The Indonesian government is set to increase the regulation and oversight of its tourism accommodation industry with new regulations requiring all hotels, villas and short-term rentals to have valid operating licences by March 31, 2026. Properties that are found to be in violation of this rule may have their listings removed from OTA platforms, according to the Ministry of Tourism. The implementation of this new policy will reduce the significant gap between the number of accommodations available for rent that are listed online as opposed to those that are registered with Indonesia's national business registration system. The Indonesian government believes that the enforcement of this policy will improve guest safety, increase tax compliance and provide a level playing field for operators in Indonesia's ever-expanding tourism market. In addition, there has been a significant lack of compliance to the regulations, which were identified in a nationwide mapping survey conducted in late 2025. Thousands of properties were found to have been operating without recognised business licences while actively advertising their vacated rooms and villas on OTA platforms. There are over 29,000 listings of non-hotel types of accommodation (e.g. homestay, guesthouse, etc.) in Bali but only about 14,500 have been registered legally through formal channels; there are also about 5,000 listings of hotel types of accommodation (e.g. hotels and motels) in Jakarta, of which only about 1,500 (or 28%) are valid operationally. According to government officials, this discrepancy has resulted in the misrepresentation of tourism data and has reduced the ability to enforce safety, hygiene and service standards. Additionally, licensed hotel operators are concerned that unregistered competitors have lower operating costs than they do, creating a disadvantage to them in the hospitality sector. Licensing will be completed using the OSS System The Ministry of Tourism has stated that every provider of accommodation must provide their appropriate licenses through the OSS system (the National Online Single Submission) by March 2026 or else run the risk of being delisted from the OTA (assuming that the OTA would still be using their system after the stated date) and consequently losing a substantial portion of their bookings and revenue.
The Ministry of Tourism will continue to work closely with the local government and OTA's to ensure that compliance is achieved at the same rate. In addition, the Ministry has issued formal notice to all operators of their licensing obligations and is encouraging those operators to get started with their licensing process well in advance of the March 2026 deadline. According to authorities, this new policy is not aimed at stifling the growth of tourism; rather, it is an attempt to create a unified system for a rapidly growing sector of the economy. Tourism is one of the most rapidly growing sectors of the economy in recent years, especially in popular destinations such as Bali, Jakarta, Lombok, and parts of Java. Instead of simply banning tourism, the new policy uses three different methods to regulate and control short-term rentals or villa accommodation into the tourism economy. While some areas have considered limiting or banning the types of short-term rental platforms available in their region, the central government has indicated that it favours improving regulations rather than implementing an outright prohibition. The government believes that having a clear set of licensing requirements will allow better regulation of diverse types and will help provide a clear avenue for all types of accommodation to legally remain in operation in each region. Additionally, improved coordination between the national and local authorities is anticipated with this framework being implemented, which has been identified by tourism stakeholders as not having been consistent in the past. While the accommodation industry has largely applauded the clarification of standards and processes by which the accommodation industry will operate, the accommodation industry has stressed the need for non-consolidation of brands, classification and registration of villas, homestays and other accommodation types that are not hotels across regions. Concerns related to the administrative complexity and local interpretation of regulations have been expressed by some operators. Groups within the industry have requested that a simpler process, clearer time frames and better cooperation between government agencies be employed to assist with compliance in particular small, independent property owner jurisdictions.
The licensing regulatory framework is expected to have significant direct effects in the tourism and hotel market in Indonesia. Nationwide enforcement is anticipated to be completed by March 2026 and, therefore, listing of properties on OTA may be impacted through the withdrawal of unlicensed properties or the establishment of formal operating authorities; thus, altering or shaping Quoted Listings as well as Rental Agreements. According to the Government, the policy supports broader objectives such as increasing visitor safety, improving service quality, strengthening tax revenue and achieving fair competition in the hospitality industry. All hotel operators, developers and short-term rental providers will be keen to see how enforcement occurs, as changes in the supply of properties may lead to fluctuations in pricing, occupancy rate and revenue allocation. Separate observers point out that Indonesia’s actions are part of a growing global trend where many destinations globally will begin regulating short-term accommodation providers and all providers will be required to meet licensing requirements, safety standards and pay taxes to the respective country.
