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