Bogor. Bogor Mayor Dedie Rachim has expressed deep concern over the recent closure of two hotels in the city, attributing the downturn to declining bookings and the impact of the central government's budget efficiency policy.

The Sahira Butik Hotel Paledang and Sahira Butik Hotel Pakuan -- both under the Sahira Hotels Group -- ceased operations on March 29, with no announced plans to reopen. The closures highlight the increasing strain on the hospitality industry, which has been heavily reliant on bookings from government agencies.

“The economic situation is not in good shape, and it’s starting to take a toll. Two hotels in Bogor have shut down, and two more are likely to follow soon,” Dedie said.

Hotels in Bogor, particularly those catering to Meetings, Incentives, Conferences, and Exhibitions (MICE), have been severely affected by President Prabowo Subianto’s cost-cutting directive. The policy restricts non-essential government travel, seminars, and meetings -- activities that typically account for about 40 percent of hotel revenue, according to the Indonesian Hotel and Restaurant Association (PHRI).

Out of approximately 120 hotels in Bogor, nearly all are experiencing low occupancy rates. The hardest hit are those that primarily operate on weekdays and depend on government-related MICE events.

“Hotels that rely on weekday operations are now seeing a significant drop in revenue due to the sharp decline in government-organized events,” Dedie explained.

He urged the central government to reconsider the budget efficiency policy, stressing that the closures in Bogor reflect a broader threat to the hospitality sector in many regions.

“I hope this message reaches the President. The impact of budget cuts and intensifying price competition is being felt deeply, especially in Bogor, which is in close proximity to Jakarta,” he added.

To cushion the blow, the Bogor City Government is weighing several relief measures for struggling hotels, including deferred payment obligations and the waiving of penalties.

Meanwhile, Yuno Abeta Lahay, Chairman of PHRI’s Bogor Chapter, reported a steep decline in occupancy rates from January through mid-April. March marked the lowest point, with rates plummeting to just 28.9 percent.

“The Eid holiday season offered a brief lift between March 31 and April 6, but occupancy fell again to below 50 percent shortly after,” Yuno said.

He confirmed that two out of the three properties operated by Sahira Hotels have officially shut down, and two other major hotels in Bogor are expected to cease operations by the end of the month.

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