Accor upbeat on RI hotel industry

Accor upbeat on RI hotel industry

By Sylvia Gratia M. Nirang

JAKARTA (JP): International hotel chain Accor Asia-Pacific
expects a quick turnaround in the country's ailing hotel industry
despite uncertainties in the political field and reports of
continuing social upheaval in some parts of the country.

Accor's newly appointed director of operations for Indonesia
and Malaysia Oswald Pichler told The Jakarta Post over the
weekend that he believed the average hotel occupancy figures
would start to pick up again early next year, and then return to
precrisis level in the year 2001.

"People may be a little bit cautious about the situation in
Indonesia now. But if everything goes well in November, people
will come back to visit Indonesia in the beginning of the next
millennium," he said in reference to the presidential election in
November.

"I expect that we will see signs of recovery next year, and
within 18 months down the road, Indonesia will be back in full
swing again."

Megawati Soekarnoputri's Indonesian Democratic Party of
Struggle (PDI Perjuangan) won the June 7 elections with 34.7
percent of the vote, but she does not have enough votes to win
the presidential election in November. Many contend that
President B.J. Habibie, Megawati's main rival in the presidential
race, is determined to remain in power.

Some political analysts, however, warned that the election of
Habibie would not only worsen the conflicts among the political
elite but could also fuel more social upheavals.

Pichler said some of the hotel chain's projects which were put
on hold before the crisis would restart again in the new
millennium.

Pichler said most of the Accor hotels recorded good occupancy
figures during 1998 and in the first eight months of 1999 in
comparison with competitors.

"The average monthly occupancy rate of our hotels reached 40
percent last year. The occupancy rate in June this year was very
low, but in July and August it was extremely good. The rate stood
at about 50 percent and is still showing signs of encouragement,"
he said.

He added that the occupancy rates would likely decrease in
November when the presidential election would be held and in
December during the fasting month of Ramadan.

"We expect occupancy rates between 45 percent and 50 percent
in the coming months. We expect about 55 percent occupancy
figures next year as inbound tourists to Indonesia are expected
to grow," he said.

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

The company currently operates throughout Indonesia with 24
star-rated hotels, which have a total of 4,053 rooms, and five
apartment buildings offering 476 apartments. Thirteen properties
operate as Novotel, eight properties as Ibis and five as 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.

Expansion

Pichler said Accor was aggressively seeking opportunities to
expand operations in Indonesia at a time when many other tourist
ventures were wilting in the heat of the economic meltdown and
political tension.

He said Accor had 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 the improved condition and the bright prospect of the
future that persuaded the owners to resume construction," he
said.

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

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

However, he refused to give any more details on the new
property in Jakarta, but said it would start operating by early
next year.

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

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

"With the fall in the rupiah to the U.S. dollar, it was clear
that in the leisure and business sectors, Indonesian travelers
would be concentrating more on domestic travel, so we launched an
extensive local campaign for our various hotels," he said.

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

Pichler said Accor had also put a priority on maintaining its
existing hotel network in Indonesia despite the country's
difficult circumstances.

"We are constantly making sure that we maintain our network as
well as expand it. Some international hotel chains do not
maintain their network here. We haven't lost anything even in the
most difficult of circumstances.

"We entered the crisis (era) with 29 properties and we have
survived with 29 properties in our hands. It is because we are
committed to this country. We are here not only in the good times
but also in the bad."

Pichler said that in the future Accor would continue expanding
its business in Indonesia, and underscored his company's
confidence about the hotel industry here.

"We see great opportunities here. Indonesians are very nice,
so full of hospitality. And it is one of the main keys for
success in the hotel business," he said.

"With over 200 million people and great resources, it's crazy
not to invest here," 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.