Jakarta's five star hotels in doldrums amid tourism slump: Consultant
Jakarta's five star hotels in doldrums amid tourism slump: Consultant
The Jakarta Post, Jakarta
Five star hotels in the Greater Jakarta area have borne the
worst impact of the slump in tourism that has hit the country
following the global economic slowdown and the Sept. 11 terrorist
attacks on the United States, a property consultant said on
Thursday.
Colliers Jardine Indonesia, referring to its latest "Greater
Jakarta Hotel Market" report, said on Thursday that the occupancy
rate at Jakarta's five star hotels was less than 35 percent in
the third quarter of the year.
Generally, the company said, these deluxe hotels have been
beset by an excessive supply of rooms and a limited demand for
them due to the dwindling tourist arrivals following the economic
slowdown and the terrorist attacks.
So far, 15 five-star hotel projects in the capital with 1,883
rooms in the pipeline have been canceled or deferred due to the
deepening economic crisis, the company said.
"Spiraling operational costs induced by inflation, coupled
with the recent increase in utility charges have led to a 11.5
percent increase in the average room rate of five star hotels to
US$66 per room per night.
"This will further undermine the appeal of five-star
accommodation against three and four star hotels, which are more
competitive due to their affordable rates for ordinary visitors,"
company managing director Richard Rossiter said.
As of the third quarter this year, five star hotels with a
total of 8,878 rooms, account for 41 percent of Greater Jakarta's
hotel stock, followed by four star hotels with 8,012 rooms or 37
percent and three star hotels with 4,764 rooms or 22 percent.
Three and four star hotels, being more affordable to ordinary
tourists, fared better in the third quarter than their five star
counterparts. Some of them have even increased their room rates
whilst maintaining occupancy rates at a reasonable level,
Rossiter added.
Over all, demand for hotel rooms in Greater Jakarta remained
largely stagnant with only 46 percent of the total stock taken up
during the third quarter, he said.
Rossiter said the country's hotel industry would remain in the
doldrums for the next 12 months.
"It is widely anticipated that the local hotel industry will
only start to recover in the later part of 2002 on the back of a
rebound in the macro economy. When this happens, three star
hotels are likely to lead the market recovery with a higher
occupancy level of almost 78 percent.
"Yet, the market for four and five-star hotels will remain
depressed pending further signs of a global and local economic
recovery over the coming one-to-two years," he said.