Interview: Shirley Tan, Vice Chairman, Rajawali Property Group
How do you assess the recovery in the tourism industry since the Covid-19 pandemic?
SHIRLEY TAN: The recovery of Indonesia’s tourism industry after the pandemic has been robust, particularly in relation to international tourist arrivals. We recorded about 16.1m foreign visitors in 2019, and projections for 2024 suggest that numbers could approach or even exceed this figure. A notable development is the sharp increase in domestic travel, which was around 14% higher in 2023 compared to 2019. We observe that travellers today are prioritising quality and lengthier stays. In terms of trends influencing the hospitality sector, there has been a heightened focus on sustainability and energy efficiency, which are now key factors guiding the development of new hotels and resorts across the country.
What is the outlook for the luxury hotel market over the medium to long term?
TAN: The outlook for the luxury hotel market remains positive over the medium to long term. The resilience of this segment during economic fluctuations in recent years highlights sustained demand, particularly among international tourists from Europe and the US – the Chinese market is not back to pre-pandemic levels yet. The key to supporting growth in this segment is the engagement of these global markets through marketing and partnerships that emphasise Indonesia’s unique offerings in luxury travel.
To what extent have strategic efforts succeeded in spreading the benefits of tourism beyond traditional destinations such as Bali?
TAN: Evaluating efforts to decentralise tourism from locales like Bali, considerable progress can be seen, especially with strategic policies like visa relaxations and the establishment of special economic zones promoting medical and wellness tourism. Moreover, initiatives such as the establishment of InJourney – the super-holding entity for state-owned tourism entities – are integrating critical tourism infrastructure, from the creation of special economic zones to the improvement of airline connectivity. However, more can be done to bolster these efforts, particularly from a private investment perspective. Improved coordination between government initiatives and private investment can significantly amplify the growth and appeal of these new sites.
Which emerging destinations do you view as having the most promising potential for boosting hotel and hospitality investment?
TAN: Emerging destinations such as Labuan Bajo and the Komodo islands hold significant potential for hospitality investment. The appeal of these locations is not just in their natural beauty but also in their burgeoning infrastructure, facilitated by strategic governmental efforts to improve connectivity. Moving forward, I would advocate for investment incentives from the upcoming administration to further support and accelerate development in these areas, ensuring they can match and eventually replicate the success of established destinations like Bali.
In what ways can property developers approach the challenge of catering to both domestic tastes and the expectations of foreign visitors?
TAN: Indonesia’s large and increasingly prosperous population is pivotal to the burgeoning domestic tourism industry, which has proven critical when international travel was limited during the pandemic period. Property developers should focus on this demographic by designing experiences that cater to local tastes while maintaining standards that meet international expectations. This dual approach not only diversifies the consumer base, but also stabilizes the market against future global disruptions, ensuring sustained growth in the tourism sector.
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