Looking to invest in Indonesia? Investors see Indonesia as having a large market potential so that it will be prospective for the hotel business. Jakarta is the location chosen with the potential for expansion in Bali and Lombok. The Investment Coordinating Board is ready to facilitate the interests expressed by Taiwanese investors through the Indonesian Economic Trade Office.
Head of the Investment Coordinating Board, said that the tourism sector is one of the priority sectors that will be attracted to Indonesia. “The tourism sector is a prospective sector considering the government will open the restaurant and hotel business sector for foreign ownership.
His party supports the entry of the five-star class hotel chain in Indonesia, and also said that a three-star hotel chain also has its own market so that it has the potential to enter Indonesia. “Indonesia is one of the priority countries for the hotel chain considering the huge potential for economic growth. Apart from Jakarta, the hotel chain is also interested in establishing hotels in coastal tourism areas, where they are interested in owning hotels in Bali and Lombok.
Hotel investors in Indonesia seeking for potential tourism areas in Indonesia
Related to this, the hotel management asked for information on potential tourism areas in Indonesia to be submitted to the investors. The Head of BKPM said that the government is focused on developing 10 tourism destinations.
This hotel in Jakarta was a star-class hotel branch after the chain had hotel branches in several other locations, including Beijing, Berlin, Montenegro, Phuket, Singapore, Taipei, and Turks and Caicos. The hotel group has a five-star, four-star and three-star hotel chain. He explained that the hotel group carries out its hotel management activities while the building construction will be supported by the hotel group’s investors.
Meanwhile, the Head of Investment of IETO Taipei, added that the hotel will be built in a property complex in which a residential building (condominium) will also be built. Based on the report submitted by the hotel chain, the hotel located in Jakarta is currently under construction and is expected to start operating in early 2020.
Hotel investors in Indonesia urgently needed economic activity information in Indonesia
Indonesia is an important country, especially in the ASEAN region, because Indonesia’s population represents 40% of the total ASEAN population and with the enactment of the ASEAN Economic Community, it can be estimated that economic activity in Indonesia will be even busier. For this reason, supporting sectors such as hotels are urgently needed and are one of the sectors promoted to entrepreneurs in Taiwan.
From the data held by BKPM, investment realization from Taiwan in 2015 reached US $ 107.95 million consisting of 275 projects. Meanwhile, the Financial Times data for February 2016, Taiwan’s total Outward Investment to Indonesia is in seventh position with a total investment of US $ 1.5 billion.
BKPM will continue to facilitate the entry of investment from Taiwan to achieve investment realization in 2016 of Rp. 594.8 trillion, particularly the contribution from foreign investment which is pegged at Rp. 386 trillion or 65% of the total investment realization targeted to enter.
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THREE STAR HOTEL INVESTMENT
The amount of investment needed to build a Three Star Hotel project with a total of 75 rooms is estimated to be Rp. 42,639,343,448, – which is used to finance hotel buildings and infrastructure such as equipment and utilities, vehicles and for working capital needs.
The total investment of Rp. 30,167,733,062, – will be financed by own capital of Rp. 10,585,079,406, – or 35%, while the 65% or Rp. 19,582,653,656, – will be obtained from bank credit, consisting of credit. investment amounting to Rp. 16,857,011,157, – and working capital credit of Rp. 2,725,642,499, -.
The physical construction of a Three Star Hotel until it is ready to operate is estimated to take 12 (twelve) months. During the project development period, the amount of investment credit disbursed by the bank was IDR 15,200,000,000. With the assumption that the calculated bank interest rate is 16.5% annually, the total loan interest during the construction period is IDR 1,657,011,157.
Hotel infrastructure costs
The hotel business in Indonesia is growing in line with the increasing flow of foreign tourist arrivals and the trend of large companies conducting business travel activities and domestic tourists (wisnus). For example, in 2012, foreign tourists who stayed or stayed at star hotels, as long as they were in Indonesia were recorded at 6,468,493 people or 21.11 percent, while the number of domestic tourists staying at star hotels reached 24,168,449 people or 78, 89 percent.
In the same year, there were 1,623 star-classified hotels with 155,740 rooms and 238,485 bedrooms. The average room occupancy rate is 56.16 percent or the average number of rooms used is occupied by 1.9 people, while the average bed usage rate is 68.98 percent. To be able to assess whether this investment in the hotel business is feasible and can generate the expected profits in the coming years, it is necessary to prove it by conducting financial analysis using ratios.
Location is very influential with quiet and crowded hotels that you will make an investment. To choose a location it is recommended to choose a hotel that is close to tourist attractions. Because in general, hotels that are close to tourist attractions will always be crowded with tenants, especially during long holidays.
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