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HOTEL entrepreneurs who are members of the Indonesian Hotel and Restaurant Association (PHRI) Jakarta are planning to reduce their workforce, citing a decline in occupancy and revenue. This condition is primarily driven by the government’s budget efficiency policy.
In a survey conducted by PHRI Jakarta in April 2025, Chairman of BPD PHRI Jakarta, Sutrisno Iwantono stated that 96.7% of hotels reported a decrease in residential levels. A significant majority of respondents, approximately 70%, indicated that they would be compelled to reduce their workforce if this condition persisted.
Sutrisno stated at a press conference on Monday, May 26, 2025, that the number of employees from each hotel will be reduced by 10% to 30% if no efforts are made to improve. Furthermore, that 90% of respondents had reduced their daily work force, and 36.7% planned to reduce staff.
He has identified several factors contributing to the hospitality industry’s deteriorating conditions in Jakarta. First, there has been a decrease in the level of residential and income, with 66.7% of respondents indicating that the government market segment has experienced the most significant decline due to the budget efficiency policy implemented by the government.
Sutrisno added that the decline in the government market has been exacerbated by the hotel industry’s reliance on domestic tourists. Foreign tourists contribute a relatively small percentage of total visits to Jakarta, accounting for 1.98% annually, in comparison to domestic tourists.
Secondly, there has been an increase in operational costs. Sutrisno revealed that entrepreneurs in this industry must deal with a considerable increase in operational costs.
He stated that water tariffs from the Regional Water Company (PDAM) increased by 71%, while gas prices surged by 20%. Entrepreneurs are increasingly burdened by the annual increase in the Provincial Minimum Wage (UMP), which recorded an increase of 9% this year.
Another significant factor to consider is the regulatory and certification process. Sutrisno stated that his party encountered administrative challenges in the form of regulations and certification processes that were considered complicated and burdensome.
He stated that a variety of permits must be obtained, including environmental permits, certificates of appropriateness for function, and alcoholic beverage licensing. Furthermore, the length of the bureaucratic process, the duplication of documents between agencies, and the lack of transparency in costs are considered to impede business continuity.
“If the hospitality industry does not implement concrete steps and proper recovery strategies, it risks experiencing a prolonged crisis with the potential to extend to other sectors,” he said.
In light of these developments, BPD PHRI Jakarta has strongly urged the government to take proactive, strategic measures. Furthermore, the hotel and restaurant industry has contributed significantly to the initial economic development of the Jakarta area, with an average annual impact of approximately 13%. According to data from the Central Statistics Agency (BPS), as of 2023, the accommodation and food service sectors in Jakarta employed over 603,000 individuals.
The recommended strategic steps include the easing of government budget policies for official travel and meeting activities, as well as increasing more directed and sustainable tourism promotion.
First, there is a need to control illegal accommodations that damage the market and lack official permits. Second, there is a need to review water tariff policies, industrial gas prices, and sectoral UMPs. Third, there is a need to simplify the licensing and certification process, including integrating instant systems to make it more efficient and transparent. [bisnis.com/photo special]
