Hotel Entrepreneurs Express Concerns As 50% Of Government Orders Are Canceled

Hotel industry stakeholders have reported feeling the strain from President Prabowo Subianto's directive to tighten business travel. This policy has resulted in significant losses for hotels due to a sudden increase in canceled business travel reservations. Maulana Yusran, Secretary General of the Indonesian Hotel and Restaurant Association (PHRI), stated that the repercussions could severely impact the hospitality sector, as business travel contributes substantially to hotel revenues, rivaling that of leisure tourism.

"The effects are already being felt, as cancellations have begun to occur. The letter from the Minister of Finance urging ministries and agencies to implement extensive efficiency measures will undoubtedly have an impact. We know that government activities contribute between 40-60% to the hotel market, which is quite significant," he remarked to CNBC Indonesia on Monday, November 18, 2024.

The impact of canceled business travel is widespread across Indonesia, affecting both tourist destinations like Bali and Yogyakarta as well as other regions. "Total cancellations are nearly 40-50%, which is considerable, given the large contribution of government activities to hotels," Maulana noted.

In addition to hotels, other sectors are also affected due to the extensive supply chain ecosystem associated with the hospitality industry, including vendors supplying food and beverage essentials. This sector also relies heavily on the movement of people.

"When we discuss domestic tourists, it is important to note that not all are traveling for leisure; many are traveling for business. Even in Bali, the dependence on government activities is quite significant, as international meetings are often organized by the government," Maulana added.

Previously, President Prabowo Subianto attended the National Coordination Meeting of the Central Government and Regional Governments for the year 2024 at the Sentul International Convention Center, located in Bogor Regency, West Java, on Thursday, November 7, 2024. While Prabowo's directives were not open to the media, several important points were conveyed. "During today's National Coordination Meeting, I instructed all regional leaders to prioritize efficiency and productivity in their duties," Prabowo stated, as quoted from his official X account.

This instruction was promptly acted upon by Finance Minister Sri Mulyani Indrawati, who issued a circular addressed to the ministers of the Red and White Cabinet, the Attorney General, the Chief of Police, heads of Non-Ministerial Government Institutions, and the leaders of State Secretariat Institutions. The letter, numbered S-1023/MK.02/2024 and dated November 7, 2024, requests that state officials implement efficiency measures in travel expenditure for the 2024 fiscal year. This efficiency initiative is based on President Prabowo Subianto's directives during cabinet meetings held on October 23 and November 6, 2024. "In response to the President's directive for ministries and agencies to achieve efficiency in travel expenditures," stated Deni Surjantoro, Head of the Communication and Information Services Bureau of the Ministry of Finance, when confirmed by CNBC Indonesia on Saturday, November 9, 2024.

Tag: Hotel Industry Stakeholders Indonesian Hotel And Restaurant Association Maulana Yusran PHRI