[Brief] Indonesia embraces disruption in hospitality sector; Airbnb to expand rapidly in ASEAN’s largest economy

Online hospitality disruptor Airbnb has announced plans to expand their business in Indonesia.


Airbnb considers Indonesia to be the key market in ASEAN region given that Indonesia is one of the most populous nations in the world, and in addition, the one of the most popular tourist destination in Asia.

Airbnb to onboard Indonesia locals to use the app

Airbnb spokesperson shared Indonesia is one of the fastest growing countries in terms of inbound travel, with nearly 38,000 local homes currently listed on its rental website.  As part of plans to on-board customers, Airbnb developed plans to teach Indonesians how to use the application. Airbnb is also actively working with Indonesia government. This collaboration is a stark difference in its approach in other nations.

Airbnb’s move is in tandem with regulatory changes

Indonesian Ministry of Tourism Arief Yahya has recently launched a homestay development programme to boost accommodation supply in the country. The Minister said, “We are developing connectivity into and within Indonesia, so we need to be prepared with the accommodation facilities, especially in the 10 ‘New Bali’ destinations, which we are focusing on.” This model allows Indonesia to rapidly increase supply of rooms to accommodate the rapidly increasing tourists inbound Indonesia. This is a good development for online platforms such as Airbnb.

Indonesia Tourism Minister acknowledges the need to embrace new reality

Arief Yahya shared, “Sooner or later every company, institution and country is going to face disruption and the digital era is going to make it come faster. One of the main targets of this digital disruption is conventional companies that have built up a good reputation over the years.”

Consistent with the Minster’s representations, Airbnb seems to be in the right place, at the right time for further disruption within the hospitality sector in Indonesia.

Indonesia international tourism receipts (current US$, billion)

Source: World Bank

The time is ripe to embrace disruption – Chinese tourists are familiar with mobile booking of rooms

Given recent Belt and Road Initiative, Indonesia, as well as the rest of ASEAN, will experience increasing flow of Chines tourists. In one source, more than 420,000 Chinese tourists booked accommodation through Airbnb in the economies participating in the Belt and Road Initiative in the past year. Indonesia will want to be part of this – allowing their locals to make money off Chinese tourists.