ARCHIPELAGO International, formerly known as Aston International, plans to open 41 hotels by the end of this year to bring its total portfolio to more than 100 properties.
Archipelago’s vice president of sales & marketing, Nobert Vas, said: “After a record year of (16) hotel openings, a number of contract signings and amplified owner interest in development in 2012, we are entering 2013 well-positioned for continued growth in both the budget and the upscale segments.”
Half of Archipelago’s new hotels in 2013 will be in the budget segment, while four- and five-star hotels – which accounts for around 60 per cent of the group’s existing properties and more than a third of the pipeline – will remain high priority.
“(A study) showed that the number of people in the Indonesian middle class segment was between 45 and 50 million last year. The number is estimated to increase to 130 million by 2015 with a disposable income of at least Rp25 million (US$2,590) per year,” Vas said.
Coupled with the rosy performance of its hotels across the country, the group has set an ambitious target to operate some 400 properties in the next few years, with up to 50 per cent of them in the budget category.
“The budget or two-star (branded) category in Indonesia is still in its infancy. In the US, you will find a budget hotel at every highway intersection, so there is still huge potential for growth,” Vas remarked.
Jakarta was the best market for budget hotel performance in the group last year, he revealed. “Favehotel Kemang (opened September 2012) has been running at 97 per cent occupancy with an average room rate of Rp405,000, the highest in the category in the country, with gross operating profit (GOP) of 73 per cent. The other Favehotels in Jakarta have been running at high 90s in occupancy with 65 per cent GOP.”
On the other hand, Solo and Semarang were considered soft markets and were the only cities running below 52 per cent occupancy for the group, he added.
