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The Restaurant And Hotel Industry Is Affected By A Decline In Purchasing Power, And At The Beginning Of Next Year, It Will Face A 12 Percent Value-added Tax Increase
Saturday, 23 Nov 2024
The Chairman of the Indonesian Hotel and Restaurant Association (PHRI), Hariyadi Sukamdani, stated that the hotel and restaurant industry is currently facing a decline in public purchasing power and budget cuts for business travel by ministries and agencies.
Furthermore, at the beginning of 2025, they will again confront an increase in the Value Added Tax (VAT) to 12 percent.
Hariyadi explained that the decrease in purchasing power significantly impacts the sustainability of hotel and restaurant operations.
According to his analysis, the primary reason for the decline in public purchasing power is online gambling.
"The impact of online gambling is indeed very significant, affecting a wide range of areas. This issue is particularly prevalent among the lower middle class," he remarked to reporters in Jakarta, as quoted on Wednesday, November 20, 2024.
He expressed hope that the government would take serious measures to combat online gambling.
Hariyadi noted that, to date, the government's efforts to address online gambling have not been optimal.
He cited the example of watching a gubernatorial debate, where online gambling advertisements were still visible in the chat section of the broadcast.
Regarding the budget cuts for business travel by ministries and agencies, Hariyadi indicated that the impact would be felt more acutely by hotel operators.
He explained that the hotel business involves a broad supply chain, engaging many parties beyond the hotel owners themselves. This includes vendors supplying food items such as eggs, chicken, beef, vegetables, and others, as well as vendors providing amenities like soap.
Vendors within this hotel business supply chain are expected to be adversely affected by the budget cuts.
Such budget reductions had previously occurred in early 2015, during the initial months of President Joko Widodo's administration.
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