Hotel industry showing sign of slow recovery

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)