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.