Indifferent Indonesian tourists pummel floundering OUE Hospitality Trust

Indonesian tourist arrivals have dipped 9.2%.

Travellers from the region are the bread and butter of the hospitality firm, and Indonesians form a large chunk of their visitors.

It’s therefore a red flag when Indonesian arrivals dip by 11% overall to 2m from Jan-Sep this year, with only one month of positive yoy increase recorded, according to a report by OCBC.

According to OCBC, Indonesians are getting less motivated to travel, owing to the archipelago’s slowing economic growth, aggravated by the relatively strong SGD.

“OUE Hospitality Trust (OUEHT) has been impacted partially by this, as we believe Indonesian tourists contribute ~25%-30% of its room nights occupied,” OCBC said.

Meanwhile, though OCBC noted that it did experience lower room nights from its Indonesian customers in 3Q, the decline was notably less than the overall industry dip.

“We also note that management has been putting in efforts to diversify its customer profile, with encouraging numbers from India, South Korea and longer haul regions such as Europe and U.S,” OCBC said.