February 16, 2025 | 01:06 pm
TEMPO.CO, Jakarta - Chair of the Indonesian Hotel and Restaurant Association (PHRI) Hariyadi Sukamdani is concerned about the condition of the domestic hotel business after the budget efficiency policy emerged. Based on PHRI calculations, budget cuts could cause the national accommodation and hotel business to lose up to Rp12.4 trillion in revenue.
As is known, Indonesian President Prabowo Subianto officially issued a budget efficiency instruction on January 22, 2025. Official travel and meeting activities are components of funds requested by the head of state to be cut.
According to Haryadi, the budget cuts could have a significant impact on the accommodation and lodging business, because the hotel business market share from government spending is still quite large. "In 2024, the government market segment nationally will be around 40 percent," he told Tempo, Saturday, February 15, 2025.
Based on PHRI calculations in 2024, the total profit of hotels throughout Indonesia from the government market is Rp24.8 trillion. Consisting of accommodation or room occupancy of around Rp16.5 trillion and meetings of IDR 8.2 trillion.
So, if business trips and meeting activities are cut by 50 percent, the loss will reach Rp12.4 trillion. Haryadi explained that 3 and 4 star hotels, if totaled, will collect Rp14.1 trillion from the government market in 2024. In addition, 5 star hotels will also lose because they depend on 2.4 trillion from the government market share.
In addition, the efficiency policy also has a significant impact on hotels outside Java. PHRI data shows that the hotel business outside Java even depends on profits from the government market for up to 70 percent.
Haryadi, who is also Deputy Chair of the Advisory Board of the Indonesian Employers Association (Apindo), supports budget efficiency. However, according to him, the hotel business is currently still having difficulty shifting from the government market segment. "Because there is no clear policy direction that supports domestic tourism."
He is worried that if this is allowed to continue, it will have an impact on other businesses. Businesses that have been suppliers to hotels that will be affected are micro, small and medium enterprises or MSMEs to local agriculture.
What he also thinks needs to be anticipated is the hotel's losses that could impact workforce efficiency. In addition, the hotel's sluggish income could also cause bad debts for the hotel business in banking. So he asked the government to help think of policy solutions for the national hotel and tourism business.
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