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)