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Here to Stay !

Akhyari Hananto
Akhyari Hananto
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Here to Stay !

Fueled by steady economic growth exceeding 6% annually, the rise of Indonesia’s middle class and its impact on the hotel landscape were prominent themes at Travel Trends’ No Vacancy conference in Bangkok last week.

Of the 248 million people in Indonesia, 50 million, or approximately 20%, are middle class, said Sonia Kapoor, client service director for Nielsen Singapore. That group has between $4 and $20 each day to save or spend on leisure activities and will comprise 50% of the population by 2030, she said.

The number of new hotels being built or in the pipeline is unknown. The breakdown of travelers also is hazy, but Scott Blume, group CEO of PT Raja Kumar International, provided an estimate: “At least 25% is probably business travel and the travelers are staying in the 3- to 3-and-a-half-star range hotels. That’s 400,000 to 500,000 rupiah, or about $40.”

In Bali, where InterContinental Hotels Group operates two hotels, only 35% of guests are Indonesians, but at its 10 additional hotels in the country, 95% is domestic, said Mark Flower, IHG’s commercial director for Southeast Asia.

Baca Juga

3- and 4-stars prevail David G.A. Perry, GM of the Gran Melia Jakarta, said budget accommodation is the fastest growing segment and is driven by domestic travelers. But higher-priced accommodation also is flourishing, he said during a telephone interview.

“The good news is that as all the 3- and 4-star hotels fill, the 5-star hotels are able to get better rates,” he said. “The Indonesian who has flown here from Medan on a $10 flight isn’t going to stay in a 5-star. But to the international traveler who has spent $600 on a flight, $230 a night seems like a good deal.”

Perry said the region’s economy has been pushed along by investment in industrial, mining, automobiles and motorbike manufacturing.

“Honda has its biggest motorbike factory here. So much corporate travel is associated with it. I think for Singapore Airlines, the Singapore-Jakarta route is its busiest and nearly all planes are wide-bodied. There’s a (Boeing) 737 every half-hour and a 777 every 15 minutes.”

In 2011, the number of international arrivals to Indonesia increased by approximately 9% for a total of 7.6 million, according to John Koldowski, special strategic advisor to the Pacific Asia Travel Association. There were 5.5 million foreign visitors in 2007.

Digging into development The 15-year-old Gran Melia has been undergoing a total overhaul of its 400 rooms and public areas during the past year. “By the end of the year, we’ll be firmly in the truly 5-star category,” GM Perry said. Most of the guests are from Southeast Asia and northern Asia.

Spanish-owned Melia Hotels International, which operates two Bali hotels, will soon announce plans for three additional Indonesia hotels in the 4- to 5-star range, he said. One will be in the secondary Java city of Surabaya. Perry said that he expects double-digit revenue-per-available-room growth for his hotel in the next few years.

For May 2012, STR Global, sister company of HotelNewsNow.com, found that overall RevPAR in Indonesia was equivalent to $71.63, compared to $66.68 in May 2011. Occupancy in May was 67.9%, up slightly from 67.2% the year before. The average daily room rate crept up more significantly, from $99 to $105.

IHG will soon open Holiday Inn Express hotels in Bali, Surabaya and Jakarta, Flower said. Earlier this year, the brand was launched in Southeast Asia with three outlets in Thailand.

Accor is another group which has been busy in Indonesia. It has opened a dozen hotels in Indonesia during the past 18 months, making a total of 62, according to an Indonesia spokesman for the French hotel group. The new hotels include two Pullman hotels in Jakarta. But there were also five in the Ibis and Ibis Styles economy brands. Four more hotels will open by the end of the year, including two of the mid-market Mercure properties in Jakarta.

Mark van Ogtrop, Southeast Asian director of Golden Tulip Hospitality, said at last year’s No Vacancy meeting the Dutch hotel group planned to open 20 hotels at the 2-star level in secondary Indonesian cities.

Catering to the Indonesian traveler While Indonesians are eager to travel, marketing methods that succeed in other Asian countries don’t always transfer. Indonesia’s per capita income of $3,500 last year was $1,000 more than that of the Philippines, yet Nielsen surveys found that, while 42% of Filipino Internet users (and almost 70% of Singaporeans) booked or bought travel items online last year, only 6% of Indonesians did.

Mobile ownership is “virtually universal” among Indonesian adults, said Kapoor, and Indonesians are far more likely to access the Internet by their mobile phones than Filipinos, Malaysians, Singaporeans and Thais.

Yet Indonesians rarely spend their online time sending email or reading comments about products as their counterparts do. Indonesians spend virtually all their time sending text messages, browsing others’ online profiles or interacting on social networks; 90% of Indonesian digital users have an active Facebook profile.

When PT Raja’s Blume moved from Singapore’s Zuji-Travelocity to Jakarta a few years ago, he quickly concluded that a similar seamless online system to booking a room and travel “will never work” in Indonesia. Not only do the few credit cards owned by Indonesians have payment limits of a few hundred dollars, but novice Indonesian travelers require some human interaction when booking.

Visitors can’t even book online on RKI’s RajaKumar.com. The site, which is in the Bahasa Indonesia language, contains content on shopping, activities and restaurants as well as hotels in cities and towns throughout the sprawling archipelago. When customers want to make a reservation, they phone RajaKumar’s call center, provide their banking particulars and then call their own bank to confirm the sale.

The process sounds cumbersome but is fast and well-established in Indonesia, Blume insists. “It also cuts down on fees to other facilities.”

Global online-travel agencies, catering to inbound traffic, include many hotels in both Jakarta and Bali but don’t list hotels in the secondary cities of the archipelago.

RKI’s MG Holiday, a business-to-business company linking Indonesian hotels throughout the country with tour companies and travel agencies, attempts to better represent Indonesia’s hotel offerings with listings in remote Papua and Sumatra. The bulk, however, is in 10 cities.

The platform eschews major OTAs, Blume said.

“We sold over 700,000 room nights in the past year with an (average daily rate) a little under $80 per night. We also sell a massive number of 3- and 3-and-a-half star hotels.”

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TENTANG AKHYARI HANANTO

I began my career in the banking industry in 1997, and stayed approx 6 years in it. This industry boost his knowledge about the economic condition in Indonesia, both macro and micro, and how to unders ... Lihat Profil Lengkap

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