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)