The Strategies of Hotel Investment Business in Indonesia that Make Profits Can Be Optimal

From the type of management, there are 2 types that can be selected and both have their own advantages and disadvantages. You can manage your hotel business in a self-managed or branded manner. What are the differences, and the advantages and disadvantages?

Growing activity from Asia Pacific foreign investors for Hotel Investment Business

Asia Pacific is the only region looking to grow the volume of hotel transactions this year, according to the latest JLL Hotel Investment Outlook report. The international real estate consultant anticipates reaching a total transaction volume for Asia Pacific of $ 9.5 billion by 2019, a 15 percent increase compared to 2018.

Senior Vice President, JLL Hotels & Hospitality Group, Corey Hamabata, said 2018 was a year of recovery for the main hotel market in Indonesia with big cities such as Jakarta and Surabaya which were almost at the end of their development cycle, while Bali showed a very fast and substantial recovery after the eruption of Mount Agung at the end of 2017. As a result, the volume of transactions in Indonesia has decreased compared to previous years.

However, this year a growing activity from foreign investors as well as types of investor investors in anticipating the recovery of these markets.

Branded or Buying a Hotel Franchise

Branded means building and managing hotel business investments by buying hotel franchises from the franchisor. Here are the advantages and disadvantages:

Advantages of Hotel Investment Business in Indonesia:

  • Management of hotel management and operational systems will be much more professional.
  • The name of the hotel is well known.
  • Employee development is well structured.
  • Tax calculation by experts and guaranteed quality standards.

Deficiency of Hotel Investment Business in Indonesia:

  • Need to pay management and franchise fees to the franchisor.
  • You cannot determine the management yourself because it has been regulated by the franchisor.

Planning Strategy to Set Up Hotel Investment in Indonesia

Have careful planning and accurate strategies so that the results of your hotel business profits can be optimal. Here comes the planning strategy!

# 1 Establishing Capital

Starting a hotel investment business requires a lot of capital. But that doesn’t mean you need to prepare 100% capital. You can prepare half of it and the rest you can borrow from the bank.

# 2 Create a Feasibility Study or Feasibility Study

A feasibility study will be very helpful in building a business because it can provide a clear and detailed picture of the business prospects that will be run.

With a feasibility study, you can determine the number of rooms that must be built, the various facilities that will be offered up to the amount of benefits you will get, and how long it will take that benefit. This feasibility study will prevent big losses that you might bear because you plan carefully. You need to consult this plan with a professional hotel business consultant.

# 3 Taking care of building permits and cooperation with construction consultants or architects

To build a hotel, of course you need to pocket a number of permits from related state institutions. One of them is a building permit, which is also accompanied by the design drawings of the hotel that have been made by the architect. Include in planning to involve architects with trusted track records and who can work together to design and build hotels in a cost efficient manner.

 # 4Designate a Supervising Contractor and Consultant

If the design of your hotel has been completed and the building permit or building permit from the local government has been signed, the next step is to determine the hotel construction contractor. They are the party who will execute the existing designs which can be obtained through a tender or direct contact.

While determining the contractor who will work on the hotel construction, you also need to contact the Supervision Consultant who will be responsible for monitoring the progress of the construction. This is very important so that the construction process carried out by the contractor can be well monitored so that the construction completion plan can be realized according to the previously planned deadline.

Here is Message to candidates and hotel entrepreneurs

To candidates and hotel entrepreneurs as well as top hotel management executives so that they will know more that currently the business map has changed, so we must change in selling hotel products, starting from the price strategy, marketing to packaging that must be considered. .

Currently, what is needed is to build a hotel quickly in less than 6 months, and the return on investment must also be fast, at least less than 5 years. That is what is called the hotel business revolution when we want to build hotels.

Meanwhile, to maintain the market, existing hotel business owners need to create new business models, if they want to continue to experience increased occupancy. In Solo, there are more and more hotels, the more productive, the occupancy decreases. Like in the city of Solo today, for four stars I predict the return on investment could be over 15 years. As for smart, investing in hotels is building the hotel for no more than six months and the BEP for less than five years

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