Indonesia’s hotel investment pipeline to reach US$150m in 2026

Thanks to the recovery in tourism and sustained government support.

Indonesia’s hotel sector is expected to strengthen toward the end of 2025 and into 2026, supported by seasonal tourism demand, government-led travel incentives and a recovering investment pipeline, according to Savills.

Savills said the government is increasingly optimistic that national tourism performance will improve in Q4 2025, underpinned by the Christmas and New Year holiday period, which traditionally represents the peak season for the hospitality sector.

Ahead of the year-end holidays, Savills noted that the government is preparing a tourism stimulus package, including discounts on land, sea and air transportation, aimed at encouraging higher levels of domestic travel. These incentives are expected to support mobility and drive hotel demand across key destinations.

Savills also highlighted early signs of recovering household consumption ahead of the 2025/2026 festive season. This improvement in consumer spending is expected to provide support to hotel revenues toward year-end, potentially offsetting the occupancy decline seen since early 2025.

In addition, Savills said the government is considering hotel tax discounts as a further stabilisation measure. While such incentives could help support occupancy levels, Savills cautioned that their effectiveness will depend on smooth and timely implementation.

Beyond short-term measures, Savills said the government continues to strengthen tourism development strategies, promotional initiatives and cross-sector collaboration, with the aim of building a more inclusive and sustainable tourism ecosystem over the longer term.

Looking ahead, Savills said Indonesia’s hotel market outlook for 2026 remains optimistic, supported by a strengthening investment pipeline that could reach up to US$150 million. This recovery is being driven by improving tourism fundamentals and sustained government support.

According to Savills, investor interest is anchored by strong performance in two core markets. Bali continues to demonstrate a robust recovery, underpinned by exceptionally strong fundamentals in the luxury hotel segment, with performance reportedly outpacing other regional luxury destinations, including Phuket and Koh Samui in Thailand.

Meanwhile, Jakarta retains its strategic importance as Indonesia’s primary gateway city. Savills highlighted notable growth in average daily rates in the capital, supported by a rising volume of government and corporate MICE events.

“Together, Bali and Jakarta form the backbone of Indonesia’s improving hotel investment landscape,” Savills said, adding that these markets are expected to play a central role in shaping hotel investment activity in 2026.