Hotels to increase room rates

Hotels to increase room rates

Fitri Wulandari, The Jakarta Post, Jakarta

Low occupancy rates coupled with the recent hikes in fuel
prices, and telephone and electricity charges, as well as the
increase in the minimum wage might prompt hotels to increase
their room rates this year, a hotel association said.

"Increases in the room rates are unavoidable given the
increasing burdens on the hotel operators as the result of low
occupancy rates, and the increases in fuel and electricity prices
and wages," Yanti Sukamdani, chairperson of the Indonesian Hotel
and Restaurant Association (PHRI), was quoted by Antara as
saying.

She failed, however, to provide details of the likely
percentage increase.

Last month, the government decided to raise fuel prices by an
average of 30 percent, electricity by 6 percent and telephone
charges by 15 percent.

In Surabaya, Yulianto, chairman of the PHRI's Surabaya chapter
said that star-rated hotels in Surabaya had increased their room
rates by between 10 percent and 20 percent.

"Most five star hotels have upped their rates to an average of
US$50," Yulianto said.

Diyak Muhalela, director of the Tourism Development
Information Institute (Lepita) said hotels were now facing a
dilemma under the current condition.

"They might lose their customers if they increase their room
rates but if they don't, they might not be able to cover their
operating costs," Diyak told The Jakarta Post.

According to Diyak, the average occupancy rate in Jakarta was
now around 40 percent. There are 33,000 rooms in non-star and
star-rated hotels in Jakarta.

"With a lower occupancy rate, how can the hotel be expected to
survive?," he asked.

Meanwhile, in Jakarta, some hotels have already increased or
in the process of increasing their room rates.

Diah Sedyawati, public relation officer for the three-star
Ibis Kemayoran hotel said that the hotel had already increased
its room rates by around 15 percent earlier this year.

"We just wanted to anticipate the increasing operating costs
due to the hike in prices," Dian told The Post.

The four-star Mercure Slipi in West Jakarta also plans to
raise its room rates by up to 20 percent by the end of 2002.

"We don't want to shock our customers. So we will increase the
room rates in stages until we reach 20 percent by the end of this
year," R. Endang Prasdianti, Mercure Slipi's public relations
manager said.

The hotel has 200 rooms with prices ranging from Rp 400,000 to
Rp 10 million depending on the length of stay.

Similar to the Ibis Kemayoran, Endang said that the hotel had
to increase room rates to cover soaring operating cost.

"With the increased electricity and fuel costs, hotel
operating costs will be up by between 50 percent and 100
percent," she added.

Some hotels however have not yet make a decision.

The Mulia Senayan, a five-star hotel in the heart of Jakarta,
said that it would keep its prices unchanged.

"As of today, we haven't any plans to increase rates," said
Ratna S. Idris, the Mulia's public relations officer. Known as
one of the most exclusive hotels in the capital, the Mulia has
around 1,000 rooms.