Hotel industry thrives in 1st half: Colliers

A'an Suryana, The Jakarta Post, Jakarta

The hotel business in Jakarta thrived in the first semester of 2002, after a short period of declining performance following the Sept. 11 terrorist attacks last year, market research firm Colliers International said in a report issued here on Friday.

The thriving business was attributed to a stable political climate, economic optimism among consumers, and the floods in Jakarta, which temporarily increased hotel occupancy rates in the surrounding flooding areas, the report concluded.

The report, titled "Jakarta Hotel Market Overview", revealed that the Sept. 21 terrorist attacks last September had reduced the average occupancy levels of hotels, which reached a low of 51.44 percent between September and December last year.

However, as both political and economic stability recovered in the aftermath of the attack, the hotel business started to gain pace in January this year.

Political stability has brought a positive trickle-down effect to the bullish sentiment both in the economy and in the tourist industry.

The rupiah is strengthening against the U.S. dollar, the Central Bureau of Statistics has predicted that by the end of 2002 the number of foreign visitors arriving will reach 5.5 million, 5 percent higher than in 2001.

As a result, the hotel occupancy rate increased to 55.83 percent in the first semester of this year, Colliers said.

The growth was mainly caused by the increase in the number of visitors arriving and the improvement in the domestic economy, it said.

As of June this year, there were 21,948 hotel rooms available in the capital.

Three star hotels booked the highest increase in occupancy rates during the first half of the year, with an average occupancy rate of 79.31 percent.

It was followed by four and five star hotels, with average occupancy rates of 53.17 percent and 35 percent respectively.

Overall, the occupancy rate of hotels increased in all categories, compared to last year.

It must also be noted that flooding in Jakarta during January and February was a blessing in disguise for the hotel industry, especially those that were located nearby the flooded areas.

Hotel markets received short-term benefits from the calamity as many families flocked to hotels for temporary accommodation. During those months, occupancies of some hotels, especially three and four star hotels, rose by 12 percent.

On the industry's outlook, the report said occupancy rates will much depend on the political situation in the country.

Potential threats to security and social wellbeing up to the 2004 General Election could result in a roller-coaster ride for the hotel industry, the report warned.