The COVID-19 outbreak significantly hit demand of the Serviced Apartment sub-sector. Most of Serviced Apartment operators are struggling with new demand inquiries as some new lease contracts for expatriates were postponed or canceled due to the travel restriction applied in some countries. Demand inquiries from short-stay guests for weekend “staycation” significantly increased the occupancy rate of Serviced Apartment sub-sector to 47.4% by end of 2020, despite the increasing numbers of new confirmed COVID-19 cases.
Under the “new normal condition”, Serviced Apartment will still enjoy occupancy from the short-stay guests, especially during holiday season in next year. The vaccine distribution schedule on next year is expected to expedite the re-opening of the international traveling to Indonesia which will improve demand enquiries for rental apartment sector. New omnibus law regulation will also give easiness for expatriate workers to work in Indonesia, which is expected to increase demand for rental accommodation. Average rental rate for the rental apartment sector will remain stable and the market is expected to recover in 2021.
As the increasing confirmed cases and the limited availability of healthcare facilities, more hotels are converted into emergency hospitals. Hotel operators are struggling to maintain the occupancy during the pandemic, and not a few hotels were closed. Throughout 2020, occupancy rate could reach only below 50%. After the relaxation of the PSBB, the hotel performance gradually improved. The business of 3-star and 4-star hotels in Jakarta is expected to recover faster than the 5-star and luxury hotels.
Hotel business improvement has gradually appeared in the end of the year 2020 despite the increasing confirmed covid-19 cases. Hoteliers see that improvement of the market will continue to 2021, conceding that covid-19 vaccine have been well distributed by the first semester of 2021. The more advanced implementation of the omnibus law is expected to attract foreign investment and give positive impact to the hotel occupancy, particularly those located in the CBD area. In response to the uncertain conditions due to the pandemic, hotel occupiers will expect longer booking window and more flexible reservation system. Safety and hygiene will become the major considerations of the hotel occupiers in choosing their hotel accommodation. Average rental rate (ARR) will remain stable during the recovery period in 2021.