AccorHotels executes massive expansion plans in RI

JAKARTA. AccorHotels, the world’s leading hotel operator, is executing plans to operate 200 hotels by 2020 in Indonesia despite a continued decrease in occupancy rates over the past year.

“We have more than 100 hotels under construction just in Indonesia. It means that the target of achieving 200 hotels in 2020 will be easy to achieve,” Accor Malaysia-Indonesia-Singapore chief operating officer Gerard Guillouet said recently.

AccorHotels, which currently runs 96 hotels in 32 cities across the archipelago, plans to open 20 hotels every year and expand its presence in the country to four more cities over the next few years.

“We will continue to open the hotels in main cities, but we [will] also expand [with] a bit more effort in the eastern part of Indonesia, like Manado and Makassar, and new cities like Medan where we don’t have a presence,” Guillouet explained.

Indonesia saw a 12 percent decrease in hotel occupancy rates and an 8 percent increase in supply during the first quarter of this year compared with the same period in 2014, data from STR Global shows.

“It’s not only in Indonesia. The trend in Indonesia is down, the trend in Malaysia is down a lot, the trend in Singapore is down also,“ Guillouet said. 

“All the indicators around the world are not very good. You see the rupiah depreciation, ringgit depreciation and Singapore dollar depreciation against the US dollar, oil price is down, the growth of the economy is down, the China market is down, also the policy by the government to reduce meetings at hotels, which affected the industry,” he continued.

STR Global also suggested that the steep decline in Indonesia’s hotel occupancy rate was due to the government’s policy that banned state institutions from organizing meetings and events at hotels as part of its efficiency program.

AccorHotels, which was previously known as Accor, recorded a 6 percent decrease in occupancy during the first quarter of this year.

“Definitely there’s a slowdown in the first semester of 2015, but I think after Ramadhan we will see a very strong corporate segment, and the business will be up again,” Guillouet said.

He added that one of the strategies to improve occupancy rates was to strengthen the group’s online presence in the country and also build partnerships with key players such as national banks and national flag carrier Garuda Indonesia as well as its low-cost arm Citilink.

Accor recently signed an agreement with Citilink that allows the airline’s passengers to enjoy exclusive offers and pay for one night only during a two-night stay at Accor hotels.

“The government has to find a way to take care of its expenses which I can understand and also even though it’s affecting the hotel sector, I believe hotels, they have to be more active and innovative in terms of products and going to new segments. Not only counting on the government to bring them business,” Guillouet said. (Nadya Natahadibrata)