New ruling on int'l hotel to be introduced
By I. Christianto
BALIKPAPAN, East Kalimantan, (JP): The government will require foreign hotel management firms to establish subsidiaries in Indonesia when they want to operate hotels in the country, a minister said yesterday.
Minister of Tourism, Post and Telecommunications Joop Ave said that the new policy, which will possibly be made in the form of a ministerial decree, will enhance the development of human resources in the hotel industry in Indonesia.
"I will very soon issue a decree related to government regulation No. 20 that allows foreign investors to own up to 100 percent shares in a company that they wish to establish in Indonesia," he said. "At the present time, international chains do not have any company in Indonesia in spite of the introduction of incentives."
Joop, who officially opened a four-star Dusit Inn hotel here yesterday, said that more international hotel management firms are welcome to enter Indonesia but they will have to do business through a locally-incorporated company.
"Very soon, in 1995," he said when asked when the planned ruling would be issued.
There are currently about 34 international hotel management chains operating in Indonesia.
"We have to admit that hotels run by international chains have so far supported Indonesia's tourism industry and most of them have better capability in the marketing strategy as they own worldwide networks," Joop said.
The minister said recently that by establishing subsidiaries in Indonesia, international hotel chains will have to increase investments in the country.
Meanwhile, chairman of the Indonesian Hotel and Restaurant Association Ponco Sutowo, who also attended the ceremony yesterday, told The Jakarta Post that the minister's idea was actually input from the organization.
"So far, we can't immediately solve problems such as strikes because international hotel management firms operating in the country have no bases in Indonesia," he said.
He said strikes are usually solved by the owners of the hotels, though the employees are recruited by the management firms.
Hotel
The 191-room Dusit Inn which was inaugurated yesterday is owned by PT Sinarwisata Permai, a subsidiary of PT Duta Pertiwi. Duta Pertiwi is the real estate division of the widely diversified Sinar Mas Group.
The five-story hotel is the first in the country to be operated by Pacific Hotels and Resort, a subsidiary of Dusit Thani of Thailand which runs several hotels in the Thai cities of Phuket, Bangkok and Chiangmai and in Dallas of the United States.
Duta Pertiwi's president, Muktar Widjaja, said that the hotel was constructed in 20 months on a 19,100 square-meter plot with an investment of Rp 48 billion (US$21.8 million).
"The hotel started its soft operation on June 9 and we are now constructing the second Dusit Inn at Mangga Dua in Jakarta which is expected to open next year," he said.
The hotel's general manager, David Good, told the Post that during the nine-month soft operation, the occupancy rate of the hotel reached 50 percent and will probably reach 55 percent next year.
He also said that Dusit Inn is now classed as a major hotel in East Kalimantan, a province with emerging tourist destinations including eco-tourism, adventure tourism and natural habitats.
Meanwhile, East Kalimantan Governor M. Ardans said the province will receive more foreign visitors in the coming years as the Sepinggan airport now accommodates international flights.
He said that early this month Royal Brunei started flights linking Balikpapan and Brunei Darussalam, while Malaysian Airlines is expected to start its service to Sepinggan airport early next year.