Indonesia’s hospitality sector is entering a phase where scale is no longer defined by how many hotels open each year. Growth now depends on how capital is structured, how partnerships are aligned, and whether projects are built on realistic operating assumptions. That was the focus of the panel Driving Scale in Indonesia: Synergizing Capital Growth and Strategic Partnerships, held during the Hospitality Indonesia Conference in Jakarta last February.
Moderated by Elvan Prawira, Director – Hotel Division at Amantara by Agung Sedayu, the discussion featured Xavier Droin, Managing Director of NOVA Asset Management; David Roberts, Chief Operating Officer of Fusion Hotel Group; and Jonathan Mokalu, Director of Business Development at Artotel Group.
One early exchange addressed ESG positioning. Panelists noted that sustainability certifications have limited direct impact on asset valuation at this stage and are often treated more as marketing or branding tools than financial drivers.
The discussion then shifted to what Indonesia needs to improve to attract more investment. Bureaucracy was raised as a recurring issue. David pointed to Vietnam as a comparative case, saying regulatory streamlining and clearer land ownership and partnership structures have made it easier for foreign investors to enter.
“I think the government has taken a lot of steps to take the bureaucracy out of it and make it much easier for foreign investment to come in,” he said, referring to Vietnam’s approach. He also highlighted infrastructure investment and connectivity in Tier 1 and Tier 2 cities as key factors that strengthen investor confidence.
Marketing at the national level was another factor. David said Thailand’s strong destination marketing makes it attractive to investors, arguing that investment climate reform must be matched with consistent global promotion of Indonesia as a destination.
Xavier added fiscal incentives to the discussion. He welcomed Indonesia’s special economic zone initiatives but suggested expanding such zones to offer more tax advantages that could further encourage foreign capital. He also raised concerns about annual minimum wage (UMP) increases.
“In some areas, we see double-digit increases every year,” he said, noting that payroll is becoming one of the largest cost pressures for operators. “Increasing 6–8% yearly is a challenge when average rates are not moving at the same pace.”
The conversation then moved to organisational scale. Elvan asked David how an operator evolves from managing a single resort into a multi-market platform.
David said growth requires understanding each market individually rather than applying a uniform model. Within Vietnam alone, he noted, demand patterns, seasonality and source markets differ significantly by location. Expansion into Thailand through the acquisition of the Glow brand required a different operational setup again.
“When you're growing, you're expanding, it’s understanding in that location what you need to support,” he said. “And making sure you put the right support in place to service those properties.”
The same principle, he added, would apply to Indonesia.
An audience question shifted the focus to profitability: how are hotels in service-driven economies like Indonesia improving EBITDA margins, and how are investor expectations evolving with new technologies?
Jonathan said technology, including AI applications, is increasingly discussed, but hospitality remains labour-intensive by nature. Service standards still depend on people.
“At the end of the day, technology is just assisting you to do better,” he said.
He added that many Indonesian hotel owners are first-time owners. Their motivations tend to fall into two categories: prestige or recurring income. Technology alone does not fundamentally change those motivations; performance in the market does.
David brought the discussion back to fundamentals. From an investment perspective, he said, selecting the right model is critical before operational optimisation even begins.
“Do you have the right product for that market?” he said. “Some markets can support luxury hotels. Some can’t.”
If the initial positioning is wrong, operational tweaks will not materially improve EBITDA.
From an asset management standpoint, Xavier identified payroll as the key structural challenge. Labour costs are rising quickly, and operators must adapt with leaner teams and multi-skilled staff. Outsourcing certain functions, particularly food and beverage where scale is insufficient, can also improve margins.
“That’s the beauty of serviced apartments,” he said, noting their lighter F&B component and typically higher EBITDA margins as a percentage.
Still, he cautioned that model selection must match the market.
As the session drew to a close, Elvan asked each speaker for a final takeaway.
David said operators should adopt a blended growth strategy, combining asset ownership with asset-light approaches rather than placing everything on the balance sheet.
Jonathan urged hotel owners to carefully review long-term management agreements before signing, especially 20-year contracts. “Sometimes the devil sits in the details,” he said, stressing the importance of independent advisory input.
Xavier ended on a measured note. Despite regulatory and cost pressures, he said the Indonesian market remains fundamentally strong. “We’re still surviving. We’re improving. This F&B will still continue in Indonesia,” he said, referring to foreign direct investment flows.
Elvan closed with a broader reflection: when the next generation looks at the hotels being built today, will they see merely financial assets — or a legacy?
The discussion suggested that capital can build the asset. But scale, discipline and strategic partnerships will determine whether Indonesia’s hospitality growth becomes something more durable than expansion alone.
