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Indonesia Tourism Report Q2 2011


Indonesia Tourism Report Q2 2011

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Additional Information
Price $530.00
Meta Description No
Publisher Business Monitor International
Date of Report Apr 8, 2011
Quick Overview
Core Forecasts
Tourist arrivals for 2010 were in line with BMI’s forecasts, with Indonesia welcoming just over 7mn tourists over the past year, representing an increase of 9.76% year on year (y-o-y). This strength in visitor arrival numbers underlines our continued bullish stance towards Indonesian tourism for 2011 and beyond. Hotel occupancy rates also rose slightly, to an average of 50.6% for the year as a whole, according to information from the country’s Central Statistics Agency (BPS). Tourist expenditure for 2010 stood at an estimated US$7.6bn, which represents an annual increase of 20.7%.
For 2011, we continue to target strong growth in tourist arrival numbers, believing that growth in the order of just less than 9% y-o-y is probable, taking total tourist arrivals for the year to the 7.63mn mark. This target is in line with the government’s own aims to attract between 7.3mn and 7.7mn tourists to Indonesia through the year. After two strong years of growth in 2010 and 2011, our core forecast is then for Indonesia to consolidate recent gains with a more measured rate of tourist arrival growth, to reach a total of 8.72mn tourists by end-2015.
Garuda IPO disappoints The long-awaited IPO of Indonesian flag carrier Garuda Indonesia has proved something of a disappointment. Although the initial offering raised US$532mn, the shares fell by 17% on their first day of trading on the Jakarta Stock Exchange in February 2011, underlining fears that the government had valued the shares too highly. Only half of the offer was taken up by investors, leaving the underwriters to take up a significant amount of the shares for sale. Following pressure from the government, an offer price of IDR750 per share (at the higher end of an initial range of IDR560-850 set by underwriters) valued the airline somewhat higher than some of its more successful regional peers. This fact, coupled with worsening sentiment towards the local stock market, on fears of higher oil prices and higher inflation in 2011, conspired to send the stock down towards the IDR500-550 area, where it was trading as this report went to press. As BMI suspected, no foreign airline was ready to take an equity stake in the carrier at the present time.
However, despite the poor reception given to the Garuda IPO, low-cost carrier Air Asia Indonesia (AAI) has said that it still plans to sell a 20% stake later in 2011. Company CEO Dharmadi says that the airline still plans to raise US$150-200mn via an IPO on the JKSE during the fourth quarter. The proceeds of the IPO will be used to buy new planes and fund growth, according to the company. AAI has a stated aim of increasing its fleet size to 30 (from 20) by 2015. AAI is arguably in better financial shape than Garuda, with the low-cost airline posting a 37% increase in revenues during 2010, to IDR2.76trn, with net profit up by 350%, at IDR474bn.
Bullish Outlook For Hotel Industry
For 2011-12, there are an expected 13 new hotel openings scheduled for Jakarta, according to the local hotel and restaurant industry association (PHRI), with a further six to be built in Surabaya. The PHRI has also stated that local players Santika and Sahid are to build some 40 new hotels across the archipelago over the coming two years, with the industry witnessing strong interest from foreign investors.
In this context, there is currently a great deal of construction activity in the high-end hotel sector on the island of Bali, which is due to host the 2013 APEC summit. To prepare for the arrival of high-ranking dignitaries to the island, there are several new high-end hotels scheduled for opening in 2011, including Starwood Hotels’ W Retreat & Spa Bali at Seminyak and Pullman Hotels’ Bali Legian Nirwana, which have both now opened. Other high-end hotel chains set to open new properties in Bali over the 2011-13 period include Banyan Tree, InterContinental Hotels Group (IHG), Ritz Carlton and Kempinski.
The arrival of additional high-end properties should do much to boost average room revenues for the country.
Clarification of BMI methodology on hotel industry
In response to recent client feedback, BMI would like to elaborate on the methodology behind how we calculate the number of hotel rooms in Indonesia. Unlike other research houses, which tend to concentrate solely on classified rooms, we have chosen to include both classified and non-classified hotel rooms when preparing our forecasts out to 2015. These figures are obtained from Indonesia’s Central Statistics Agency. We feel that including both the officially and non-officially registered tally of hotel rooms across the archipelago provides a greater understanding of the significant potential offered by the Indonesian hotel industry at the current time. Moreover, we believe that, as the industry develops, several of the nonclassified hotels will choose to join official hotel bodies and become part of classified datasets in the future.
Table of Contents
Executive Summary ........................................................................................................................................ 5
SWOT Analysis ................................................................................................................................................ 7
Indonesia Tourism SWOT ..................................................................................................................................................................................... 7
Indonesia Political SWOT ..................................................................................................................................................................................... 8
Indonesia Economic SWOT .................................................................................................................................................................................. 9
Indonesia Business Environment SWOT ............................................................................................................................................................. 10
Industry Forecast Scenario ........................................................................................................................... 11
Arrivals ............................................................................................................................................................................................................ 11
Table: Arrivals Data, 2007-2015 (‘000, unless otherwise stated) ........................................................................................................................ 11
Accommodation ............................................................................................................................................................................................... 12
Table: Accommodation Data, 2007-2015 (‘000, unless otherwise stated) ........................................................................................................... 12
Expenditure ...................................................................................................................................................................................................... 12
Table: Expenditure Data, 2007-2015 .................................................................................................................................................................. 13
Inbound Tourism .............................................................................................................................................................................................. 14
Table: Inbound Tourism Data, 2007-2015 .......................................................................................................................................................... 15
