Agung Podomoro Land, one of Indonesia’s largest property developers, has signed an agreement with hotel operator Accor International to build four new hotels — three in Java and one in Bali — to take advantage of the growing tourism industry.
APL plans to invest Rp 2.1 trillion ($217 million) in the hotels, which later will be operated by French hotel operator Accor, APL vice president Indra Wijaya told reporters in Jakarta on Thursday.
APL will build the Sofitel Hotel in Nusa Dua Bali, the Pullman Hotel in Ciawi, the Pullman Hotel in Bandung and the Mercure Hotel in Kelapa Gading, North Jakarta.
The Sofitel in Nusa Dua was previously set to be managed by JW Marriot, but because of difficulties, APL turned to Accor, Indra said. The hotel will cover 7.8 hectares and will have the only beachfront ballroom in Bali. Indra said Sofitel — the luxury hotel brand in Accor’s portfolio — is scheduled to open next year and will host the APEC Summit in October 2013.
Indra said the four new hotels will boost APL’s hotel rooms by 1,200 units and are expected to help the company increase the contribution of recurring income to 30 percent of total revenue by 2015.
Last year, recurring income at the company — which mostly came from malls and hotel operations — stood at 9.8 percent of total revenue.
“APL is committed to strengthening our recurring income, which will act as a steady income source,” said Trihatma Kusuma Haliman, president and chief executive of APL. He said recurring income was important as a buffer when the property market weakens.
“By 2015, hotel operation will contribute half of the total recurring income,” Indra said, adding that the company will continue to add hotels.
Accor’s operation in Indonesia has been excellent and is expected to continue, said Gerard Guillouet, senior vice president of Accor Malaysia-Indonesia-Singapore. The occupancy rate at Accor hotels in Indonesia averages 85 percent, he said.
“All this time when people think about Indonesia, they only talk about Bali, but Indonesia’s potential is much bigger than that,” Guillouet said. “In the future, Bali will only [contribute] 5 percent of Indonesia’s [tourism industry].”
Accor now operates 51 hotels and is aiming to operate 100 hotels by 2015.
Indonesia’s tourism industry is expected to grow by 8.6 percent this year, outpacing the estimated global growth at 5 percent, said Indra, citing Tourism Minister Mari Elka Pangestu.