Foreign investment for hotels down 83.5%

JAKARTA (JP): Foreign investment approved by the government last year for the establishment of hotels plunged by 83.5 percent to US$132.49 million from the previous year, the Directorate General of Tourism says.

The office said in a report here yesterday that domestic investment for hotel construction declined by 33.6 percent to Rp 1.68 trillion ($784.87 million) last year from the previous year.

In terms of projects, the number of hotels -- star-rated and non-star-rated -- to be established with both foreign and domestic investment dropped to 63 last year from 85 in 1992.

In 1991, the government approved $1.23 billion in foreign investment for 18 hotel projects and Rp 4.53 trillion in domestic investment for 113 hotels.

Director General of Tourism Andi Mappi Sammeng told a press conference here yesterday that foreign investment for hotel development was a vital part of investment in the tourism industry, which declined sharply to $304.51 million last year from $1.31 billion in 1992.

The tourism industry projects to be developed include recreation centers, travel agencies, water tourist resorts and restaurants besides hotels.

Andi commented that foreign investors were apparently not interested in establishing new travel agencies, restaurants and tourist resorts last year.

He said that total domestic investment in the tourism industry also dropped from Rp 2.35 trillion in 1992 to Rp 2.12 trillion last year.

"Most of the hotels to be established with the investment committed last year will be located in Jakarta, Yogyakarta and Bali," he said, adding that investors apparently consider that the three cities are still well supported by adequate infrastructures.

Investors are forced to spend a great deal of money to establish new hotels on islands other than Java and Bali due to poor infrastructure , he noted.

According to Andi, Indonesia currently has 570 star-rated hotels totaling 51,116 rooms. (icn)