Hotels in Batam agree to end their price war
Hotels in Batam agree to end their price war
BATAM (JP): Hotels on this bonded island have agreed to end
their price wars, setting the maximum discounts at 20 percent of
the published rates.
The local branch of the Indonesian Hotel and Restaurant
Association (PHRI) noted at a meeting on Wednesday that the price
wars between hotels had thus far turned into unhealthy
competition.
"We have agreed to end the price wars in order to maintain
sound business operations," said Sjahnan Lubis, chairman of the
association after the meeting.
The association decided to empower the Batam Development
Authority to impose sanctions on hotels granting discounts of
more than 20 percent.
"The meeting also decided that new hotels will grant special
promotional rates only within three months after the start up of
trial operations (soft opening)," Lubis added.
Lubis said local hotels also agreed to charge higher rates
during the weekend to offset lower prices on the weekdays.
"There should be a mechanism to ensure healthy competition,"
said Alim Muljadi, executive assistant manager of Nagoya Plaza
hotel.
There are now 22 star hotels with at least 300 rooms in Batam.
Four more are expected to begin operating within the next few
months.
Batam earned US$249.8 million from foreign tourist spending
last year.
Another hotel executive complained that several shop houses on
the island have been illegally offering accommodation facilities
to travelers at very low rates.
"The Batam authority should act firmly to cope with this
problem because the illegal inns not only create unhealthy
competition for hotels, but also reduced government tax
receipts," said Adi Koesnadi, general manager of the Batam Orchid
Hotel.
Bali slump
Meanwhile the Bali chapter of PHRI Bali confirmed that many
foreign tourists have canceled their visits to the island lately
due to the fear that the tsunami that hit East Java last week may
also strike Bali.
"Many travel bureaus and tour operators from Japan, Australia
and European countries have contacted me and asked about the
safety to visit Bali," said Tommy Raka Afcia, chairman of Bali's
PHRI.
The situation in Bali now is much different than it was in
June last year when it was hard to get hotel rooms.
"Now you can get rooms without prior reservations," he added.
Another reason for the diminishing hotel business is the
competition from other countries, such as Malaysia, Vietnam and
China. "Penang, Malaysia give big discounts to tourists and
Vietnam and China have been more aggressive in wooing foreign
travelers," Tommy said.
The problem has been exacerbated by a decrease in tourist
arrivals from Australia -- the largest single supplier of
visitors to Bali -- due to unemployment and the termination of
special rates for tourists on many airlines, he added. (rmn/yns)