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

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)