018). According to Accounts (2018), the database of 10 years period (Figure 3) shown a dramatic increase of tourist arrival in Indonesia with the top five nationalities is China, Singapore, Malaysia, Australia, and Japan (Ibid, 2018).

Market Share

In 1998, there was a national crisis in Indonesia and the economic fundamentals, as well as socio-political settings, were deeply shattered (ICAEW, 2015). Nonetheless, the situation on that day has opened up the way to the different trend which Indonesian knew as a camp of the cafeteria, these ideas quickly gained popularity during the 1998 and 2001 period and with an upcoming new concept, F&B retails in 2002 which brought Indonesia to recover (Ibid, 2015). From 2005 to 2013 Indonesia Government spending on general services (Figure 4) with the amount of expenditure was 255. 6 trillion rupiahs to 720. 06 trillion rupiahs (Andriansyah and Anto, 2016).

Moreover, that will produce 2. 400. 000 new jobs in Indonesia which consist of over 769 million (6. 2% Indonesia’s GDP) and the capital city of Indonesia also contributes up to 41% of Indonesia’s Travel & Tourism (WTTC, 2019). Therefore, Indonesia is already the 16th largest economy in the world as stated on McKinsey report in the last 2 years and has the potential to be the seventh biggest by 2030 (Board, 2015).

Indonesia Attractions

To do an expansion in general tourism sector, the ministry of tourism promoted a new movement called Wonderful Indonesia that consist of many types of food, amazing mother-nature, culture, and hospitality services (Petriana, 2017). The most popular tourist attraction in Indonesia is Bali (I Gusti Bagus and Komalawati, 2015) with the main attraction is culture performance (Picard, 1990). Other than that, there are several destinations which have an incredible tourist attraction such as Komodo National Park (Walpole, 2001), Lombok (Sunarti & Hartini, 2015), and Bandung (Pratminingsih, Rudatin, & Rimenta, 2014). (Ibid, 2017).

Demand and Supply

According to the global hospitality research companies from 2011-2015, the quantity of high-quality of hotel rooms in twelve key Indonesian markets become over twice, so the yearly growth is 19 percent and at that time the total of high-quality rooms dramatically increase from about 35 thousand to above 71 thousand (With and Ahead, 2016). It is interesting that the demand growth far exceeded the supply growth only one of Indonesia’s biggest market, Bali through June (Figure 5). Although that the supply increased more strongly, there was some demand growth in Jakarta, Bandung, and Surabaya. On the other hand, Yogyakarta had negative demand and increasing supply growth which is a crippling combination. (HTL, 2016)

Key Consumer

Tourism development in Indonesia is not only depended on foreign visitors but supported also by local travelers or often referred to the domestic traveler. (Pratomo, 2017). In 2015, based on the National Socio-Economic Survey, almost 40 million individuals are traveling within Indonesia with the dominant purpose (Figure 6). In revenue, the total expenditure is also higher than revenue from foreign visitors, increasing significantly from IDR 137 trillion (almost USD 10,000 million) in 2009 to more than IDR 180 trillion (USD 13,000 million) in 2015 (Ibid, 2017). The total of foreign visitors who visiting Indonesia has increased from 5 million in 2000 to over 9 million in 2015 (Damanik and Baiquni, 2016). Foreign visitors give revenue through its tourist expenditure also increased from USD 5,748 million in 2000 to more than USD 11,000 million in 2015, supporting for around four percent of the total GDP in Indonesia (Ibid, 2016).

PESTEL and Cultural Analysis


We will write a unique paper on this topic for you!
Place Order

*No hidden charges

The requirements of foreign tourist who wants to visit this country must have a visa from diplomatic missions of Indonesia or otherwise they should come from the country that visa-free and qualify for a visa on the arrival date and the maximum valid of visitor passport is up to 6 months (Rica, Salvador, and Lucia, 2017). The number of VAT in Indonesia is ten percent and it is not a fixed number because it could be getting up to 15 percent or down to 5 percent, it depends on rules of government. Nonetheless, there are some regulations to the goods that sold to outside the country with the VAT is permanently 0% and certain conditions covering the service (PwC, 2016). In the tourism sector, VAT impact on operations, sales and purchases, Human Resources and IT System. (‘VAT impact on hospitality sector’, 2017).


The hypothesis of tourism-led growth (TLG) has a spotlight from many economists because the tourism sector is capable to contribute to the economic growth, both directly and indirectly (Holik, 2016). By 2022, it is predicted that the tourism sector will produce 328 million jobs, or contribute one of ten opportunities of jobs on the earth (Chou, 2013), one of which is doing sports in the wild nature. Activities that require the high competitive spirit should be very well developed as the tourism promotion. (Ibid, 2016)GDP of tourism in Indonesia in 2016 (Figure 7) was up to 1. 8 percent. In 2017 it was slightly increased to 4. 3 percent and it produced by hospitality industries. (Turner and Freirmuth, 2017).


