PHRI: 70% of Jakarta Hotel, Restaurant Operators Expected to Reduce Workforce

TEMPO.CO, Jakarta - About 70 percent of hotel and restaurant businesses in Jakarta are expected to lay off their workers due to lower occupancy rates. 

"If this condition continues without any policy intervention to support the tourism and hotel sector, they will be forced to cut the number of employees," said the chair of the Indonesian Hotels and Restaurants Association (PHRI) Jakarta, Sutrisno Iwantono, in a written statement on Monday, May 26, 2025.

Sutrisno said hotel business operators estimate about 10 to 30 percent of layoffs, and 90 percent of them are considering cutting the number of daily workers by 90 percent. 

Additionally, 36.7 percent admitted they would reduce the number of staff. 

Sutrisno revealed that the layoffs are carried out due to the low occupancy rate while operational costs increase, burdening their business sustainability. PHRI Jakarta noted that about 96.7 percent of hotel bosses reported a declining in occupancy rates.

Based on a survey conducted by PHRI Jakarta, the biggest drop comes from the government segment at 66.7 percent, which Sutrisno said lines up with Prabowo's budget efficiency policies. 

"This further exacerbates the hotel industry's dependence on domestic tourists."

Sutrisno also mentioned that business operators have complained about the very small share of foreign tourists occupying hotels in Jakarta. Statistics Indonesia (BPS) data shows that the average percentage of visits by foreign tourists from 2019 to 2023 only reached 1.98 percent per year compared to domestic tourists.

"This reflects the ineffectiveness of promotion strategies and government programs in attracting foreign tourists, especially to Jakarta," said Sutrisno. He urged the government to improve promotional strategies and formulate more effective tourism policies to reach the international market.

The hotel and restaurant industry also faces challenges such as increases in operational costs. For example, water tariffs from the regional water company (PDAM) increased by up to 71 percent, and gas costs surged by 20 percent. The fare hike is further burdened by a 9 percent increase in the provincial minimum wage (UMP) this year.

Business operators also complained about administrative requirements in the form of complex and burdensome regulations and certifications. For example, environmental permits, operating certificates, and alcohol beverage permits. Additionally, industry players also highlighted lengthy bureaucratic processes such as document duplication between agencies and non-transparent costs, which are seen as hindering business sustainability.

Furthermore, Sutrisno said the hotel and restaurant industry has greatly contributed to Jakarta's income, with an average contribution of about 13 percent. Based on BPS data in 2023, there were more than 603 thousand workers dependent on the accommodation and food sector in Jakarta.

The performance decline of this sector is believed to have a domino effect on other sectors such as SMEs, farmers, logistics suppliers, and arts and culture players.

Sutrisno urged the government to take industry players' complaints as a serious warning for the central or regional government. According to him, without concrete steps and proper recovery strategies, the hotel industry is potentially facing prolonged crises that could have widespread impacts on other sectors.

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