Bali's hotel industry sees promising future

Bali's hotel industry sees promising future

JAKARTA (JP): The hotel industry in Bali is looking at a
brighter future despite turmoil in other parts of the country,
property consultant PricewaterhouseCoopers (PwC) says.

"Providing there are no further security issues in the
neighboring islands or in Bali itself, it is anticipated that
hotel performance in Bali will continue to strengthen into 2001,"
it says in its first quarter report.

However, this improvement can only be enhanced by increased
political, social and economic stability throughout the country,
it adds.

Proven to be the most resilient during the heat of the
economic crisis in 1998, occupancy rates of hotels in Bali
continued to grow with an increase of between 6 percent and 16
percent during the first three months of this year compared to
the same period last year.

Occupancy is now averaging 51 percent for boutique hotels, 64
percent for five-star hotels and 60 percent for four-star hotels,
the report says. However, three-star hotels suffered a decrease
of 13 percent to a 45 percent occupancy rate compared to the rate
last year, it adds.

"(The numbers) show an improvement in the Bali hotel market in
terms of numbers of guests since the same time last year," PwC
says.

Strengthening of the hotel market was also demonstrated by a
significant first quarter increase in daily rupiah room rates of
between 8 percent to 43 percent to Rp 2.45 million for boutique
hotels, Rp 660,000 for five-star hotels, Rp 373,000 for four-star
hotels and Rp 242,000 for three-star hotels.

In U.S. dollar terms, the rates also generally increased by 6
percent although boutique and three-star hotels experienced an 18
percent and 8 percent decline respectively compared to the same
period last year due to the depreciation of the rupiah against
the U.S. dollar, PwC said.

Between January and March, room rates in dollar terms were
$253 for boutique hotels, $68 for five-star hotels, $38 for four-
star hotels and $25 for three-star hotels.

Although building specifications of boutique hotels are
generally similar to five-star hotels, they provide more
exclusive services and charge higher rates, the report said.

Revenue per available room (RevPar) between January and March
this year increased by 15 percent and 20 percent for five-star
and four-star hotels, while boutique and three-star hotels
experienced a decrease of 14 percent and 20 percent in U.S.
dollar terms, it said, adding that RevPar is the best indicator
of hotel performance.

RevPar for boutique hotels is $128 (Rp 1.24 million), $43 (Rp
421,000) for five-star hotels, $23 (Rp 225,000) for four-star
hotels and $11 (Rp 109,000) for three-star hotels.

The company said that compared to the end of last year, the
RevPar was in fact lower this first quarter, but that it was
normal as the industry shifted from high-season at the end of
last year, to low-season at the beginning of the year.

The high number of foreign visitors coming in through Ngurah
Rai International Airport recorded by the Central Bureau of
Statistics (BPS) supports the optimism for the hotel industry on
the island.

Foreign arrivals at Ngurah Rai International Airport increased
4.91 percent to 212,246 between January and February this year
compared to the same period last year, the bureau said in its
monthly report.

However, compared to January the number of visitors decreased
by 10.12 percent to 100,468 from 111,778, it added.

Foreign arrivals through Ngurah Rai comprise about 35 percent
of all foreign arrivals through the 13 main points of entry to
Indonesia last year.

The 13 main points of entry to Indonesia are airports in
Jakarta, Bali, North Sumatra, West Sumatra, East Java, Central
Java, West Nusa Tenggara, North Sulawesi and South Sulawesi; sea
ports in Batam, Jakarta and Riau; and the land-border crossing in
Entikong, West Kalimantan.

Between January and February, the bureau recorded tourist
arrivals to reach 624,581 through the 13 points of entry, a
slight increase of only 0.52 percent compared to the 621,358
entering Indonesia during the same period last year.

And compared to January 2001, February's number of arrivals
decreased by 10.79 percent to 294,487, BPS said in its report.

Besides the factor of the low-season for tourism which usually
occurs at the beginning of the year, the decreasing number of
tourist arrivals during January and February was also caused by
security threats as demonstrations and riots continued in several
parts of the country, it said. (tnt)