Hotel strives to survive crisis, security issues

LEGIAN, Bali (JP): First the haze, then the monetary crisis. As if those were not bad enough, the tourist industry is enduring another blow from media coverage of the riots that have erupted in many towns across the country as people grapple with ever increasing prices of the staples.

Theoretically, the plunge of the rupiah against the U.S. dollar by 73 percent should have brought in hordes of tourists to the country.

"The rupiah depreciation should have made tourism in Indonesia cheaper... but the reality is that it is now down," Pontjo Sutowo, chief of the Indonesian Hotels and Restaurants Association, said.

The haze and media reports about the riots are mainly to blame. No less than Joop Ave himself, the minister of tourism, post and telecommunications, felt the need to come forward to assure the international community of the security situation in the country.

But, as Kamal K. Kaul, general manager of The Oberoi, Bali, put it, no one can beat the media's clout.

"Our occupancy rate has dropped to 40 percent from 65 last year. Some of our guests have canceled their reservations because of reports of the riots. We have tried to explain to them that Bali and Lombok are safe, that our resort in Lombok is 80 kilometers away from Praya, where rioting flared on Feb. 13 and 14. But we could not beat media impression of the security situation (in Indonesia)."

Another problem is the scant knowledge about Indonesia. Many foreigners have no idea of the size of the country, where Bali or Lombok is, and that most protests and riots have taken place in Java, the center of political activities.

"They lack this sense of geography," Kaul said. He added that the Indonesian Tourism Promotion Board should be more active in providing information, including geography and the security situation, on the nation's tourist destinations.

The crisis has resulted in a tariff war among hotels, many offering discounts up to 50 percent.

"We are reviewing our marketing strategy for 1998. The 1998 budget was the most difficult assignment in my 27 years in the hotel industry. We have reduced our rates by 12 percent for Bali and 20 percent for Lombok because we must maintain our standard and reputation concerning the level of guests who come. We cannot survive if we sell at $100 per night," Kaul pointed out.

Room rates range from US$225 to $750 at The Oberoi, Bali, and from $200 to $750 at The Oberoi, Lombok. The dollar rate at both resorts is tied to the market rates.

Despite the multiple problems, Kaul is optimistic that The Oberoi can still bring in business, from Europe in particular. Its guests come from all over the world, with over 50 percent of them residing in Europe, and the largest originating countries being Germany, providing 28 percent, and the United Kingdom with 10 percent. Thirteen percent of guests are from the U.S., 11 percent from Australia and 10 percent from Japan.

"This is a great place for a great value of money, although we have increased our prices for food and beverages," he said. "Nasi goreng (fried rice), for example, is Rp 76,000 now, or about $7. Where else in the world can a guest find nasi goreng at that price in a place like this? Aside from that, Malaysia Airlines, Singapore Airlines and Thai Airways fly direct to Bali and this is another benefit for our guests."

For domestic guests, Merpati Nusantara Airline flies to Mataram 10 times daily from Bali and Jakarta.

Kaul also would like to see more Indonesian guests, who now make up about 2 percent and 5 percent for Bali and Lombok respectively.

"So far, 60 percent of our local guests are expatriates and embassy people," he added.