Besides the local values, one of the biggest asset in developing the tourism in Indonesia by implementing “Sapta Pesona” (Waani, 2016). Sapta Pesona is a pillar for the development and management of tourism in Indonesia that intended to attract tourists. There are seven charms of Sapta Pesona which are safety, discipline, hygiene, coziness, attractiveness, hospitality, and memories (Tri, 2016). Furthermore, Indonesia is well-known for their hospitality which can increase the convenience that affects tourist perception to stay or even come back to Indonesia.


The hospitality sector is the one who gains an advantage in IT by using ICT to distribute information to the large participant with the total of users is up to 22. 1 percent (Jonathan and Tarigan, 2016). There are several impacts of internet in technology to the hospitality industry which has been applied in Indonesia by Mitel product (Relia et al. , 2017), such as service automation that traveler can automatically check-in via apps, fixed mobile convergence which links the in-room systems to the guest mobile phone, location-based services which can fulfill customer needs immediately by knowing their location while they are on the property, connected meeting rooms and chatbot mobile apps (Business, 2018). LegalThere are three main sources of Indonesia Labor Law such as act no. 21 (2000), act no. 13 (2003), and act no. 2 (2004) (Hadiputranto, 2015).

Indonesia has been characterized as having a “low pay” civil service (Filmer and Lindauer, 2001), however, the employment contract still received the standard annual salary, salary and accrued allowances bonus include housing, medical and healthcare (Silkin, 2017).


Indirectly, there is a clear impact that has been produced by tourism sector to the environmental nature through the firm that supports tourism industries, It is also caused by tourist’s perception about the environmental condition and they dare to show how do they care about the environment more than anyone who did not. (Ramdas and Mohamed, 2014). Looking at Indonesia’s land that consists of 60% many types of forests and vegetations (Butarbutar and Soemarno, 2013). Therefore, Indonesia has a tropical climate with a high level of rainfall (Li and Michalak, 2008) which impact to the tourist activity while they visit some tourist attractions.

Current and Future Outlook

Louvre hotels group created a JinJiang International Hotels as a dignified oriental group which ranked 10th in 2015 on the section of global hotel operator and affirms that competition among competitors is getting harder in oriental hotel groups (Salvioni, 2016). This hotel is being a current trend in hospitality Indonesia by launching 30 branches and consists of branded hotels (Resources et al. , 2015). The hotel group received the award for Leading Global Hotel Chain in Indonesia for 2016 – 2017 given by ITTA, The Indonesia Travel and Tourism Awards and on 11st September 2018, Louvre Hotel open their first SmartHotel with automated check-in office, a key on their mobile phone, welcome and assistant robot, from which they can get in touch with hotel personnel whenever they wish (Ibid, 2015). For the future trend, we need to focus on the millennial side because they are the next generation that will be a guest of thousand hotels in the world.

Generally, Millennial travelers don’t like the traditional travel experience because most of them are social-media addict especially, for Instagram to get worthy photos. This is the reason why hotel companies need to be aware of this trend and should plan a strategy based on these habits and traits. According to the Chestler (2016), In 2020, all the hotels system will be designed especially for the younger age during this period and it would be surrounded by high technology experience, such as transferring the system through guests phones so guest can do whatever they want, and it would be smart room and lobbies that designed as a multi-function public area for a place to drink, eat, relax and do some business work.

Conclusion and Recommendations

In conclusion, Indonesia has implemented modern developments in the hospitality and tourism sector with many foreign investors investing their ideas through a good hotels brand to make the future becomes reality. This happened because at first, tourists were interested in visiting Indonesia to explore the existing tourist attractions and some of them were also interested in doing a market share and it made demand and supply arose. Moreover, there are some of the external factors that affect such as the politics of taxation in Indonesia which is quite high, also from the economy side which experiences erratic fluctuations, socio-cultural can be said to be one of the main factors and technology, law and the environment. Based on the conclusion, it supposed to not only foreign investors are more dominant in modern developments of hospitality and tourism but Indonesian must also be able to invest their ideas and bring them to the international world so the names of Indonesians can be seen off.

You can receive your plagiarism free paper paper on any topic in 3 hours!

*minimum deadline

Cite this Essay

To export a reference to this article please select a referencing style below

Copy to Clipboard
Investigation Of Current-Future Trends In Indonesia Hospitality Industry. (2020, July 22). WritingBros. Retrieved October 22, 2020, from
“Investigation Of Current-Future Trends In Indonesia Hospitality Industry.” WritingBros, 22 Jul. 2020,
Investigation Of Current-Future Trends In Indonesia Hospitality Industry. [online]. Available at: <> [Accessed 22 Oct. 2020].
Investigation Of Current-Future Trends In Indonesia Hospitality Industry [Internet]. WritingBros. 2020 Jul 22 [cited 2020 Oct 22]. Available from:
Copy to Clipboard

Need writing help?

You can always rely on us no matter what type of paper you need

Order My Paper

*No hidden charges