More than 50 luxury hotels are set to open in Jakarta and Bangkok within the next five years, highlighting expectations of a strong economic recovery in two of Southeast Asia’s largest cities as Covid-19 travel restrictions are eased.

Hyatt Hotels of the US debuted a property under its flagship luxury brand in central Jakarta near the Indonesian president’s official residence on July 8. Park Hyatt Jakarta opened on the grounds of the headquarters of MNC Group through a partnership with the local media giant.

The hotel occupies the top 17 floors of the 37-story building. Key cabinet ministers’ attendance at the opening ceremony underscored how the government pushed for the hotel’s launch, including a relaxing of building height rules. Billed as the nation’s first six-star hotel, it features a high-end Japanese restaurant on the top two floors.

MNC invested roughly 3 trillion rupiah (US$202 million) and expects to recoup the amount in around seven or eight years.

A study by Nikkei found that 13 four-star and higher-ranked hotels are scheduled to open in Jakarta from 2021 to 2026. Japan’s Hotel Okura plans to debut a five-star hotel in the city’s central business district in 2025, while Hong Kong-based Langham Hotels & Resorts has opened its first Indonesian property.

Bangkok is anticipating a more rapid pace of high-end hotel openings. According to Germany’s Tophotelnews, 28 four-star and 13 five-star hotels will launch in the Thai capital from 2021 to 2024.

US hotel company Marriott International will open a Bangkok property under its flagship Ritz-Carlton brand in 2023. To be located inside the soon-to-open One Bangkok commercial complex, the hotel is one of the most anticipated openings in the city.

Standard Hotels of the US launched its second Thai property in Bangkok this July, following its debut in the southern resort destination of Hua Hin in late 2021.

Jakarta and Bangkok have drawn luxury hotels as expectations rise for an economic recovery. Both Indonesia and Thailand swung from negative to positive real gross domestic product growth in 2021 and are projected to log growth of 4% or more in 2023 and after.

Hotel operators are focusing on demand for business travel. Business guests staying at their companies’ expense are able to pay more than tourists, and they seek higher-ranked hotels for the peace of mind that they offer, an MNC official said.

The hospitality industry sees both Jakarta and Bangkok as promising for “MICE”: meetings, incentive travel, conferences and exhibitions. International conferences and exhibitions have a large economic effect, since tourists spend money before and after the events.

Indonesia and Thailand are both members of the Association of Southeast Asian Nations and the Asia-Pacific Economic Cooperation forum, which hold meetings year-round.

Indonesia is Southeast Asia’s sole member of the Group of 20 nations and serves as the group’s chair this year. Meanwhile, Thailand has its own visitor magnet – the region’s biggest auto show, held annually in Bangkok.

Jakarta and Bangkok also compete in luring companies to set up locations by offering tax breaks and other incentives. The two cities are roughly even economically – Jakarta had a population of about 10 million and real GDP of US$120 billion in 2021, while Bangkok had a population of roughly 9 million and real GDP of US$100 billion in 2020 – so how they can differentiate themselves will be the key.

Indonesian president Joko Widodo is aggressively courting businesses related to artificial intelligence and the Internet of Things. Laws were revised in November 2020 to pave the way for an easing of labour regulations, stimulating investment by foreign companies. The government plans to relocate the capital, but Jakarta is still positioned as the economic centre.

Thai prime minister Prayuth Chan-ocha’s government has introduced a flurry of measures aimed at attracting companies in such fields as digital, biotechnology and medicine.

Bangkok has an edge in attractiveness as a city. Bangkok was 35th place, against Jakarta’s 45th, in a comprehensive ranking of 48 key cities by the Mori Memorial Foundation’s Institute for Urban Strategies. Jakarta scored the lowest in the culture category, so it faces a need for improvement in that area.