ITT Sheraton introduces rupiah rates

ITT Sheraton introduces rupiah rates

JAKARTA (JP): ITT Sheraton, a leading American hotel chain,
has now used rupiah as the basis for payment of its rooms and
other services at its nine hotels across the country in a bid to
attract more corporate guests.

The general manager of Sheraton Media, Andreas
Trauttmansdorff, said here yesterday that the use of rupiah rates
would mean a cut in prices up to 60 percent for hotel guests.

Previously, like other hotels, Sheraton used U.S. dollar rates
for rooms and service. The use of the dollar, however, has become
not only volatile, but also too expensive due to a continued
depreciation of the rupiah against the American currency.

"The rates in rupiah affect only residential meetings and
conferences between now and the end of February 1998," he said.

The fixed rates in rupiah are available at Sheraton hotels in
Lampung, Jakarta, Bandung, Yogyakarta, Surakarta, Surabaya, Bali
and Lombok.

He hoped with the change, more Indonesian-based companies
would hold meetings at one of Sheraton's nine hotels in the
country.

"Many companies planning to hold events in the coming weeks
have to put their plans on hold, as quite understandably when
they are quoted in U.S. dollars," he said. "They have seen their
costs rise almost 50 percent."

The rupiah and other Southeast Asian currencies have been
under speculative attack since early July due to a domino affect
of the de facto devaluation of the Thai baht. The rupiah has
since lost more 35 percent of its value against the dollar.

Star-rated hotels could not benefit much from the fall in
rupiah even though most room rates were based in dollars, not
only because they had to pay more for imported products but also
because of a decline in occupancy rates, Trauttmansdorff said.

"Some 1,700 room nights at the 351-room Media Hotel had been
canceled for the September to December period. We expect to reach
60 percent to 65 percent in occupancy rates with the fixed rupiah
rates program," he said, adding that the occupancy rate at
Sheraton Media currently was 50 percent.

In addition to the currency upheaval, the widely published
reports on the country's haze problem and recent Garuda plane
crash has resulted in many trip cancellations.

The government has since lowered the projection for foreign
exchange revenue from foreign tourists this year on fears that
the haze and currency problems will cause a decline in tourist
arrivals.

According to data recently compiled by the Ministry of
Tourism, Post and Telecommunications, revenue from foreign
tourists will total about US$6.5 billion this year, lower than
the initial projection of between $6.64 billion and $7.14
billion.

The number of foreign tourists will be about 5.19 million this
year as compared to the previous projection of between 5.3
million and 5.7 million.

It is estimated that the government will only receive $7.14
billion in foreign exchange from foreign tourists next year,
lower than the original target of between $7.51 billion and $8.14
billion. Foreign tourist arrivals are also projected to decline
next year to 5.7 million from the original target of between 6
million and 6.5 million. (icn)