Hotel industry sees better growth for 2000
Hotel industry sees better growth for 2000
JAKARTA (JP): Jakarta's hotel industry is projected to see a
between five percent and 10 percent growth in room occupancy
rates this year due to increasing business activity, an analyst
said earlier this week.
Djodi Trisusanto, the associate corporate advisor for hotel
property consultant PT Procon Konsulindo/Jones Lang LaSalle
Hotels, said signs of business recovery were expected in
February, with more foreign visitors arriving in the city to
resume delayed business agendas.
He said the new government under the leadership of President
Abdurrahman Wahid had, relatively speaking, been able to induce
foreign trust in the country.
"As the sense of certainty is slowly reinstated, the foreign
business community, which had delayed their activities due to the
country's uncertain political developments in 1998 and 1999, are
expected to return to Jakarta in February after the holiday
season to resume activities or start feasibility studies on
possible new business here," he told The Jakarta Post.
He said a significant return of business activity in Jakarta
was very important, especially for four and five star hotels.
He said four and five star hotels were expected to improve
their occupancy rates slightly by five percent, to between 35
percent and 40 percent, this year.
Meanwhile, three star hotels are projected to enjoy a higher
growth rate of 10 percent to an average of 50 percent.
He said occupancy rates at three star hotels would be able to
grow more because their main market, the domestic business
community and travelers, had started to resume activities since
last year following the relatively peaceful presidential
election.
Tourism industry expert Diyak Mulahela said top-end hotels
would likely stop their discount war this year because of
improving occupancy rates and cash flow positions.
The hotel industry has experienced a financial downturn and
tighter competition, in line with the dramatic fall in most
business activities in the country since the monetary crisis in
mid-1997.
Jakarta has been considered as a less desirable destination,
hence its visitors numbers have begun to drop.
Hoteliers, struggling to keep their operations running amid
skyrocketing operational costs, have cut their costs. Revenue is
being generated from other services such as food and beverages
outlets.
"With their current cheap rates, many big hotels are not able
to gain adequate profits, even when all their rooms are occupied.
So they must adjust their room rates," Diyak said.
Djodi predicted average room rates for Jakarta's five star
hotels, especially those located in the premier business district
around Jl. Sudirman and Jl. MH Thamrin, would rise slightly to
around US$80, from $75 in 1999 but lower than the $105 offered in
1998.
An economist from the University of Gajah Mada, Sri
Adiningsih, warned the process of recovery in the ailing hotel
industry this year would still be vulnerable to the country's
social and political situation.
She said a full recovery in the hotel business could be
accomplished only if supported by a vigorous economic recovery
with a stable political environment.
"The problem is that indicators of economic recovery are still
fragile as they are very much dependent on the uncertain
development of the country's politics," she said.
Djodi shared Sri's opinion and said that any disruption to
political stability would scare away tourists and businesspeople.
Assuming that Indonesia's economy grows positively this year
and without political disruption, the government expects to see
between 5.4 million and six million inbound arrivals this year,
bringing in roughly $6.3 billion.
The country received 3.9 million foreign visitors in 1999,
contributing about $3.4 billion in foreign exchange.
Indonesia currently has over 822 star-rated hotels, mostly
located in Jakarta and Bali, with a total of 83,707 rooms.
Djodi said no new hotel rooms were expected this year as most
of the current available ones were still vacant. (cst)