Hotel industry showing sign of slow recovery

JAKARTA (JP): The hotel industry's sluggish post-riot period has shown signs in the last two months of coming to an end, with occupancy rates climbing to above 40 percent from less than 20 percent during the first half of the year.

Hoteliers attributed the improvement in the industry to the relatively stable economic conditions and political situation over the last two months.

They said that despite the country often being rocked by on- again, off-again street demonstrations, the situation had been very encouraging lately as business activities in the capital had started to pick up again.

"Our occupancy rate has been improving to between 30 percent and 40 percent since August as many people are coming back to the country to continue their businesses. Some big international companies have held meetings here," the Jakarta Hilton's public relations executive Dewi Widiyanti told The Jakarta Post on Friday.

She said that the Hilton suffered an average occupancy rate of about 25 percent in the May-to-July period.

Hotel Mercure Rekso Hayam Wuruk's general manager Tristan Beau de Lomenie echoed Dewi's view. He said that his hotel's occupancy rates was also rising.

"As most of our guests are business guests, our monthly occupancy rates were over 40 percent in August and September, improving from around 29 percent in July. This month, we expect the rate to exceed 40 percent," he told the Post.

"People are starting to be brave about having big events, such as weddings or business meetings. We have more than two wedding receptions every week."

The Regent, Le Meridien, Santika and Kartika Chandra also said their occupancy rates were improving to over 40 percent for the same reasons.

"Our monthly occupancy rate actually is over 60 percent since August. It was always about 50 percent in June and July," Kartika Chandra public relations manager Dhanny said.

But Sari Pan Pacific's director of marketing communications Satria Wira said that his hotel's occupancy rates had stayed flat and that there had been no a significant growth over the last two months.

"It is still ranging between 30 percent and 50 percent, and I believe that other hotels are still experiencing the same situation too," he said.

Declines

The country's hotels have mostly seen drastic declines in their occupancy rates since July last year due to the downturn in tourist arrivals following a series of natural disasters and plane crashes. The May riots in Jakarta, which left hundreds of people dead and led to the resignation of president Soeharto, almost resulted in foreign arrivals drying up altogether.

Tourism started to improve in June but uncertainty over the political situation still scared off foreigners.

Since then, the country's hotels have been facing tight competition due to the lower numbers of foreign visitors and collapse of domestic tourists' purchasing power.

Executives of star-rated hotels especially, those based in Jakarta, are still worried about the prospect of the industry within the next three months despite the improving outlook in the last two months.

They said that the political situation could worsen again prior to and after the People's Consultative Assembly's (MPR) special meeting in November.

The MPR is scheduled to set the schedules of the general election and other political agendas. Dissatisfaction over the result of the meeting could trigger massive street rallies or even unrest.

"The prospect is still unclear for the next few months. Business may slump again during the extraordinary session and after that we will enter the Ramadhan fasting season," de Lomenie said, adding that during Ramadhan, which begins in mid-December, the travel and hotel businesses were traditionally bearish.

"There will be no business meetings or business activities during the special session. And people do not commonly travel during the fasting month," the Regent's public relations manager Nuni Sutyoko-Rasad said.

Both de Lomenie and Nuni predicted that occupancy rates would likely pick up again after the Islamic Idul Fitri holiday at the end of the fasting month, providing the country's economic and political situation had improved further. (gis)