Borobudur Hotel plans $63m renovation

Borobudur Hotel plans $63m renovation

JAKARTA (JP): PT Jakarta International Hotels & Development
(JIHD) will allocate US$63 million for the renovation of its
five-star Hotel Borobudur Inter-Continental to anticipate fiercer
competition among luxury hotels in the city.

JIHD's president, Jusuf L. Indradewa, said in a public
presentation here yesterday that about 75 percent of the hotel's
866 rooms will be closed during the two-year refurbishment
process beginning next July.

"The hotel has been a leading one in Jakarta for over 20 years
and now faces challenges from new and newly-renovated
competitors. It needs major restoration to remain one of the top
hotels. Renovation will cover the entrance, lobby, restaurants,
bars, lounges, retail areas, laundry, kitchen, rooms as well as
electricity and mechanical systems," he said, adding that the
renovation will be financed with offshore loans.

He also said that after the completion of the refurbishment,
the hotel will have only 735 rooms because some of the rooms will
be combined as superior rooms.

In the company's recent shareholder meeting, JIHD reported
that revenue from the hotel operation slightly decreased to Rp
91.7 billion last year from Rp 94.4 billion in 1992 due to an 8.4
percent decline in hotel revenues.

JIHD, which is listed on the domestic capital market, is 16.1
percent owned by the government, 15.8 percent by Tommy Winata,
13.4 percent by Sugianto Kusuma, 24.9 percent by domestic
investors and 29.8 percent by foreign investors.

The company's chief executive officer, A. Antonio Zamora, said
that the establishment of new star-rated hotels has made
competition in Jakarta quiet strong, thereby affecting old
hotels.

"Hotel Borobudur's occupancy rate has been estimated at almost
70 percent this year. Without refurbishment, we will not attract
new customers," Zamora told The Jakarta Post, adding that by
renovating the old-style mechanical and electricity systems, the
hotel will be more cost efficient in energy utilization.

He said that three companies from the United States and
Australia will get involved in the refurbishment.

Super bloc

Jusuf also said yesterday that JIHD's profit is estimated to
reach Rp 37.9 billion this year but is expected to fall to Rp
11.4 billion next year before rising back to Rp 47.5 billion in
1996.

He explained that the fall in next year's profit will be
caused by the failure of the company's subsidiary, PT Danayasa
Arthatama, to sell major parts of the Sudirman Central Business
District (SCBD), a super bloc it is developing on Jl. Sudirman in
South Jakarta.

"The failure will financially influence JIHD because we will
renovate Hotel Borobudur Inter-Continental in 1995 and 1996," he
said.

Danayasa's president, Nasroel Chas, said that the 44-hectare
SCBD is divided into 24 lots with widths ranging between 6,000
square meters and 2.5 hectares.

"Danayasa, set up in 1988, is assigned to develop SCBD and
market the lots. So far there are six lots which are being
developed, each by PT Taspen, PT Danareksa Jakarta International
(JDI), PT Primagraha Maju Makmur (PMM), PT Artha Graha and PT
Jakarta International Artha (JIA).

Artha Graha is a company whose executives are associated with
JIHD and Taspen is the civil servant saving and insurance
company, while Danareksa Jakarta, which is developing a 32-story
Jakarta Stock Exchange (JSX) Building, is a join venture between
JIHD (49 percent), the state-owned finance firm PT Danareksa (45
percent) and PT Nusacitra Centra (six percent).

Jusuf said about 90 percent of the JSX Building's office
rooms, which will start operation next month, have been reserved
for leasing.

JIA will establish a five-star 42-story Conrad Hotel on its
35,250-square-meter area in the SCBD at a cost of $229 million,
which will be managed by Conrad, an international subsidiary of
Hilton Hotels Corp. of the United States.

According to JIHD's head for corporate planning, Higino V.
Jovellana, the ground breaking of the 700-room hotel, which is 90
percent owned by Danayasa and 10 percent by Conrad, will be held
in May.

PMM, 100 percent owned by Danayasa, is developing Casabella
apartments within the super bloc.(icn)