Int'l hotel chain must set up local firm, hire Indonesians

JAKARTA (JP): Foreign hotel chains operating in Indonesia must set up local subsidiaries by the year 2000, a senior official said yesterday.

Director General of Tourism Andi Mappi Sammeng said foreign hotel chains should employ no more than three expatriates in top management by the deadline.

"The requirement to establish joint ventures and the limitation of foreign executives were stipulated in the minister's decree issued on Nov. 7," he told a hearing with House of Representative's Commission V for tourism, industry and transportation.

He said the foreign hotel chains, which only have representative offices in Indonesia, may establish wholly-owned subsidiaries or joint ventures with local partners.

"The idea is that the subsidiaries must be incorporated in Indonesia," he said.

Andi said the decree, signed by Minister of Tourism, Post and Telecommunications Joop Ave, only affected foreign hotel chains managing five-star hotels and that a decree on chains operating four-star hotels or below was being processed.

"The requirements for overseas hotel chains operating four- star (hotels) -- or less -- in Indonesia are likely to be stiffer," he said.

At least 50 overseas hotel management chains are operating in Indonesia. Those running five-star hotels include the United States' Holiday Inn, Westin, Inter-Continental, Hyatt and Sheraton; Britain's Le Meridien and Hilton International; Canada's Regent & Four Seasons; Spain's Melia-Sol; Hong Kong's Century International Hotels, Oriental, Aman Resorts and Shangri- La; and Japan's Imperial and Nikko.

Other foreign chains planning to manage five-star hotels in Indonesia include Conrad, Kempinski, Marriott, Accor, Ritz Carlton, Peninsula and Choice.

Some of the companies, like Century, Shangri-La and Hilton, have set up domestic firms to manage their local hotels.

The government expects its local subsidiary requirement will improve hotel human resources because there will be less strikes and other problems, he said.

Some domestic firms which own five-star hotels face frequent strikes because representative hotel-management offices do not have authority to deal with industrial action.

Strikes are usually solved by hotel owners, though the staff are usually recruited by management firms.

On the new regulation, the general manager of the Westin Hotel in Surabaya, Alphy Johnson, told The Jakarta Post yesterday that Westin would obey the regulation because it wanted to open more hotels in Indonesia.

"After the grand opening of this hotel scheduled for next week, we plan to run other hotels in Jakarta and Bali. Westin has training programs to improve the qualifications of its staff."

Spokespeople for the Shangri-La hotel in Jakarta, Romy Herlambang, and for the Grand Hyatt Jakarta, Renata Sofjan, said their hotels would not comment because they had not received official notification on the matter.

Shangri-La Jakarta is managed by an Indonesian-incorporated firm, named PT Swadharma Kerry Satya, Romy said. (icn)