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)