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Hospitality industry braces for tougher periods in ‘survival mode’
The Indonesian Hotels and Restaurants Association (PHRI) has asked the government to reconsider a stipulation that orders ministries to cut spending for official trips by a minimum of 50 percent as well as to refrain from hiking value added tax to 12 percent next year.
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Passengers of KA Menoreh, which serves the Jakarta-Semarang route, queue on Dec. 23, 2023, to enter the boarding area of Pasar Senen Station in Jakarta. (Antara/Aditya Pradana Putra)
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local hospitality business group is anticipating multiple blows to the already struggling industry as the government is set to introduce policies that could hurt the tourism sector, saying that current developments have put them in “survival mode”.
The Indonesian Hotels and Restaurants Association (PHRI) said on Nov. 19 that it had written a letter to the Finance Ministry and President Prabowo Subianto asking them to reconsider a stipulation that orders ministries to cut spending for official trips by a minimum of 50 percent.
The association also urged the government to refrain from hiking value added tax (VAT) from 11 to 12 percent starting January next year, as is stipulated in the 2021 Tax Harmonization Law.
PHRI secretary-general Maulana Yusran told The Jakarta Post on Nov. 19 that businesses have prepared massive efficiency measures to stay afloat. This includes cutting costs and temporarily reducing employees’ working hours.
Separately, Yusran said that as of Nov. 27, the government had yet to respond to the business group’s petition.
PHRI chairman Hariyadi Sukamdani said on Nov. 19 that the industry now could only employ 70 to 80 percent of its pre-pandemic workforce, stressing that the rate was decreasing amid a decline in occupancy rates, especially in Eastern Indonesia.
He attributed the drop to the government halting official trips and ceremonies to save money, as these typically account for 40 to 60 percent of a hotels’ revenue.
