HII plans hotel expansions worth Rp 16.9b
HII plans hotel expansions worth Rp 16.9b
JAKARTA (JP): State-owned PT Hotel Indonesia International
which recorded losses of Rp 16.9 billion (US$7.68 million) in the
first six months of this year, announced yesterday that it plans
to make major expansions costing up to Rp 800 billion.
The company's president, Indra Setiawan, said at a
presentation yesterday that Hotel Indonesia's sister company, the
Natour Group, also plans to carry out renovations costing Rp 200
billion to a number of its hotels.
"We have conducted studies to optimize the utilization of our
assets which have so far been inefficiently managed," Indra said,
adding that the projects would be funded by the private sector.
He said that Natour and Hotel Indonesia (HII) currently manage
17 hotels in the country, all in prime locations.
The renovations are aimed to upgrade HII hotels' ratings from
three to five stars. Natour's two-star hotels will be replaced by
three-star hotels or over.
Hotel Indonesia, Hotel Wisata International, Bali Beach Hotel,
Ambarrukmo Palace Hotel and Putri Bali Hotel are among those
grouped under HII and will be renovated and expanded.
Indra said that Hotel Indonesia's interiors will be
refurbished, while new buildings -- including a 30-storey
building housing shopping arcades, business centers and
apartments -- will be built on the six-hectares of vacant area
near the hotel and the adjacent Hotel Wisata International.
The Bali Beach Hotel, he said, will get additional bungalows,
a convention center and traditional markets on the surrounding
10-hectares of vacant.
The Ambarrukmo Palace Hotel in Yogyakarta, which has 3.1
hectares of empty land, and the Putri Bali Hotel, with 1.2
hectares, will get additional buildings.
Natour hotels to be renovated include the Samudra Beach, Darma
Deli, Dibya Puri, Simpang, Tretes, Prapat, Sindu and Natour Bali
hotels.
Start
"Hopefully, the projects can start next year," Indra told
reporters.
He was optimistic that HII's and Natour's poor financial
performance would not hold back investors.
"The Asia-Pacific tourism market is on the rise. Besides, I
have already been approached by two or three private companies
which are very interested in joining the projects," Indra said.
He said that the scheme under which HII, Natour and the
private sector would collaborate has yet to be determined.
"(The projects) could either be conducted under a build-
operate-transfer scheme or an operational cooperation. But we
will decide who to work with after an open bid," he said.
Indra acknowledged that foreign investors could join in the
bid, but stressed that the consortium leader should be the
group's local partner.
During the presentation, which was attended by bond-holders
and business analysts, Indra said that HII's before-tax deficit
last year reached Rp 25 million, deepening by 82.2 percent from
1993.
Compared to the first six months of 1994, the before-tax
deficit of Rp 16.9 billion in the corresponding period of this
year indicated an increase of 13.3 percent.
Indra said that losses were caused by, among others, high
construction expenses and increasing interest payments.
This year's losses are estimated to reach Rp 23 million. They
are hoped to decline to Rp 18.5 million in 1996, Rp 12.4 million
in 1997 and Rp 5.1 million in 1998. In 1999, the company expects
to earn a profit of Rp 3.8 million. (pwn)