Occupancy rates remain high despite fall in new demand<\/p>\n
Sudibyo M. Wiradji, Contributor, Jakarta<\/p>\n
Although the Oct. Bali bombing severely hurt the country's
\nhotel industry, the occupancy at expensive apartments remains
\nrelatively high.<\/p>\n
The bombing attacks last year that had scared foreigners,
\neither investors or tourists, to come to Indonesia only affected
\nnew demand, apartment owners said.<\/p>\n
"Apartments are designed for long-term stay, and our existing
\noccupants will stay, provided that the situation does not
\nendanger them individually and the companies where they work are
\nnot closed down," said senior marketing executive Herlina of
\nExecutive Menteng Apartment.<\/p>\n
Due to their long-term lease contracts, the Bali tragedy has
\nnot made any significant changes in terms of occupation rates.
\n"At our apartment, occupants who have returned to their countries
\n(following the Bali incident) account for between one and two
\npercent," she said.<\/p>\n
The average length of stay in most apartments is between one
\nand two years, but unlike previous years, most clients prefer to
\npay on a one-year basis. "They will pay additional rental fees
\nonly when they have decided to extend their stay," she said.<\/p>\n
Although there has been a decline in new demand, most
\napartment owners in Jakarta have no plans to lower their leases.
\n"What we should do is maintain the quality of our services," said
\nHerlina.<\/p>\n
Executive Menteng Apartment, which has 240 apartment units,
\nexpects an occupation rate of between 98 percent and 99 percent
\nthis year. "Our minimum target is 97 percent," she said.<\/p>\n
Despite the declining number of foreigners in Indonesia, the
\nmanagement had no intention to shift the target market from
\nforeigners to locals as several hotels have done, she added.<\/p>\n
Apartemen Golf Pondok Indah's Tower Two, which opened only
\nthree months ago, has an occupation rate of 17 percent, partly
\ndue to the decline in new demand in the market.<\/p>\n
Unlike Tower Two, Tower One, which has been open for seven
\nyears, has an occupancy rate of about 85 percent.<\/p>\n
"Tower Two has only operated for few months. We hope that when
\nthe situation improves, our occupation rate will also improve,"
\nsaid assistant apartment manager James U. Moniaga of Apartemen
\nGolf Pondok Indah.<\/p>\n
"We try our best to maintain quality services and we even wish
\nto improve it," he added.<\/p>\n
Their minimum occupation rate target for 2003 is 70 percent of
\nthe 133 units in Tower Two. "In a bid to attract foreigners to
\nstay in Tower Two, we have kept the same rates," he explained.<\/p>\n
The lease at Apartemen Golf Pondok Indah, strategically
\nlocated in the elite Pondok Indah residential area, is relatively
\nhigh compared to similar apartments of the same class. "Quality
\nservice is our utmost priority," James said.<\/p>\n
Plaza Residence, located on Jl. Jend. Sudirman in Central
\nJakarta, managed to retain its occupancy rate of 100 percent
\ndespite the decline in the number of foreigners visiting
\nIndonesia.<\/p>\n
"The 100 percent occupancy rate has been maintained since two
\nyears ago," said associate marketing manager Ratu Neilla of Plaza
\nResidence, adding that the 75 percent of its tenants were
\nJapanese nationals.<\/p>\n
The Japanese know the high quality of Plaza Residence through
\nword-of-mouth, she said. "When bad things happen in Indonesia,
\nJapanese tend not to panic so easily," she said.<\/p>\n
As part of its strategy to attract foreigners, especially
\nJapanese, the management at Plaza Residence had been trying to
\nboost the degree of comfort and convenience offered by the
\napartment by completing necessary facilities, such as a shopping
\ngallery, a minimarket, a salon and a bar in the apartment
\ncomplex. "But, of course, we place quality as our top priority,"
\nRatu said.<\/p>\n
For Puri Casablanca Apartment, the drop in new demand from
\nforeigners has led to changes in the lease terms, from long-term
\nto short-term.<\/p>\n
Puri Casablanca, which is located in the central area of
\nKuningan, expects that its large apartment complexes, reasonable
\nprices, and good services would continue to lure foreigners to
\nstay.<\/p>\n
"Our serviced apartment is also famous for its cleanliness and
\nits vast garden. Puri Casablanca is quite popular among people
\nwith small families, as they can play with their children in our
\ngarden areas," noted general manager Hans Pola at Puri Casablanca
\nApartment.<\/p>\n
"We recently launched a program in which tenants could opt for
\na monthly payment scheme for our serviced apartments, in view of
\nthe current political and economic situation. The program is very
\neffective as our tenants' cash flow is more manageable and in
\nfact, most of them have extended their stay with us," he said.<\/p>\n
Puri Casablanca is comprised of four towers with 988 apartment
\nunits and an average occupancy rate of 70 percent. The occupancy
\nrate of its serviced apartment tower is at 85 percent.<\/p>\n
The apartment, which mainly targets Westerners, expects more
\nthan 250 foreigners to check in this year. "We are very
\noptimistic that we will achieve the target, as our occupancy rate
\nhas been increasing ever since we began operating the serviced
\napartment concept," said Hans.<\/p>\n
The Ascott Group Indonesia, which manages several apartment
\ncomplexes in the country, also saw an increase of between seven
\npercent and 20 percent in their occupancy rate last year.<\/p>\n
"Currently, the occupancy rate is at about 80 percent, with an
\naverage daily rate of US$75 for Jakarta properties," they said,
\nadding that the increase resulted from their brand awareness and
\nrecognition campaign.<\/p>\n
It is said that the possibility of a U.S. attack on Iraq, the
\nterrorist threat and Indonesia's general elections campaign to
\ncommence in 2003 are factors that might affect the apartment
\nbusiness outlook this year.<\/p>\n
When it comes to luxury apartments, Indonesian occupants
\naccount for a small percentage, with most preferring to buy the
\nunit instead.<\/p>\n
"Most Indonesians who stay in the apartment are young
\nprofessionals, because older and established executives usually
\nprefer to live in their own house," said Herlina.<\/p>\n
Practicality and comprehensive facilities are among the major
\nreasons why young Indonesian executives prefer staying in an
\napartment.<\/p>\n
At Puri Casablanca, the interest among Indonesians in living
\nat the apartment has grown over the past few years. As of now,
\nthe ratio of foreign versus local tenants is about 70 to 30. For
\nserviced apartments, the ratio stands at 90 to 10.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/occupancy-rates-remain-high-despite-fall-in-new-demand-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}