Hotels 'approach doomsday' without government help

Hotels 'approach doomsday' without government help

JAKARTA (JP): The country's hotel industry may soon be on the
brink of its doomsday, mirroring the continuing downhill path of
the tourism sector, unless the government intervenes soon, a
hotel association executive has said.

The Chairman of the Indonesian Hotels and Restaurants
Associations, Pontjo Sutowo, said yesterday that the current low
occupancy rates, especially in Jakarta's hotels, indicated the
industry's negative prospects.

"Relatively speaking, our situation is like the newspaper
industry: three months (like this), we could survive; six months,
so-so; another two years, we'll collapse," Pontjo told reporters,
referring to the ailing press industry which is facing similar
financial difficulties.

A list of adversities, including political tensions and the
recently reignited forest fires in several areas of Kalimantan
has severely damaged the image of Indonesia in the eyes of the
international community, he said.

"People are afraid to come to Indonesia now, and many airlines
have reduced their flight frequencies to the country," Pontjo
said after meeting the newly appointed Minister of Tourism, Arts
and Culture Abdul Latief.

"If the situation persists, the hotel industry will face big
problems," he added.

Another impact would be that the government would not be able
to achieve its foreign exchange revenue targets from tourism
which in turn would cause the existing industry to crumble, he
said.

The associations were managing without dismissing their
workers, unlike other industries which had begin mass layoffs,
"but it's going to be hard not to in the current situation", said
Pontjo, who owns the Jakarta Hilton International hotel.

The country needed to restore its image before it could
promote tourism again, he said.

But tourism promotional activities, which are supposedly
handled by the government-sponsored Indonesian Tourism Promotion
Board, were practically dormant, he said.

The board is burdened with about US$25 million and Rp 2
billion (US$235,000) in unpaid debts, he said, adding "this
doesn't greatly improve our image either".

At the same time, the government was still treating the
tourism industry ambivalently, although it expected the sector to
generate major foreign exchange revenues, he said.

"The government still treats the hotel industry as a luxury
industry," he said.

Hotels are burdened with high costs for facilities and levies
such as high power bills and property taxes, he said.

Misfortune beyond its control has bedeviled with the
country's tourism sector since last year, when the general
election and severe forest fires -- which spread a choking smog
across much of the region -- deterred tourists from traveling
here.

Hot on the heels of these crises, the monetary turmoil hit the
country and its neighboring Asian countries, which had previously
been Indonesia's major tourist markets, sending their currencies
spiraling down against the U.S. dollar.

This year, while the rupiah continued to free fall against the
U.S. dollar, high inflation sparked unrest and protests against
the government, while new and equally severe forest fires blanket
the island of Borneo.

Several countries, including the United States, have issued
travel notices warning their nationals about visiting Indonesia,
considering the political and health issues.

Occupancy rates of star-rated hotels in the capital in the
first two months of this year ranged between 30 percent and 40
percent from an average monthly level of 75 percent before the
economic crisis. (das)