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)