Unlicensed Homestays Hurt West Java's Hotel and Restaurant Business

The Indonesian Hotel and Restaurant Association (PHRI) in West Java has voiced strong concerns over a significant downturn affecting the region's hospitality sector. Established hotels and restaurants have reported a slump in business from January through July 2026, a period typically expected to see robust activity.

PHRI West Java attributes this economic hardship primarily to the unchecked growth of unlicensed homestays. These unregulated accommodations are reportedly operating without adhering to the same standards or regulations as formal hospitality businesses, creating an uneven playing field.

According to the association, the surge in unauthorized homestays is directly impacting the revenue and viability of licensed hotels and restaurants across West Java. The issue highlights a growing challenge for the formal tourism sector, as it struggles to compete with informal lodging options that may offer lower prices due to reduced overheads and lack of regulatory compliance.