Still, this upward trend is a welcome sign for the sector after nearly two years. Meanwhile, the government has been doling out support through various means to keep hotels afloat.
Hotel taxes in 10 of the country’s top tourist destinations have been scrapped for six months as part of an IDR 3.3 trillion ($230 million) tax relief package announced in the early months of the pandemic .
The amount of grants then increased last year. The Ministry of Tourism also launched the “Work from Bali” program in the same year to send 25% of Indonesian civil servants to live and work remotely from hotels in the holiday destination, which welcomed only 51 tourists last year. compared to 6.2 million in 2019.
“For the past two years, the only way to enter Indonesia was basically either as an Indonesian citizen or by having an Indonesian work permit,” Naouri says.
However, activity has picked up since the lifting of restrictions for domestic and international travellers, suggesting the move is already bearing fruit.
“Major Australian airlines are resuming commercial flights to Bali for international travelers who in 2019 accounted for almost 16% of total visitor arrivals to the island,” says Naouri. This has led to an increase in hotel bookings this month and will likely increase over the next two to three months, according to hotel operators and owners Naouri spoke to.
Likewise, the resumption of domestic travel will benefit hotels, especially in Jakarta. “With the gradual return of interstate travel, more MICE and business events are expected to take place in Jakarta over the next couple of months,” Naouri says.
Path to reopening
Challenges such as the resurgence of Covid-19, which Indonesia has experienced on several occasions over the past year, and the remaining restrictions could further derail the progress made.
Without the quarantine requirements, there are still many entry barriers for international travelers entering the country. Current measures for tourist destinations in the country include PCR testing on arrival, mandatory travel insurance, minimum three-night reservation at a certified hotel and visa on arrival, among others.
“These obstacles don’t really help to reopen the country,” says Naouri. “The government should seriously consider making it more flexible to stay competitive with other destinations in the region.”
For example, Thailand’s quarantine exemption program (Test and Go) and its sandbox program for Phuket and Krabi offer more simplified entry requirements for travellers.
As more countries in the region gradually reopen to tourism, the challenges will only intensify, but Naouri is optimistic about Indonesia’s prospects of staging a strong comeback.
“Green shoots of recovery are emerging for the Indonesian hospitality sector, with occupancy levels expected to reach 50% to 60% this year,” Naouri says. “It will likely improve further next year before a full recovery in 2024.”