HI reports this year's loss of over US$9m

JAKARTA (JP): PT Hotel Indonesia International (HII), which operates seven state-owned hotels, yesterday reported a 52 percent increase in this year's loss to an estimate of Rp 20.86 billion (US$9.52 million).

Widjaja Sugarda, the president of PT Hotel Indonesia International Corporation and Natour (HIIN), said in a public presentation here that HII will likely continue suffering losses in the next two years, with a projected loss of Rp 12.18 billion in 1995 and Rp 2.87 billion in 1996.

HIIN is a merger between HII and PT Natour, which runs 10 hotels, bringing the total of hotels to 17.

Widjaja said that HII expects to gain a profit of Rp 6.9 billion in 1997 and Rp 17.13 billion in 1998.

HII, set up in 1966, operates seven star-rated hotels, including Hotel Indonesia and Hotel Wisata International in Jakarta, Samudra Beach Hotel in Pelabuhan Ratu of West Java, Hotel Ambarukmo Palace in Yogyakarta, Hotel Putri Bali and Grand Bali Beach Hotel in Bali and Manado Beach Hotel in North Sulawesi. HII merged with Natour in September last year and the merger company is temporarily called HIIN unless shareholders decide another name after a meeting later this month.

According to Widjaja, last year's increase in losses of HII was caused mostly by a fire which razed Hotel Bali Beach in early 1993, which now operates a total of 605 rooms after being renovated with an additional investment of Rp 86.48 billion derived from loans from Bank Bumi Daya, insurance and bonds issuance.

He said that the annual depreciation of the Grand Bali Beach Hotel, the new name of Hotel Bali Beach, has increased from Rp 477 million before the fire to Rp 5.38 billion afterwards, while interest payments on loans for the hotel have increase from Rp 2.4 billion to Rp 7.83 billion.

Renovation

"Because most of HII's hotels are aging properties, we plan their refurbishment, while expanding our business into the development of apartments," Widjaja told reporters after the presentation.

He said that his company owns a 2.8-hectare plot near Hotel Wisata in Central Jakarta, which will be developed as a super block comprising of a luxury hotel, apartments, a shopping center and other facilities.

"Just wait and see," he said, refusing to give any further details.

In 1992, HII signed an accord with a private company, owned by one of President Soeharto's son-in-laws, to develop the plot with an investment of $200 million. The accord was then halted due to a financial disagreement.

Widjaja said yesterday that the old age of HII's hotels is the main problem of competing in the hospitality industry.

"To improve the hotels' management and competitive advantage, we are negotiating with several international hotel management firms, including Accor, Radisson, Southern Pacific and Holiday Inn for the establishment of a new management company to manage our hotels," he said.

He also said that within the next two years, HIIN is expected to float shares on the domestic capital market.

Widjaja said earlier that his company needs about Rp 300 billion for the refurbishment of 15 of HIIN's 17 hotels.

HIIN suffered total losses of Rp 16 billion in 1993, much more than the Rp 620 million deficit in the previous year.(icn)