Hilton quits Indonesia after prolonged dispute
JAKARTA (JP): Hilton International has withdrawn all its services from all its hotels in Indonesia following a prolonged dispute with the hotels' owner here over payment, the hotel chain's top executive confirmed on Friday.
President of Hilton's Asia Pacific division Koos Klein said the withdrawal affected five hotels including the Jakarta Hilton International, Lagoon Tower Jakarta Hilton International, the Hilton Residence, Patra Surabaya Hilton International and Bali Hilton International.
The five hotels are all owned by local hotelier PT Indobuildco, a company controlled by businessman Pontjo Sutowo and his family.
Klein said the five hotels may continue to carry the Hilton name until the dispute was settled. However, Hilton would not be responsible for the level of service guests at the five hotels would receive and would decline all liability and responsibility in relation to the hotels and their guests until the dispute was resolved, he said.
He said that the dispute emerged after the hotel owners failed to pay Hilton International and group companies for the global sales, marketing and distribution services provided to the hotels.
"We hope it (the withdrawal) is only temporary. We'll be happy to restart the management services as soon as the dispute is settled properly," he told The Jakarta Post by phone from his Singapore office.
He said Hilton International has been trying to settle the dispute with Indobuildco but has not found a constructive solution so far.
Klein said Hilton International had held direct management control over the five hotels for a long period until in 1996 it and Pontjo's Indobuildco formed a joint venture company, PT Kelola Santana, to take care of the management and daily operation of the hotels.
Klein said Hilton also has a separate dispute with its counterpart with regard to their joint venture company.
Under the agreement, Hilton and its counterpart jointly appointed the chief executive to their joint venture company, he said.
"But our local partner has recently withdrawn its support for the chief executive, causing the person to leave the country because his working permit could not be extended without the support of our local partner.
"Now we have no chief executive to handle the company and that certainly affects our hotel's services," he said.
Klein said Hilton would continue to work toward a resolution of the situation.
Pontjo was not available for comment but Jakarta Hilton's public relations manager, Dewi Widiyanti, confirmed Hilton's withdrawal.
She said that sales, marketing and distribution services for the five Hilton hotels here were now handled directly by Indobuildco.
However, she declined to comment on the fee dispute between Hilton and Indobuildco.
"That's between Hilton and the hotel's owner company. You'd better talk to Pak Pontjo, but he's currently out of town until Monday next week," she told the Post.
As an impact of the withdrawal, the five hotels were no longer linked with the other Hilton properties worldwide and reservations should now be made directly to each of the five hotels here, she said. (cst)