Occupancy Plummets, Four Budget Hotels in Mataram Convert to Boarding Houses
A number of budget hotels in Cakranegara, Mataram City, West Nusa Tenggara (NTB), have begun converting their functions into boarding houses (kos-kosan) due to declining occupancy levels. The Mataram City Regional Financial Agency (BKD) has recorded that four hotels have applied for this change in business function.
Achmad Amrin, Head of Service at the Matram City BKD, stated that the transition from hotels to boarding houses is occurring because guest visit rates have decreased. “Our hotels rely on MICE (Meetings, Incentives, Conferences, and Exhibitions) events, so we are not a primary tourist destination. Occupancy in Mataram comes purely from hotel guests attending government events,” Amrin said during an interview on Tuesday (15/09/2026).
According to Amrin, this condition is also influenced by government budget efficiency policies that have impacted official business travel. Since 2025, the central government has implemented expenditure efficiency through Presidential Instruction (Inpres) Number 1 of 2025 regarding Expenditure Efficiency in the Implementation of the State Budget (APBN) and Regional Budget (APBD) for the 2025 Fiscal Year.
As a result of this efficiency, domestic official travel expenses have been cut by up to 50 per cent, while overseas official travel has been even more heavily suppressed. This budget efficiency has directly impacted hotel occupancy rates in Mataram. Consequently, several hotel entrepreneurs are facing operational cost pressures and are choosing to repurpose their hotels into boarding houses.
Amrin noted that changing a hotel’s status to a boarding house must follow specific procedures, as business licensing is directly linked to taxation regulations, involving both regional and central taxes. “Under the law, if a boarding house operates with daily payments similar to a hotel, it is also subject to tax,” he explained.
Meanwhile, if the boarding house operates on a monthly payment basis, entrepreneurs will not be subject to the same taxes as hotels, though they are not exempt from all tax obligations. “They will still be directed towards central taxes, such as Income Tax (PPh) and Value Added Tax (PPN),” Amrin added.
Based on data from the Mataram City BKD, four budget hotels have applied for closure or a change in business function. Three budget hotels have reportedly removed their taxpayer data following field inspections, while one other hotel has recently submitted an application and is currently undergoing further evaluation and inspection by officials.