The Regent opens after three-year delay<\/p>\n
By Rita A. Widiadana<\/p>\n
JAKARTA (JP): After a few years of delay, the Regent of
\nJakarta is finally ready to enter the fierce competition in the
\ncity's hotel business.<\/p>\n
\"It is really God's blessing that the hotel is finally
\nopening. Two years ago, we thought that this ceremony would never
\ntake place,\" noted Said Umar Husin at the hotel's opening last
\nweek.<\/p>\n
Said, president of PT Permadani Khatulistiwa Nusantara (PT
\nPKN), the owner of the new hotel, is confident that the
\nestablishment will provide customers with the best facilities and
\nservices.<\/p>\n
Construction of the Regent of Jakarta was turbulent. Started
\nin l988, the project was suspended for almost three years due to
\nfinancial problems of the owners.<\/p>\n
The hotel, managed by PT PKN (a subsidiary of Kongsi Delapan
\nor Kodel Business Group), was previously scheduled to start
\noperation in l991.<\/p>\n
Earlier reports said that the three-year postponement was
\ncaused primarily by increases in construction costs from an
\nearlier estimate of only US$150 million to $235.2 million (the
\nfinal total investment).<\/p>\n
A senior banker, quoted by the now defunct Tempo weekly, said
\nthat the Regent project was overpriced and not economically
\nfeasible. The banker maintained that costs in the project's
\noriginal proposal made by Kodel were marked up.<\/p>\n
In one instance, the company estimated the land price at
\n$1,000 per square meter, much higher than the normal prices of
\n$200 to $300 per square meter at the time the project was
\nproposed.<\/p>\n
\"Honestly, many state banks were quite suspicious that the
\nproposed loan would be used not only for the construction of the
\nhotel but also for financing the company's other projects,\" the
\nbanker maintained. As a result, many prospective partners and
\nbanks were not interested in the project, according to the
\nbanker.<\/p>\n
The cloud overshadowing the project was cleared when a bank
\nsyndicate consisting of Bank Dagang Negara (BDN), Bank Negara
\nIndonesia (BNI), Bank Bumi Daya (BBD) and Bank Duta agreed to
\nprovide loans to continue the project.<\/p>\n
\"The bank syndicate eventually agreed to provide loans because
\nthe project was still regarded as viable,\" explained Pala Neloe
\nof BDN during the Regent's soft opening. \"If we didn't support
\nit, the project would have become a white elephant.\"<\/p>\n
When construction was first halted the hotel's exterior had
\nalmost been finished.<\/p>\n
Investment<\/p>\n
The total investment of the 2.4 hectare hotel project reached
\n$235.2 million; $163.41 million of which was derived from loans,
\n$71.8 million from new equity capital and the remaining $26.4
\nmillion from Kodel Group's equity shares.<\/p>\n
The composition of the hotel's shareholders can be divided
\ninto three groups: The quartet -- Fahmi Idris, Soegeng Sarjadi,
\nSaid Umar Husin and Maher Algadrie -- which holds 43 percent; the
\nbank syndicate with 52 percent; and the Four Seasons-Regent Hotel
\nchain, which manages the hotel, with five percent.<\/p>\n
In addition to financial troubles, the project also
\nencountered a series of technical obstacles.<\/p>\n
Soegeng Sarjadi explained that the hotel designer, the San
\nFrancisco-based architectural firm of Skidmore, Owens and Merril,
\nhad set a very high standard for the hotel's design and
\nconstruction which included the use of imported materials such as
\nItalian marble and granite for both the interior and exterior.<\/p>\n
Paid off<\/p>\n
Nevertheless, the tireless efforts of PT PKN and its partners
\nhave apparently paid off.<\/p>\n
The lobby area, spacious and bright, looks onto a stately
\ncourtyard with towering royal palm trees. The Plaza Wing connects
\nthe lobby area with the Regent Wing, a five-story tower that
\nincludes the 3,000 square foot Regent suite.<\/p>\n
On the other side of the lobby is the Garden Wing which leads
\nto tennis courts, a swimming pool area and a health center by way
\nof a large open area called the Verandah.<\/p>\n
Upon entering the foyer of the lobby, four floor-to-ceiling
\npanels of natural teak, two on either side, have an immediate
\nvisual impact. These intricately carved panels represent the life
\nforces of fire, water, earth and air and are inspired by 15th
\ncentury limestone carvings discovered in a mosque in Jepara,
\nCentral Java.<\/p>\n
Michael Burchett, the General Manager of the Regent, insisted
\nthat the Regent of Jakarta has a distinct market segment--the
\ntraveling businessmen.<\/p>\n
\"We expect an occupancy rate of 68 to 70 percent within one
\nyear of opening,\" Burchett said confidently.<\/p>\n
However, the Regent may likely compete directly with the Grand
\nHyatt, Hilton and the Shangri-La Hotel.<\/p>\n
Peter A. Collins of the PT Collier Jardines said in the l995
\nedition of the company's Asia-Pacific Property Trends and The
\nJakarta Property Market that tight competition in the hotel
\nbusiness is expected to continue especially in the deluxe class.<\/p>\n
According to the review, the total supply of quality hotel
\nrooms in the greater Jakarta area is currently 12,300, 43 percent
\nof which belong to five-star rated hotels.<\/p>\n
Approximately 1,000 three-star, and 800 five-star rooms will
\ncome on line this year.<\/p>\n
Arman Rachman Iskandar, chairman of the Jakarta branch of the
\nIndonesian Hotel and Restaurant Association, noted that the
\nemergence of new hotels will increase competition.<\/p>\n
However, international hotel chains like the Regent, he said,
\nhave an advantage over others in that they are linked into
\nworldwide marketing networks.<\/p>\n
To face the competition, The Regent boasts the largest average
\nbedroom size in the city. Each of the 364 guest rooms and suites
\noffers a minimum of 55 square meters.<\/p>\n
Furthermore, each room has been designed to help traveling
\nexecutives attain the highest level of productivity by providing
\nnumerous amenities such as executive desks, telephones, personal
\ncomputers connections, IDD, in-room fax machines and other
\nbusiness equipment.<\/p>\n
The Regent will introduce Regent Private Reserve, a corporate
\ntravel program for companies which can commit a minimum of 60
\nnights per annum to The Regent.<\/p>\n
Participating companies will enjoy a number of benefits
\nincluding preferred corporate room rates, priority reservations,
\nexecutive suite upgrades and complimentary limousine services.<\/p>\n
The rates are set at $265 for the standard room and $2,000 or
\nmore for suite rooms throughout the soft opening.<\/p>",
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