Battered hotel industry faces added insults<\/p>\n
JAKARTA (JP): The outlook for the country's battered hotel
\nindustry may become even bleaker in the months ahead, as fears of
\nescalating social unrest before and after the June elections will
\nfurther discourage foreign tourists from visiting Indonesia, a
\ntourism executive has said.<\/p>\n
Chairman of the Indonesian Hotels and Restaurants Association
\nPontjo Sutowo said the estimated decrease in tourist arrivals
\nwould continue to drag down the already weak hotel industry.<\/p>\n
He estimated that the average occupancy rate of star-rated
\nhotels might further plunge to below 30 percent, except for
\nhotels in Bali, where the rate is expected to remain high, at
\nover 60 percent.<\/p>\n
\"Three months into this year, there have been no signs of
\nrecovery in the hotel industry. Business may even worsen in the
\nmonths ahead over fears of social disturbances around the general
\nelection,\" he said.<\/p>\n
He added that occupancy rates in most hotels in the country's
\nmain tourism destinations, including Yogyakarta, Ujungpandang in
\nSouth Sulawesi and Medan in North Sumatra, have also plunged to
\nbelow 30 percent.<\/p>\n
Pontjo said the average occupancy rate of star-rated hotels in
\nthe capital in the first three months of this year ranged between
\n20 percent and 30 percent, down from an average monthly level of
\n30 percent to 40 percent in the same period of last year.<\/p>\n
The average monthly occupancy rate was 75 percent before the
\neconomic crisis hit the country in July, 1997, he said.<\/p>\n
Pontjo said that last year local hotels had been forced to
\nreduce their room rates by about 80 percent to attract guests
\namid the lower demand for hotel rooms and increasing upkeep
\ncosts.<\/p>\n
Room rates this year are expected to be 50 percent lower than
\nin 1998, he said. He warned, however, that a further rate cut
\nwould incite a price war among star-rated hotels.<\/p>\n
Pontjo said the association's members had tried hard not to
\nlay off workers despite the low occupancy rates, but if the
\nsituation continued layoffs could not be avoided.<\/p>\n
\"It's going to be hard not to cut workers in the current
\nsituation\", said Pontjo, who owns the Jakarta Hilton
\nInternational hotel.<\/p>\n
Some star-rated hotels in Jakarta have suffered losses during
\nthe past few months, and if the cash-flow problems continue, the
\nhotels will not have much choice but to cut back their staff in
\norder to survive.<\/p>\n
The decreasing number of tourist arrivals is a major
\ncontributing factor to the industry's lack of income.<\/p>\n
The downturn in tourism began in 1997 following a series of
\nnatural disasters, such as the notorious forest fires that hit
\nKalimantan.<\/p>\n
Last year, the tourism industry suffered an even lower slump
\nfollowing the massive riots in May when hundreds of properties,
\nmostly department stores and retail outlets, were burned down or
\nlooted. Hundreds of people were also killed during the tragedy,
\nwhich led to the resignation of president Soeharto after 32 years
\nin power.<\/p>\n
Many countries warned their citizens not to visit Indonesia
\nafter the incident, dealing another big blow to the country's
\ntourism sector.<\/p>\n
The prolonged economic crisis and a series of social upheavals
\nacross the country caused foreign tourist arrivals to drop by 20
\npercent to about 3.8 million visitors last year, down from 5.04
\nmillion visitors in 1997. The number was far below the
\ngovernment's initial target of 4.8 million foreign tourist
\narrivals.<\/p>\n
Foreign tourist arrivals are expected to decrease further this
\nyear because of fears of social instability around the June
\ngeneral election and the Special Session of the People's
\nConsultative Assembly.<\/p>\n
\"People are afraid to come to Indonesia now, and many airlines
\nhave reduced their flight frequencies to the country,\" Pontjo
\nsaid.<\/p>\n
Cutting prices, he said, is no longer an effective measure to
\nattract guests, because local hotel room rates are already very
\ncompetitive because of the weaker rupiah against the U.S. dollar.<\/p>\n
\"No one can beat the prices of our hotels. But foreigners are
\nstill hesitant to visit Indonesia because they fear security
\nhere.<\/p>\n
\"Right now all we have to do is convince them that it is safe
\nand secure to visit here,\" he said.<\/p>\n
The head of the Jakarta Chapter of the Indonesian Tour and
\nTravel Association, Meity Robot, said separately that many
\nforeign tour groups have canceled their visits here.<\/p>\n
\"The cancellations are expected to continue for scheduled
\ntours ahead of the general election,\" she said. (gis)<\/p>",
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