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)