Accor to manage two more hotels in Indonesia

Accor to manage two more hotels in Indonesia

JAKARTA (JP): International hotel chain Accor Asia-Pacific
said over the weekend that it would manage two new properties in
Indonesia this year.

Accor's Regional Vice President for Operations in Asia Marc A.
Steinmeyer told The Jakarta Post that Accor has signed contracts
to manage the 136-room Hotel Ibis Pekanbaru in Riau and a new
hotel in Jakarta.

He said that both hotel projects were originally planned prior
to the economic crisis, and initial planning and preparation had
already taken place.

"It is improved conditions over the past six months, and the
bright prospect of the future, that persuaded the owners to
resume construction," he said.

He said the three-star Ibis Pekanbaru had excellent prospects
given its location in the eastern Sumatra region, which is rich
in oil, gas and mineral resources.

"The increasing inflow of foreign investment in the region has
established a clear need for international-standard
accommodation. And we will be there to fulfill the need. The Ibis
Pekanbaru will be opened in early 2000," he said.

However, he refused to give more details on the new property
in Jakarta, saying that it would start operating by the end of
this year.

Accor, partly owned by Paris-based hotel management giant
Accor SA, operates hotels under several names, including Sofitel,
Novotel, Mercure and Ibis.

Accor's Product and Marketing Services Manager for Indonesia
and Malaysia Fabrice Burtin said Accor initially expected to
manage at least 10 properties this year. Some of the hotels are
under construction.

However, owners have postponed the construction of some of the
properties due to financial difficulties, he said.

Burtin said Accor understood the financial hardships being
faced by hotel owners in the country and to some extent it agreed
not to cut management contracts with existing hotels as some of
them could not pay their fees to Accor due to financial
difficulties.

"We entered the crisis (era) with 29 properties and we have
survived the crisis with 29 properties in our hands. It is
because we are committed to our contracts. We understand the
difficulties faced by the owners and we are open for negotiations
to reach win-win solutions," he said.

The company currently operates, throughout Indonesia, 24 star-
rated hotels with a total of 4,053 rooms and five apartment
buildings with 476 apartments. Thirteen of the properties use
Novotel as their name, eight properties are under the Ibis banner
and five under Mercure. The hotel chain also operates three
associate hotels under other names.

The company's first hotel in Indonesia was the Ibis Kemayoran
which opened in 1994.

The new Ibis Pekanbaru is the first Ibis hotel in Sumatra and
the ninth Ibis in Indonesia.

Burtin said most of Accor's hotels recorded good occupancy
figures during 1998 and in the first months of 1999, compared to
competitors.

"The average monthly occupancy rate of our hotels reached 40
percent last year, and increased to about 46 percent from January
to April this year.

"It declined slightly in May ahead of the general election but
improved again to about 46 percent and 49 percent this month,
following a more stable economic and political condition.

Steinmeyer said the good occupancy figures were achieved
because of the company's move to realign its marketing strategy
toward the domestic market.

"With the fall in the rupiah's value against the U.S dollar,
it was clear that in both the leisure and business sectors,
Indonesian travelers would be concentrating more on traveling
within Indonesia, so we launched extensive local campaigns for
our major hotels," he said.

He said that the increase occupancy figures have been attained
with Accor's hotels maintaining the same rates structure
implemented in 1998.

"We recognized that to drop the rates would have involved a
drop in the quality of services, which we considered
unacceptable," he said.

He added that Accor has also benefited from its policy of
charging in rupiah rather than dollars.

Burtin said Accor expected the occupancy figures of its hotels
to reach about 60 percent this year as inbound tourists to
Indonesia have grown in the past months, especially to resort
areas such as Bali and Lombok.

"We are confident that business areas will also see increases
in international visitors as the country's economy and political
condition continues to stabilize," he said.

Besides Accor, leading overseas hotel management chains in
Indonesia include Sheraton, which manages about 3,500 rooms, and
Hyatt and Shangri-La with about 2,500 rooms each. (gis)