Indonesia’s economy: outlook

Erastus Radjimin, a successfull hotel entrepreneur and CEO of ARTHOTEL, talks about the outlook for the Indonesian economy.

What is the outlook for the economy in Indonesia?

If you look at it from the perspective of the growth of Indonesia’s economy over the last couple of years, people started building hotels and developing properties with the cash coming in from the oil and gas and mining industry when it was at its peak.

Now with oil, gas and mining not faring as well we have seen a decrease in the number of hotels being developed over the last years. However, people who build hotels or are developing property these days are educated owners in that they really understand what they are doing and they have the same business models to develop a property business as hotels, hospitals or real estate. It has started filtering out the owners who all of a sudden have a lot of cash and decide to start building compared to the core owners whose bread and butter is developing and building.

We see a lot of movement in the industry and I think that it attracts international hospitality companies to come to Indonesia to get a share of the pie. Luckily we have a huge population in Indonesia and our population has the largest amount of young working age people compared to China and India. Our political situation is stabilising and our economy is improving in certain sectors. It’s been a good ride so far with the growth of millennial travellers within Indonesia supported by the young growth age and people are starting to understand that communication is easier with the internet and social media.

I think it’s beneficial for us to be seen in social media in terms of our brand, communicating with people, our image and the concept.