Bandung mayor told to limit new hotels

Yuli Tri Suwarni, The Jakarta Post, Bandung | Sat, 12/13/2008 11:20 AM  

The Bandung chapter of the Indonesian Hotel and Restaurant Association (PHRI) has called on the mayor to limit permits for new hotels to create a more competitive climate. 

Currently hotel operators have to struggle with 1,500 empty rooms on weekdays on average. 

Edi Rachmat, the Bandung PHRI chair, said the idea to limit licenses for new hotels had been repeatedly discussed during coordination meetings with the mayor and other officials handling the issue. 

According to data from Bandung's tourism agency, 10 new hotels with at least 2,410 additional rooms have sprung up and the Bandung Spatial Planning and Housing Agency has issued licenses for another 22. 

Bandung has currently 252 registered hotels, both unstarred and rated, with 10,442 rooms. 

"Right now we are all competing on quality and service. But we're afraid if no limits are set, hotels in Bandung will start waging a price war," Edi said. 

"We hope it won't come to that. If it does, it means hotel operators are facing unhealthy competition." 

Edi was speaking on the sidelines of the grand opening of Aston Tropicana Hotel on Jl. Cihampelas on Wednesday. 

Bandung Mayor Dada Rosada, Vice Mayor Ayi Vivananda and Aston International president and CEO Charles Brookfield were also present at the ceremony. 

Responding to the issue, Dada said the city still needed investors to construct new hotels because occupancy was down to between only 35 and 50 percent during weekdays. 

However, he added, during weekends Bandung hotels enjoyed high occupancy rates of generally 85 percent and often enough 100 percent. 

"Some hotels are even forced to turn guests away because they are fully booked," he said. 

"We will examine why some hotels suffer from low occupancy. It could be they are failing to draw in customers to stay there." 

The hotel business, Dada said, had contributed significantly to Bandung's revenue. He estimated the city revenue this year increased to Rp 60.2 billion (US5.73 million) up from Rp 51.85 billion last year. 

Tourism data records that 38,406 foreign and 457,901 Indonesian guests visited Bandung this year. 

Brookfield said Bandung's hotel industry still had good prospects, in part due to the many Jakartans who have made Bandung a weekend habit. 

He said the Aston Tropicana was Aston International's second four-star hotel in Bandung. Aston International has operated Aston Hotel and Residence on Jl. Braga for the past two years. 

The group plans to open a third hotel, Aston City Hotel on Jl. Pasteur, with a soft launch planned in March. 

"Many new hotels are coming into Bandung. With the financial situation, maybe they will delay their opening until May 2009. But Aston will still do very well and we expect more than 80 percent occupancy in the coming year," said Brookfield. 

He also said Aston enjoyed an average of 85 percent occupancy each month, with 95 to 100 percent of rooms booked during weekends.