ASTON Int'l sees chance to expand in Indonesia
ASTON Int'l sees chance to expand in Indonesia
By Devi M. Asmarani
JAKARTA (JP): The Honolulu-based ASTON International hotel
chain, a newcomer to Indonesia, sees wide opportunities to expand
its operations in the country despite the current downturn in
tourism.
The company's president and chief executive officer, Charles
E. Brookfield, said the crisis had made Indonesia a more
attractive place to expand into.
"The market has potential and there's good room for dramatic
improvement," Brookfield said in an interview with The Jakarta
Post on Friday.
A new affiliate of ASTON Hotels and Resorts, a 50-year old
Hawaiian hotel chain, ASTON International entered Indonesia last
year.
It has had two operations in the country since the beginning
of this year -- Lippo Sudirman Grand Suite in Jakarta, which
consists of five-star serviced apartments, and the five-star
ASTON Resort and Spa in Bali.
Two other properties -- a five-star serviced apartment complex
in Surabaya, East Java, and a boutique hotel in Bali -- are
expected to open before the year ends.
Brookfield said the company had an ambitious target of
obtaining three properties in a year and 30 over 10 years before
the monetary crisis hit Indonesia last year.
But even after the crisis damaged the economy and led to
political unrest which caused a downturn in tourism, Brookfield
said ASTON did not abandon its ambitions in the country.
"Back then, I expected most of them (the new hotels) to come
out of new properties, but with the collapse, that's no longer
realistic," he said.
But Brookfield said he believed opportunities now existed for
the hotel chain to sell its product and services to local hotel
owners who are disappointed by the low returns generated by their
current management teams. He said hotel owners may now entertain
the idea of bringing in a new operator to boost profits.
In some cases, hotel owners might be unable to finance the
operations of their hotels and in this case, he said, ASTON would
be able to both manage and finance daily operations.
"We can come in as an operator and say we'll fund the sales
and marketing for your hotel for the next year with our money,"
he said.
He said his company could also give certain incentives to
hotel owners, such as charging no reservation or royalty fees for
the first two years to cut operating costs faced by hotel owners.
But Brookfield said he would not rule out the possibility of
acquiring hotels which are still in operation and whose owners
could no longer afford to keep them running.
"We will target certain areas and if we can get a good buy, we
may go in and buy all the stake or part of the hotel, " he said,
adding that several property owners had recently put hotels on
the market.
"The tip of the iceberg is starting to be seen now. There are
a lot of deals being negotiated," he said.
The company would look for independent hotels that have not
yet been awarded stars but which have the potential to be rated,
he said.
Wide range
ASTON currently owns about 40 hotels throughout the Asia
Pacific region. Thirty of the properties are located on the four
islands of Hawaii.
The hotels cater to a variety of segments in the market and
range from 5-star serviced apartments and boutique and resort
hotels, to three-star budget and condominium hotels.
The wide variety of choice it can offer enables the chain to
attract customers from a number of different classes.
"When you're selling or marketing a hotel, you have to study
the distribution channels," Brookfield said.
"In places like Bali, for example, the distribution channels
are dominated by tour operators, which are wedded to the
airlines," he said.
What the tour operators want are many choices to meet the
needs of a diverse array of customers.
"What we do is to give all the inventory they need, different
levels, prices -- more choices than companies with less property
are able to," he said.
This is the strategy ASTON plan to pursue in Indonesia, he
said, adding that in the future he hoped to have 50 properties
throughout the country.
He stressed the importance of flexibility in the company's
sales pitch, pointing to the Lippo Sudirman Grand Suite serviced
apartments as a example. He claimed the complex, which has 300
units, was not typical of serviced apartments, saying the company
preferred to call in an "all-suite hotel".
"People's perception of serviced apartments is that you have
to sign a one-year lease, but an all-suite hotel caters to short-
staying as well as long-staying guests," he said.
He admitted that the company does tend to cater to the upper
end of the market.
"The reality is that it's always better to have superior
products in a superior location, because then you can compromise
your prices and gain a larger share of the market," he added.