Hotel Borobudur enters new era

Hotel Borobudur enters new era

JAKARTA (JP): The transformed Hotel Borobudur Jakarta entered
a new era on Tuesday when the infant Discovery Hotels & Resorts
officially replaced Inter-Continental Hotels & Resorts as manager
of the five-star hotel.

PT Jakarta International Hotels and Development (JIHD), the
owner of Hotel Borobudur, said the move to change the hotel's
management was aimed at keeping the hotel afloat during the
prolonged economic turmoil.

JIHD president Jusuf Indradewa said his company decided to
seek an Asia-based hotel operator which could offer the
flexibility and service awareness its customers expected.

"After 25 years with a large international management group,
we sought out a management company that could provide the
flexibility and creativity that the current economic situation
requires, including an understanding of that situation, and
giving special attention to both business interests and national
development," he said.

"We feel confident that Discovery Hotels & Resorts' impressive
professional skills and commitment will deliver the kind of top
quality service that our respected customers expect."

First opened in 1974, the Borobudur Jakarta was relaunched in
November 1997 after a 22-month, US$70 million renovation program.

But one year later, Inter-Continental's contract was not
renewed when it expired on Dec. 31, 1998, and the company was
replaced by Discovery.

Jusuf said the formal signing of the hotel management contract
was not held until Tuesday to show respect for the Christmas
celebrations and the Muslim fasting month.

Jusuf also dismissed rumors that the sudden departure of
Inter-Continental last month after managing the hotel for 25
years was aggravated by the worsening relationship between the
management company and JIHD.

"As we approached the completion of the current management
contract with Intercontinental, we thoughtfully assessed the
alternative opportunities for managing our hotel property
entering the new millennium.

"And finally we decided to select Discovery, which we also
help to establish," Jusuf said.

JIHD, a large property developer, is a major shareholder in
Discovery Hotels & Resorts, which was established in Jakarta late
last year.

Discovery's president Antonio Zamora said the Asian economic
crisis has provided a unique opportunity for small, startup hotel
operators, as many hotel owners in Asia have to minimize costs by
replacing their hotel management with cheaper regional hotel
chains.

"A new and exciting trend is sweeping across Asia's hotel
industry as hotel owners are looking at more efficient, more
focused regional hotel management companies to operate their
hotels, replacing giant international hotel chains," he said.

"Appointing those small, agile, efficient hotel chains, which
are not burdened with the enormous overhead costs of
international hotel chains, is one of the best ways to survive
the current crisis."

Zamora, who is also Borobudur's general manager, said
Borobudur's occupancy rate is expected to increase to between 50
percent to 55 percent in the second half of this year. Low
occupancy rates are expected during the first half of the year
due to several planned political events in the country, such as
the general election in June.

"We expect the average occupancy rate this year will reach 35
percent to 40 percent," he said, adding that the hotel occupancy
rate had stood at around 20 percent in past months.

Hotel Borobudur will be the first hotel under Discovery's
management.

Zamora said the recently established hotel operator plans to
sign three additional management contracts in Indonesia next
year.

"We plan to manage one hotel in Bali in March and another one
in Jakarta late this year. Next year, we plan to expand our chain
to Malaysia," he said. (gis)