Sun, 02 Mar 2003

Bali hotels focus on locals to stay afloat

Rita A.Widiadana, The Jakarta Post, Denpasar, Bali

Bali has been called the Island of the Gods, whose beauty and rich cultures has lured millions of people from around the world. But the Oct. 12 bombings shattered the heavenly picture of the island.

Even though the number of foreign tourists has started to increase, most foreign travelers are still fearful of visiting the island after the bombings, which killed over 200 people, mostly foreigners.

Hundreds of hotels, both star-rated and unrated, are suffering seriously. Bali's hotel business is now working extremely hard to lure visitors to the island. They have launched various incentives, strategies and creative promotional campaigns to bring back people to Bali.

In an interview with The Jakarta Post, hotel executives revealed how severe the impact of the bombings has been and how they need to be more creative to cope with the downturn in the number of foreign tourist arrivals.

Paul Czuba, sales and marketing director of the Ritz-Carlton Bali in Jimbaran, said the situation had forced the hotel to change its marketing strategy. But instead of cutting its rates, the Ritz-Carlton is adding more value to its holiday packages.

"We know that this is not a good situation for the hotel business in Bali. However, I am pretty confident that our market is still secure as long as we enhance our services and facilities," he said.

The Ritz-Carlton, he said, has just reopened its spa. "Our rates now are between US$120 and $125 but we offer a lot of additional facilities," Czuba said.

He also said that thanks to the strong brand name, Ritz- Carlton is surviving this critical moment. "Right after the bombing, we immediately launched extensive promotional activities with the support of our head office," he said. Along with the Casa Grande Group, the Ritz-Carlton has sponsored an international media campaign to enable journalists from around the world to visit Bali and to report on the real situation on the island.

The hotel is also promoting itself in several European countries, Japan and Korea.

Offering more facilities to hotel guests is also a strategy of the Padma Bali Hotel in Kuta.

Irwanto Tjokrowardojo, the hotel's sales and marketing director, explained that the hotel had recently refurbished its rooms and supporting facilities, including opening the Belarossa, a new Italian restaurant.

"Many people may think our investment excessive, especially during this low season. But it is a long-term investment that will bear fruit in coming years," Irwanto said.

With the opening of the new restaurant, for instance, the hotel expects passersby to enter the hotel from Kuta beach. A new business center has also been opened to make the hotel more business-friendly. "Our main market now also covers local businesspeople from Jakarta and Surabaya," he said.

Irwanto said that a lot of wealthy Indonesians would be willing to spend their holiday at the five-star hotel, whose room rates start at Rp 650,000 per night.

Well-known among young travelers, the Hard Rock Hotel in Kuta remains lucrative. Deddy Sasmita, the hotel's marketing and communication manager, said that the hotel was relying on the local and regional markets.

"We are focusing mainly on Indonesia, Singapore, Taiwan and Japan," Deddy said. In addition to group and individual guests, the Hard Rock Hotel also targets corporate meetings.

Around 20 percent of its current 42 percent occupancy rate is filled by corporate activities.

Amadeo Zarzosa, general manager of Bali Intercontinental in Jimbaran, said that the Bali bomb blasts had caused all tourism- related industry to really suffer economically.

"It is a very sad situation. However, we have to move forward despite various constraints," Zarzosa said.

His company, he said, has launched extensive campaigns in several overseas countries, including Australia. "We have just arrived from Australia where we met travel wholesalers in Adelaide to invite them back to Bali," he said.

Several airlines, including the new Air Paradise serving the Bali-Australia route and Garuda Indonesian airline, are working jointly with the hotel to offer special holiday packages.

The hotel's main markets are Japan, Germany and Australia. However, Zarzosa said, during this critical period, the hotel is vying to attract local visitors -- in this case people from Jakarta's business circle and affluent individuals.

"Honestly, we have been saved by the Jakarta market in the last two months, with a mounting number of corporate meetings as well as individuals," he said.

Ian E. McKie, general manager of Bali Hilton in Nusa Dua, said that all hotels in Bali, particularly five-star hotels, needed to adopt different and smart strategies.

"Focusing on domestic and regional markets seems to be the wisest choice for us here in Bali," said McKie.

Currently, the situation is quite distressing for the hotel industry in Bali and elsewhere in the country. The impact of the Oct.12 bombing has had a tremendous effect on Bali's tourist industry. The imposition of travel advisories by a number of countries including Australia, Japan and the United States against visiting Indonesia and Bali have worsened the situation.

"Previously, we predicted that these travel advisories would only be effective between three and four months, hoping that Bali would be safe again. But, such a prediction was proven incorrect," admitted McKie.

To anticipate this condition, he said, many hotels, including Bali Hilton, have had to lower their business expectations, at least until the end of 2003, and hope that business will grow again in 2004. Under normal conditions, he said, Bali Hilton could expect occupancy rates of between 70 percent and 75 percent of the hotel's 537 rooms.

"We would be satisfied if we could reach around 50 percent average occupancy rates by the end of 2003," he said. In order to lure guests, the hotel has also cut its usual room rates from US$120 down to only $50. Its rupiah package was set at Rp 650,000.

He expected that the 50 percent occupancy rate would be filled by the domestic and the regional market. "Of course, both markets could not replace the international market Bali used to have before October 2002," he said. The local and regional markets, he added, aren't big enough.