Hotel developers are scaling back expansion plans and delaying projects in Indonesia to minimise risks as the rupiah continues to weaken and interest rates remain high.
Current market conditions are making investors more selective and changing the way they approach new opportunities.
Eduard Pangkerego, COO of Artotel Group, said the impact is already being felt in the company’s pipeline, with some owners adopting a wait-and-see approach. Artotel currently has 39 hotel projects under development, with some taking longer than planned.
“Some projects that were expected to be completed within the next six to eight months are now taking longer as owners try to reduce risk,” Eduard said.
Maulana Yusran, secretary general of the Indonesian Hotel and Restaurant Association, said higher financing costs are putting greater pressure on investment decisions, making new hotel developments and expansion plans among the hardest-hit areas.
“Under the current condition, the risks are higher. Many investor are being more careful before expanding because develop a new hotel requires a large amount of capital,” he said.
Monica Koesnovagril, head of advisory services at Colliers Indonesia, said investors are increasingly favouring assets with stable returns.
“Hotels with stable cash flow are becoming more attractive as investors look for opportunities to improve existing assets. We are seeing more interest in hotel acquisitions, brownfield projects and asset repositioning, including rebranding, as owners look to increase the value of their properties,” she said.
According to Colliers Indonesia, at least five hotels in Jakarta have undergone rebranding over the past year, while several rebranded properties also opened in Bali in 1Q2026.
Mora Group has also seen growing interest from hotel owners seeking management partners for rebranding projects.
“Most of the owners coming to us are those whose contracts are about to expire, while some others are looking to maximise the value of their existing assets,” noted Andhy Irawan, CEO and founder of Mora Group.
Despite the cautious sentiment, Monica believes interest in Indonesia’s hospitality market remains strong, particularly among investors from China and Thailand.
“Indonesia’s advantage over other regional markets lies in its large domestic market, which generally serves as the end user base, as well as the relatively diverse investment opportunities still available,” she said.
She added that several investment discussions that began last year have entered the due diligence stage, although investors are taking more time before making final decisions.
