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Government says hotels may open. Hotels prefer to stay closed

Jakarta Post - June 19, 2020

Mardika Parama, Jakarta – Hotels in Indonesia are likely to remain closed throughout June, with operations to resume in July at the earliest, a hotelier association has said, citing concerns about low demand amid consumer fears over the COVID-19 pandemic.

Demand for accommodation is projected to still be low this month, especially with the enforcement of large-scale social restrictions (PSBB) in several regions, according to Indonesian Hotel and Restaurant Association (PHRI) chairman Hariyadi Sukamdani.

"Most hotel owners have decided to still halt operations throughout the month. Maybe we'll start reopening our doors in July. We could suffer additional losses if we forced ourselves to open with low occupancy rates," Hariyadi said during a press conference held by booking platform Tiket.com on Wednesday.

With the cashflow disruption due to the pandemic, hotel owners will try to save capital on operational costs and think twice about welcoming back guests, he added.

The pandemic has severely battered tourism in Indonesia as people stay at home to contain the virus spread, with more than 42,000 cases to date. Foreign tourist visits to Indonesia have plunged 87.44 percent year-on-year (yoy) to 160,000 visitors in April, the lowest in recent history.

According to the PHRI, 1,642 hotels and 353 restaurants have shut their businesses as of late April due to low occupancy rates. The association's data also show that 180 tourist destinations and 232 tourist villages across Indonesia are temporarily closed.

Hariyadi said all stakeholders must work together to improve public confidence in their safety, as the fear of COVID-19 infection could deter people from visiting hotels.

"A lot of people has asked me, 'when will we return to normalcy?' and my answer is, when our consumers regain their confidence in traveling," he said.

Despite the concerns, a recent study by travel website Tripadvisor found that 68 percent of customers surveyed were considering travel plans. Searches for hotels in Indonesia on the website increased 5.4 percent year-on-year (yoy) between March 29 and May 31.

Hotels in large cities have also started to see their occupancy rates increase following the government's decision to ease the PSBB measures in its bid to reopen the economy.

Hotel chain Artotel Group chief operating officer Eduard Rudolf Pangkerego said the company had decided to open four of its properties in Jakarta and had seen an increase in occupancy at their hotel in South Jakarta.

There are 19 properties under Artotel's management, according to the company's website, six of which are located in the Indonesian capital.

"Our South Jakarta hotel occupancy rate has reached around 30 to 40 percent. Our competitors are also reporting similar results as businesses resume operation," Eduard said during the conference.

While hotel accommodation demand from the leisure market segment is still under pressure, Eduard said demand from the business segment was starting to pick up.

"The situation remains difficult for our properties that are located on other islands [outside of Java], such as in Bali and North Sumatra, but we see demand from the business segment is increasing," he said.

In an effort to boost consumer confidence in the hospitality industry, Tiket.com on Wednesday launched a "clean" label for hotels that have implemented strict health and sanitation protocol.

"We believe that our customers currently need assurance on their health safety, and we help them with our 'clean' feature. This is a feature that could convince them to travel with peace of mind," the company's cofounder and chief marketing officer Gaery Undarsa said.

Around 4,000 hotels both in Indonesia and abroad have registered for the "clean" label, of which 80 percent are domestic hotels.

Source: https://www.thejakartapost.com/news/2020/06/19/govt-says-hotels-may-open-hotels-prefer-to-stay-closed.html