Indonesian Hoteliers Push Back Against Mandatory Halal Certification Rules

The Indonesian hospitality sector is grappling with the challenges posed by the country’s newly implemented mandatory halal certification policy. Enforced by the Indonesia Halal Product Assurance Agency (BPJPH) under the Ministry of Religious Affairs, the regulation took effect on October 18 and applies to most medium and large businesses across the nation, including hotels.

While BPJPH chairman Haikal Hassan stressed the need for clear boundaries between halal and non-halal products to safeguard consumer trust, hoteliers argue that the new requirements are costly, burdensome, and potentially detrimental to the country’s growing tourism industry. With sanctions looming for non-compliance, hotel leaders are calling for a more practical approach that balances compliance with operational realities.

The Policy at a Glance

The halal certification policy requires businesses to certify three primary categories of products: food and beverages, raw food materials and additives, and slaughtered products. The regulation is designed to ensure transparency and consistency in halal practices, particularly in food preparation, which is central to Indonesia’s halal tourism strategy.

However, the broad scope of the mandate has left many businesses, particularly those in the hospitality sector, scrambling to adapt. BPJPH has launched a nationwide supervision initiative to ensure compliance, focusing on medium and large enterprises, including restaurants and hotels that identify as halal properties.

Industry Pushback

Representatives from the Indonesian Hotel General Managers Association (IHGMA) and the Indonesian Hotel & Restaurant Association (IHRA) have been vocal in their criticism of the policy. A recent meeting between these organizations and BPJPH highlighted numerous concerns, from cost implications to the practicality of certifying dynamic and ever-changing hotel menus.

Erick Erlangga, IHGMA’s head of legal affairs, clarified that hotels not explicitly marketing themselves as halal properties are exempt from the regulation. However, those identifying as halal-certified face additional scrutiny. Erick explained, “The regulation focuses on meat-cutting and processing procedures, which means certification is required not just for food products but also for suppliers.”

Hotels that have adopted a halal label to attract Muslim travelers are now finding themselves at a crossroads. While the label was initially seen as a value-add, the new derivative regulations may discourage hotels from maintaining their certification.

Cost Challenges

One of the most significant barriers to compliance is the cost of certification. According to IHRA Secretary General Maulana Yusran, the financial burden has increased dramatically. “Previously, certifying one restaurant cost between $314 and $627. Now, the cost has risen to between $1,883 and $4,393 per menu,” he said.

For hotels operating multiple restaurants or offering diverse menu items, the expenses quickly add up. A hotel with three restaurants, each offering 20 items, would require 60 separate certifications. This financial strain is compounded by the frequency with which menus are updated, making it nearly impossible for hotels to keep up with the certification process.

Maulana added, “Menu changes are common in the hospitality industry, especially to accommodate seasonal ingredients or trends. By the time the certificate is issued, the menu may already be outdated. Should we sell the same menu for years? This regulation stifles creativity and impacts sales in our F&B operations.”

Logistical Hurdles

Apart from the cost, the process of obtaining halal certification has become increasingly complicated. Hotels must now register with both the Food, Drug, and Cosmetics Assessment Institute of the Indonesian Ulema Council and BPJPH. Despite the system’s digitalization, applicants face a growing list of prerequisites and procedures.

IHRA Chairman Hariyadi Sukamdani expressed concern over the mounting complexities, warning that the regulation might drive many hotels to abandon their halal certification efforts altogether. “Although the process is digitalized, the layers of bureaucracy are daunting. Hotels that initially sought to add value with a halal label are now reconsidering due to these costs and challenges,” he explained.

Impact on Halal Tourism

Indonesia has positioned itself as a leading halal tourism destination, attracting Muslim travelers worldwide with its diverse offerings. However, the new certification policy threatens to undermine this progress.

Hotels that have heavily invested in marketing themselves as halal-friendly now face the risk of losing their competitive edge if they cannot afford the new certification requirements. Conversely, those who have not yet obtained a halal label may be discouraged from doing so, potentially limiting the country’s appeal to Muslim travelers.

Maulana emphasized the broader implications, stating, “This policy was supposed to enhance the halal tourism sector, but instead, it’s creating roadblocks. If hotels stop pursuing halal certification, the entire industry will suffer.”

Calls for Reform

Industry leaders are urging the government to revise the regulation to make it more practical and cost-effective. Suggestions include streamlining the certification process, reducing costs, and introducing exemptions or flexibility for dynamic operations like hotels.

Erick Erlangga suggested redefining which products and services require certification, focusing on suppliers and primary food ingredients rather than individual menu items. “We need clarity and balance. The current approach is unsustainable for businesses,” he said.

While the intent of the halal certification policy aligns with Indonesia’s goals of becoming a global leader in halal products and services, its implementation raises significant questions about feasibility and fairness. For many hoteliers, the current requirements feel like an overreach, threatening to stifle innovation and add unnecessary financial burdens.

As the hospitality sector awaits potential revisions, the stakes are high for Indonesia’s reputation as a halal tourism destination. Policymakers must strike a delicate balance between ensuring halal compliance and supporting the growth of one of the country’s most vital industries.

The new halal certification policy has sparked a critical conversation about the future of Indonesia’s hospitality and tourism sectors. While the government aims to strengthen halal standards, industry leaders caution that the current framework risks alienating businesses and stifling innovation. The coming months will be crucial as stakeholders work toward a solution that meets the needs of both the industry and consumers.