The tourism sector in East Java has increased slightly year by year. According to the annual data from Surabaya Tourism Department, the amount of the foreign tourists that visit Surabaya -the capital city of East Java- has increased more than the department’s target. The growth reach almost twice in 2014 or 189% higher than the amount in 2008. The result of the elevating amount of the tourists has a direct effect on the hotel industry in Surabaya.
As the second largest city in Indonesia, Surabaya has important position as a transport hub for the domestic and international tourists. The strategic location that located along the Java coast and its position as the center of business and economy in East Java also one of the main factor that help the hotel industry elevate greatly. Beside the huge amount of corporations and fast economy development, Surabaya is also a city with easy accessibility for the local and international tourists that want to visit popular tourism spots in East Java such as Malang, Batu or Mount Bromo.
Both of the factors are the key of the hotel growth in Surabaya. Based by the research of HVS Singapore, the acceleration of the city economy growth will stimulate the appearance of new hotel in Surabaya. The hotel development opportunities is dominated by budget and midscale hotel level to accomodate the individual business traveler or leisure. The research from Colliers International in 2014 shows the sum up of all hotels in Surabaya which is the 3 stars hotel in Surabaya has the biggest portion with 53%, outnumbered the 4 stars hotel (29%) and 5 starts hotel (18%). Despite the various numbers of luxurious hotel brand, the opportunities for the budget hotels will hold the better position since the market grows marginally.