Minister of Home Affairs Allow MICE activities at the hotel, PHRI DIY Urges the Budget of the Regional Government Budget

KABARJAWA – Sinar Harapan began to infiltrate behind the gloomy shadow of the hospitality industry. Minister of Home Affairs Tito Karnavian finally gave the blessing for local governments to re -organize activities in hotels and restaurants.

This decision sparked optimism among MICE industry players (Meeting, Incentive, Convention, Exhibition), including in the Special Region of Yogyakarta (DIY), which had been shaken by budget restrictions.

Minister of Home Affairs Tito Karnavian delivered this statement directly while attending the West Nusa Tenggara Provincial Government Musrenbang in Mataram, Saturday, June 7, 2025. He stressed that President Prabowo had approved this policy.

“The area may carry out activities in hotels and restaurants. I guarantee because I have spoken directly with President Prabowo,” Tito said in a firm tone, as quoted by Antara.

Tito highlighted the importance of maintaining the survival of the hotel and restaurant sector that depended its operations on the MICE agenda. He considered the activity to support the food supply chain and opened many jobs.

“That is impossible, but never did it. Continue to do hotels and restaurants. The right hotel and restaurant will collapse enough, doing activities there so they can live,” he said.

Occupancy is still low, expectations in the eastern easing

DPD Chairman PHRI DIY, Deddy Eryono, welcomed the Minister of Home Affairs’ move. He considered this policy could be a turning point in the rise of the hospitality and restaurant industry in DIY.

However, he also voiced one important question that still hung in the minds of business actors: Has the local government budget completely loosened?

“Yes, we welcome the Minister of Home Affairs direction. We hope that the local government can implement it. But our question is, is the Regional Government also relaxed by the central government?” Deddy said to the media, Saturday, June 8, 2025.

He added that so far a number of agencies began to make reservations at the hotel. However, the amount is still very small and has not yet had a significant impact on occupancy.

“Indeed, at this time there are those who have made a reservation at the hotel, but it is very small. If the prohibition is revoked, the budget to the Regional Government should also be loosened, so that it can be spent on hotels and restaurants,” he said.

Based on the latest PHRI DIY data, the hotel occupancy rate in Yogyakarta during the first semester of 2025 has not yet shown significant recovery. The average monthly occupancy still ranges from 30-35 percent, far below the health threshold of the industry which ideally reaches 60 percent.

Star hotels can only rely on individual guests and weekend tourists, which are fluctuating and inconsistent. Meanwhile, MICE activities that should be the main backbone are still stagnant due to regional spending restrictions.

Business actors hope that the easing of the Minister of Home Affairs is truly followed by fiscal policies that are in line. Without a budget easing, hotels and restaurants will still have difficulty breathing even though the rules have been loosened.

With the permission of activities at hotels and restaurants re-opened, industry players hope that the local government will soon hold meetings, training, and various other activities at local hotels. This step will restore the cash flow, revive the workforce that had been laid off, and revive the local supply chain that had been sleeping.

PHRI DIY asserted, his party was ready to welcome activities from the local government with the best facilities and services. They also hope that positive signals from the central government can be immediately translated in the form of concrete policies in the regions.

“Don’t let the signal from the center stop at the bureaucratic table. Our industry has been waiting too long, now is the time to act,” concluded Deddy.