Jakarta – The Chairman of the Indonesian Employers Association (Apindo), Shinta W. Kamdani, stated that the massive budget efficiency measures implemented by the Prabowo administration in early 2025 could potentially dampen the performance of the domestic tourism sector, with the hotel industry being hit the hardest.
Hotel occupancy rates have reportedly dropped significantly due to the reduction in official travel and activities by ministries and agencies as a result of the efficiency measures.
“We are currently reviewing the situation, and indeed, with this efficiency, it has had a significant impact on hotel occupancy, and naturally, this will also affect the workers,” said Shinta, who spoke to reporters at the Ministry of Manpower’s office on Thursday, March 27, 2025.
“We are continuously monitoring it, but this is something we are concerned about. So we are compiling data because many hotels have been significantly impacted,” she added.
At the same time, Shinta mentioned that they have communicated with the government regarding the decline in hotel occupancy. However, in the end, business owners cannot do much because the budget efficiency policy is in effect as per Presidential Instruction (Inpres) No. 1 of 2025.
“That’s why now, what we are focusing on is finding solutions. If this (efficiency) is implemented, what do the business owners, especially those affected, need? This is all being discussed,” Shinta explained.
“We really need to look at the whole picture; we cannot just focus on the efficiency. So, how will this efficiency impact, and what is needed? It’s useless to just say the efficiency has an effect without solutions to help the affected businesses,” she continued.
As an example, the government’s budget efficiency measures have significantly impacted hotel occupancy in various regions. One such instance can be seen in the hotel sector in West Java.
The Chairman of the Indonesian Hotel and Restaurant Association (PHRI) in West Java, Dodi Ahmad, stated that since the Presidential Instruction on budget efficiency was issued, hotel entrepreneurs in Bandung have suffered losses amounting to Rp 12.8 billion due to the cancellation of events by the government.
“Up to today, the amount of cancellations (in hotels) in Bandung has reached about Rp 12.8 billion, and this number could continue to rise,” Dodi said, as confirmed by DetikJabar on Thursday, February 13, 2025.
According to Dodi, the cancellations for government-related events were not only from regional governments but also from the central government and ministries.
Furthermore, the East Java PHRI mentioned that hotel occupancy at the beginning of 2025 has also been sluggish due to the budget efficiency measures. Several hotels in Surabaya have experienced a drop in occupancy of up to 50%.
“PHRI has conveyed this together with the Ministry of Finance, the Ministry of Home Affairs, and others. We cannot ask for the budget efficiency to be canceled, so our recommendation is that tourism, including hotels and restaurants, should also be included in the priority programs,” said the Chairman of PHRI East Java, Dwi Cahyono, on Tuesday, February 25, 2025.
