Heading for a better future

Heading for a better future

I. Christianto, Contributor, Jakarta

After years of stagnant business, the hotel industry is
estimated to have better days this year thanks in part to an
improvement in the country's economy.

Property consultant Collier Jardine says improvement in the
domestic economy, the government's strong commitment to protect
the safety of foreigners and the end of the United States-led
attack on Afghanistan would create a more conducive environment
for the Indonesian hotel industry.

Hotel owners expect that the change in the business climate
will bring new fortunes for their accommodation facilities after
several years of hardship.

"We hope a change in the business environment will bring new
hope that the hotel industry will see better days," a hotel
executive said.

The crisis in the world's travel industry following the
terrorist attack on the United States in September last year
caused a sharp drop in the number of foreign visitors to
Indonesia, causing difficulties to the country's major hotels.

The impact became even worst after local Muslim radicals
launched protests against the U.S.-led strikes against
Afghanistan.

Indonesia saw some 5.1 million foreign tourist arrivals last
year, an increase from 5.06 million people in 2000. Although
there was a slight increase, foreign tourist arrivals during the
year were far below the government's target.

With the fewer than estimated foreign tourist arrivals,
competition among 822 star-rated hotels, mostly in Jakarta and
Bali, became fierce. The competition became even fiercer
following the opening of a few new hotels late last year.

The new hotels are the three-star FM1 Boutique Hotel in Slipi,
the four-star Alila Hotel and the five-star JW Marriott in Mega
Kuningan, Jakarta. The five-star Le Meridien in Jakarta also
added more rooms.

Thirty-four hotel projects with a total of 11,394 rooms in the
pipeline have been canceled or postponed due to the deepening
economic slowdown.

These projects would have contributed to a 52 percent increase
in Greater Jakarta's total hotel inventory. There is no
indication as to when the projects will resume.

Data from Colliers Jardine shows the number of rooms operated
by five-star hotels has reached 8,878, representing 41 percent of
the total rooms offered by star-rated hotels in Jakarta.

Four-star hotels offer 8,012 rooms or 37 percent of the total,
while three-star hotels offer 4,764 rooms or 22 percent of the
total.

By location, Central Jakarta, with 13,636 hotel rooms,
accounts for approximately 82 percent of Greater Jakarta's total
hotel room supply. This is followed by South Jakarta (3,510
rooms), West Jakarta (2,060 rooms), North Jakarta (1,226 rooms),
Jakarta outskirts (1,170 rooms) and East Jakarta (52 rooms). Of
the overall supply of hotel rooms in Greater Jakarta, 37 percent
of them are located in the city's central business district
(CBD).

In order to survive from the sharp competition, each hotel
adopts specific marketing concepts to lure guests. The Alila
Jakarta, for example, uses its personalized service to attract
guests. "Our location in Pecenongan is our challenge, but we have
introduced a personalized service to win over the market," Nadira
Alatas Sri Wijanarko of the Alila said.

The Alila Jakarta, opened in May 2001, is designed for
individuals who enjoy a contemporary lifestyle. For example, the
hotel has a special ladies floor. The hotel has an interesting
interior and architecture, which makes it distinct.

Nadira said the hotel targeted local businesspeople, who
constitute 80 percent to 90 percent of the hotel's guests.

"We also offer high-speed Internet access in some rooms,
especially for guests seeking broadband connection," she said.

FM1 Boutique hotel, which opened in September last year,
adopts a different strategy to lure guests, such as by focusing
on entertainment. Located on Jl. S. Parman, the hotel, which has
45 rooms, runs 25 karaoke rooms.

Unlike the others, the all-suite Aston Hotel Jakarta uses the
luxury of its accommodation to attract guests.

Nieke Handayani, Aston's marketing and communications manager,
said guests had more advantages when staying at the all-suite
hotel.

"With the same amount of money, a guest can enjoy more
spacious rooms and feel at home while staying at the Aston," she
said.

One of the new hotels, JW Marriott Hotel, which is located in
the diplomatic area of Mega Kuningan, is optimistic that it will
be able to compete with the old players despite the unfavorable
state of the hotel industry.

The hotel's director of marketing, Andreas Kohn, said there
was no good or bad times for a hotel to open its doors. "We
opened just at the right time," he said.

The 28-year Hotel Borobudur uses its modern security system to
lure guests, especially VIPs. At least three heads of state have
chosen to stay at the Borobudur hotel when visiting Indonesia
this year thanks to its security system.

The hotel is located in a 23-acre garden full of century-old
mahogany trees, a rarity at other local hotels. It also has high-
speed Internet access in some rooms.

Jasmina Janik, director of sales and marketing at Borobudur,
said more world leaders would stay at the hotel when Jakarta
hosted international events over the next few months.

"Borobudur is also constantly improving its services,
facilities and amenities in addition to the popular menus at its
restaurants," she said.