Star-rated hotels to see lower occupancy rates

JAKARTA (JP): Occupancy rates and room rates at star-rated hotels in Indonesia are likely to decline this year, given the substantial supply in 1996 and the expected substantial addition of rooms this year.

Hong Kong-based property consultant Colliers Jardine said in its latest research report that average occupancy rates would decline to about 60 percent across all hotel grades over 1997, while average room rates would slip in the course of 1997 with five-star hotel most affected.

Last year, an additional 2,073 star-rated hotel rooms entered the market in Jakarta, increasing the capital's total inventory to 15,300 rooms, out of which 36 percent were five-star hotel rooms.

More than 6,000 rooms are scheduled to complete in 1997, with 30 percent carried forward from 1996 as a result of delayed construction. Another 7,000 rooms will become available next year.

Colliers said Indonesia's visitor arrivals from overseas rose to approximately 4.78 million in 1996, compared to 4.32 million in 1995. Arrivals are expected to further increase this year, but the increase would be less than the increase in hotel rooms.

Three-star hotels continued to perform strongly with an average occupancy of 74 percent and average daily room rate of US$53 and $87.

However, a tightening in this market resulting in a fall in average occupancy and stabilizing average rates is anticipated by the end of the year when another 2,113 three-star hotel rooms enter the market, according to Colliers.

Five-star hotels on the other hand would face the toughest competition in light of the large supply to date along with substantial imminent additions of rooms this year, the company said.

The average occupancy of selected five-star hotels was 67 percent by the end of last year and would decrease to about 60 percent by the end of this year.

During 1996, the average occupancy rates of four-star and three-star hotels reached 67 percent and 70 percent respectively.

This year would also see five-star hotels offering more competitive rates as opposed to the present range of between $90 and $200, Colliers reported.

"The general outlook for the hotel sector is not encouraging in the short term, particularly for the five-star hotel. Four- star and three-star hotels are also likely to experience pressure in the face of increased competition with the excess of 500 rooms due this year," Colliers said.

A number of star-rated hotels are under construction in Jakarta. New hotel projects scheduled to open in the near future include the Athlete's Village, Hotel Cempaka Mayor, Cipta Panghegar Heritage Hotel, Conrad Jakarta, Grand Mercure Mahakam, Mitra Matraman, Hotel Mitra Oasis, Moevenpick Hotel, Marco Polo Hotel, Kempiski Jakarta, Plaza Modern, Plaza Pasifik, Rekso International and Santika Nusa Jaya. (icn)