Hotel industry thrives in 1st half: Colliers

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.