Hospitality and F&B players in Jakarta are calling on the government for financial help as Java and Bali begin two-week emergency public activity restrictions (PPKM), which have triggered massive cancellations amid an intense price war that has already dented earnings.
Sutrisno Iwantoro, Indonesia Hotel and Restaurant Association (IHRA) Jakarta chapter chairman, projected that the latest lockdown would result in hotel occupancies dropping from the current 20-40 per cent to an even more dismal 10-15 per cent.
He said this would put even greater pressure on hotels, which have slashed rates by 29 per cent between January and May this year to compete for business. With earnings reduced, operational budgets are stretched.
IHRA hopes the government would offer a 30 to 50 per cent waiver on electricity bills for members, remove the minimum charge requirement for electricity, order discounted rental for restaurants in shopping malls closed during PPKM, ease taxes, and provide cash support for hospitality and F&B employees who are burdened with unpaid leave.
Beside the new list of requests, Sutrisno highlighted that the National Disaster Mitigation Agency has yet to pay out 140 billion rupiah (US$9.7 million) to 14 hotels assigned to the government’s hotel quarantine programme for five months.
The delayed payment has resulted in cash flow problems for affected hotels, he shared.
Rully Rifai, IHRA Jakarta chapter deputy chairman, who oversees restaurant members, added: “With this lockdown, there is nothing we can do but expect the government to help. It is certain that restaurant employees will be sent home first, and if no government assistance is offered soon, the next step could be layoffs.”