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.