FOCUS ISSUE --- Hotels

FOCUS ISSUE --- Hotels

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.