Outbound Tourism ........................................................................................................................................................................................... 16
Table: Outbound Tourism Data, 2007-2015 ....................................................................................................................................................... 16
Market Overview – Travel .............................................................................................................................. 18
Commercial Airlines ........................................................................................................................................................................................ 18
Global Oil Products Price Outlook .......................................................................................................................................................................... 20
Table: Oil Product Price Assumptions, Q410-Q411 (US$/bbl)........................................................................................................................... 20
Table: Oil Product Price Data And Forecasts, 2008-2015 (US$/bbl) ................................................................................................................. 23
Market Overview – Hospitality ...................................................................................................................... 25
Accommodation ............................................................................................................................................................................................... 25
H5N1 And H1N1 Virus Update ....................................................................................................................... 27
Business Environment Outlook .................................................................................................................... 29
Table: Asia Travel And Tourism Business Environment Ratings ......................................................................................................................... 29
BMI’s Security Ratings .................................................................................................................................................................................... 30
Table: Asia Pacific Regional Security Ratings .................................................................................................................................................... 30
Table: Asia Pacific State Vulnerability To Terrorism Index ............................................................................................................................... 31
Indonesia’s Security Ratings ............................................................................................................................................................................... 31
City Terrorism Ratings .................................................................................................................................................................................... 32
Table: BMI’s Asia City Terrorism Index ............................................................................................................................................................. 33
South East Asia Security Overview .......................................................................................................................................................................... 34
Global Assumptions, Q211........................................................................................................................... 36
Table: Global Assumptions, 2009-2015 .............................................................................................................................................................. 36
Table: Regional Real GDP Growth, 2010-2013 (% change y-o-y) ...................................................................................................................... 37
Table: Selected Exchange Rates, 2010-2013 (average) ...................................................................................................................................... 37
Developed States .............................................................................................................................................................................................. 38
Table: Developed States’ GDP Growth, 2010-2013 (% change y-o-y) ................................................................................................................ 38
Indonesia Tourism Report Q2 2011
© Business Monitor International Ltd Page 4
Emerging Markets ............................................................................................................................................................................................ 39
Table: Emerging Markets’ GDP Growth, 2010-2013 (% change y-o-y) .............................................................................................................. 40
Consensus Forecasts ........................................................................................................................................................................................ 41
Table: Consensus Forecasts, 2011 And 2012 ..................................................................................................................................................... 41
Company Profiles .......................................................................................................................................... 42
Accor Asia Pacific ...................................................................................................................................................................................... 42
Garuda Indonesia ....................................................................................................................................................................................... 43
Lion Air ....................................................................................................................................................................................................... 45
BMI Methodology .......................................................................................................................................... 46
How We Generate Our Industry Forecasts .............................................................................................................................................................. 46
Tourism Industry ......................................................................................................................................................................................... 46
Tourism Ratings – Methodology ......................................................................................................................................................................... 47
Table: Tourism Business Environment Indicators .............................................................................................................................................. 48
Table: Weighting of Components ........................................................................................................................................................................ 49
City Terrorism Ratings .................................................................................................................................................................................... 49
Table: City Terrorism Ratings Methodology....................................................................................................................................................... 51
Sources ............................................................................................................................................................................................................ 51




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