Sat, 04 Nov 2000

State hotel operators HII, Natour to merge

JAKARTA (JP): Two state-owned hotel operators, PT Hotel Indonesia International and PT Natour, will be merged into one corporation as part of a consolidation process in anticipation of an initial public offering (IPO) in 2003.

Although, the merger will be finalized early next year, the two hotels have already been put under unified management called Hotel Indonesia Natour (HIN).

HIN marketing director Tjuk Sumarsono said HIN would be retained as the name of the surviving company in the merger but the merged hotel operator would use Indonesia Natour (Inna) Hotel Group as its brand name.

"The hotels under our management will be named, for example, Inna Wisata, Inna Putri Bali, etc.," he said after installing the new general manager of the Hotel Wisata Internasional in Jakarta.

Hotel Indonesia, however, would retain its name as it was synonymous with Jakarta and the country, Tjuk said.

"The roundabout in front of the hotel is even popularly known as Bunderan HI (the Hotel Indonesia roundabout)," Hotel Wisata marketing manager Made Pudjayanti said.

Hotel Indonesia, established in 1962, was the first hotel of international standard in the country.

HIN operates 16 hotels in Sumatra, Java and Bali, including Hotel Indonesia and Hotel Wisata Internasional. It also manages two airport catering services in Yogyakarta and Surabaya, Tjuk explained.

Tjuk said that before the IPO, convertible bonds would be issued and that many foreign investors had expressed interest in the hotel group and were anxious to enter the business.

"Already, three investors have expressed interest in buying our convertible bonds," he said.

The three investors came from the United States and Europe, Tjuk said, but he declined to name them.

"Our president, A.M. Suseto, will soon give more details to the press about the IPO," he said.

The funds to be generated from the issuance of the convertible bonds would allow the group to start expansion projects which had been delayed thus far, Tjuk said, citing among other things the refurbishment of hotel rooms and facilities.

During the worst of the economic crisis in 1998, HIN recorded net earnings of Rp 40 billion, which was an increase of more than 100 percent over 1997, due partly to the sharp fall of the rupiah against the U.S. dollar.

"We charge for our rooms in dollars while our operating costs are in rupiah," he explained.

As of September 2000, HIN had notched up income of Rp 240 billion, a 16 percent increase compared to the same period last year, he said.

Tjuk stressed he was optimistic that the group's target of Rp 20 billion in net earnings would be achieved as the political situation in the country was improving.

He said occupancy rates of the hotels outside of Jakarta were increasing, with an average of 37 percent in Yogyakarta compared to only 30 percent during the crisis, and 70 percent in Bali, up from about 60 percent previously.

Jakarta has yet to see tourists coming back, Tjuk said, adding that hotels in the capital were only about 35 percent occupied.

"Foreigners are still hesitant in coming to the capital, but are more confident about going to other parts of Indonesia," he said. (tnt)