State-owned Patra Jasa Bali Spa and Resort in Kuta, Bali. (B1 Photo/Mohammad Defrizal)

State-Owned Hotel Chain to Challenge Foreign Hotels' Domination


SEPTEMBER 29, 2016

Jakarta. The government on Wednesday (28/09) launched the Hotel Indonesia Group — a network of hotels controlled by state-owned enterprises, marking a first step to consolidate all government-owned hotels into a holding company, State-Owned Enterprises Minister Rini Soemarno said.

Indonesia's state-owned enterprises (SOEs) — from flag carrier Garuda Indonesia to energy firm Pertamina — often operate hotel businesses of their own, a practice which started with having to provide places to stay for their employees and business partners on the road decades ago when hotel chains were still scarce. Many of these hotels subsequently grew into proper money-making business units.

"We're synergizing our hotels to improve the quality of their services. In the end, we want to create a state-owned hotel chain," minister Rini Soemarno told reporters on Wednesday.

The Hotel Indonesia Group was first established in February, combining three state-owned companies which operate 26 hotels in total, comprising state-owned hotel operator Hotel Indonesia Natour (12 hotels); state-owned energy company Pertamina's hospitality unit Patra Jasa (7 hotels) and national flag carrier Garuda Indonesia's hospitality and catering operator Aero Wisata (7 hotels).

At least 10 hotels from two more state-owned companies officially joined the group on Wednesday, nine of them belonging to state-owned pawnbroker Pegadaian and one belonging to state-owned temple operator Taman Wisata Candi.

Consolidating these 36 hotels will be the government's first step to create a state-owned hotel holding company, which in turn will manage a national hotel chain to compete with foreign hotel groups in Indonesia.

Rini said the government plans to appoint Hotel Indonesia Natour as the holding company for these state-owned hotels.

She said the most important stage in this consolidation effort will be to make sure all the hotel rooms, services and food and beverages meet international standards.

During the launch, the new hotel group also signed a memorandum of understanding with 16 state-owned companies, which now will supply utilities, food and beverages, electricity and other basic needs for the hotels in the group.

The 16 state-owned companies include Indonesia's oldest department store Sarinah, state procurement agency Bulog, state-run gas distributor Perusahaan Gas Negara, industrial conglomerate Rajawali Nusantara Indonesia and plantation company Perkebunan Nusantara PTPN III.

The group already has its own website, where customers can make room bookings at any of the 36 hotels, which ranged from two-star to five-star hotels.

Hotel Indonesia Natour chief executive Iswandi Said encouraged other state-owned hospitality unit operators to join the consolidated group. At least 97 hotels belonging to 118 state-owned companies are expected to join the group.

"We want to offer alternatives to foreign hotel chains in Indonesia," Iswandi told reporters last week.