Indonesian travel industry members are predicting a rise in quality business travel and events infrastructure in East Kalimantan once the destination becomes the country’s new capital.
President Joko Widodo had made clear plans to move the current capital from Jakarta to the Indonesian portion on the island of Borneo, straddling the two regencies of North Penajam Paser and Kutai Kartanegara. The two regencies will become the centre of administration, while Jakarta will remain the country’s business and economic centre.
Sudarsana, general manager of business development of Santika Indonesia Hotel and Resorts, said the relocation would boost the reputation of both regencies among the business community, and raise their potential as business events destinations.
He added that the relocation of the presidential palace, ministries, house of representatives and Bank Indonesia will drive the emergence of new star-rated hotels and meeting facilities across East Kalimantan, in order to meet the government and businessmen’s need to hold business events.
Santika Indonesia Hotel and Resorts has plans for a new hotel in East Kalimantan, but Sudarsana has kept mum on its location as the project is still under discussion. He also predicted that Kutai Kartanegara and North Penajam Paser will follow in the footsteps of Balikpapan, East Kalimantan’s largest city that the government has named as one of the country’s top 16 MICE destinations.
According to Haryadi Sukamdani, chairman of Indonesia Hotel and Restaurant Association, many business events have been held in hotels in East Kalimantan, especially in Balikpapan, but these meetings are usually national gatherings, not international ones.
He opined that convention centres will soon be built in East Kalimantan.
Industry players agree that the capital city move will spread development across the Indonesian archipelago, and raise the infrastructure standards for Kutai Kartanegara and North Penajam Paser. International access to the future Indonesian capital can come through the Sultan Aji Muhammad Sulaiman Airport in nearby Balikpapan.
However, with the relocation costing a hefty 466 trillion rupiah (US$33 billion), Sudarsana is worried that the central government may issue a ban on all government bodies from renting meeting halls in hotels in a bid to cut costs.