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)