THE branded economy hotel sector, which is already thriving in Indonesia, is now attracting more middle and high-income travellers.

Speaking at the 4th annual Economy Hotels World Asia yesterday, Aston International’s vice president of sales and marketing, Norbert Vas, pointed out that Indonesia’s emerging middle class is driving the growth of economy hotels in the country.

He said: “(Indonesians) are choosing budget hotels because they simply do not see the need to spend too much on a hotel. The hotel experience is not as crucial to Indonesians as compared to Western markets such as Europe.”

Said Marc Steinmeyer, president director of Tauzia Hotel Management: “Economy and budget hotels don’t necessarily attract the low end of the market. Individuals who chose to stay in economy properties still desire quality but at the right price and location.

“Indonesians and Asians in general are highly brand-minded. (They) are averse to risk, preferring the reliability of known and established brands,” he added.

Apart from a flourishing economy and the ease of obtaining financing, the strong demand for branded budget accommodation is also fuelling development outside Jakarta and other major cities, hoteliers pointed out.

“We intend to open hotels wherever Garuda (Indonesia) flies to. However, we would advise developers not to open hotels in Semarang or Solo, where our hotels are struggling. Lombok – which has been touted as the next Bali for the last 15 years – is finally making headway, and it is where it would be sensible to invest (in) next,” said Aston’s Vas.

For Adwien Dhanu, president, Jayakarta Hotels & Resorts, Kamarang in Jawa Barat is a key market due to growing foreign investment and the existence of a big industrial estate, while South Kalimantan’s Banjanmarsin is another key market due to its upcoming airport expansion that will improve its regional connections.

INDONESIA-BASED property developer Surya Semesta Internusa (SSIA), the owner of Gran Melia hotels, is set to make its foray into the economy segment when its first BatiQa hotel opens in 2013.

According to Sami Miettinen, Surya Internusa Hotels managing director, SSIA aims to launch 35 to 40 budget hotels across the country within the next five years.

“Each hotel will have 100 to 125 rooms, a single F&B outlet as well as meeting rooms,” he said. Rates are expected to range from US$40 to US$50 a night, placing it at the higher end of the budget spectrum.

BatiQa will be targeted primarily at domestic business travellers, added Miettinen. “We will leverage on our close ties with the local industry to fill rooms.”

Despite the immense potential of the budget hotel segment in Indonesia, Miettinen conceded that operators still face numerous challenges. “Competition is rife with both local and international players trying to enter this space. In addition, it is difficult to ensure service consistency given the geographic spread of Indonesia. It’s easy to build a hotel, but difficult to stay ahead of the game.”

Five hotels have begun construction in Jakarta, Palembang in South Sumatra, Pekanbaru in Riau, Karawang in West Java and Surabaya in East Java. These five properties are slated to open in 2013.

SSIA is currently awaiting approval from the government to develop budget hotels in Yogyakarta and Makassar.

TO drive greater sales volume, Orient-Express is rolling out higher travel consultants’ commission across the world next year.

Speaking at the presentation of its 2013 Myanmar programme yesterday, Marco Rosa, Orient-Express global sales & marketing director, trains & cruises, revealed that commission rates for travel consultants will be raised from the current eight per cent to 10 per cent next year for its cruise and train bookings.

When enquired about the reason for the revision, Rosa replied: “It’s more like an incentive for travel (consultants) to sell our products. We thought that eight per cent is maybe, on some occasions, below the industry standards while ten per cent is more reasonable.”

Consultants making bookings now for departures in 2013 will also get to enjoy the higher commission rates, he added.

Boosted by the growing demand in South-east Asia, Orient-Express is sharpening its focus in the region with the launch of a new river boat as well as several new appointments.

Said Rosa: “Both our Myanmar cruises and Eastern & Oriental Express products are doing extremely well over the last few years. The South-east Asian markets are performing quite well, and they are also attracting quite a lot of clients from the other markets like the UK, the US and Australia.”

Earlier this week, Orient-Express has just appointed Eddie Teh in the newly created position of general manager of Myanmar cruises, while a new Bangkok-based sales director for trains & cruises will come on board on October 1 to handle the South-east Asia market.

At the presentation attended by travel consultants, Orient-Express also unveiled its newest cruise product, Orcaella, a 25-cabin luxury boat (TTG Asia e-Daily, September 5, 2012) that will begin sailing along Myanmar’s Irrawaddy and Chindwin rivers in July 2013.

GARUDA Indonesia will begin including passenger service charge (PSC) in its air tickets from September 28, with a transitional period of 12 months.

Garuda’s vice president communications Pujobroto told The Jakarta Post that the flag carrier will be the first Indonesian airline to integrate PSC into its tickets. At present, the departure taxes need to be paid in cash and in person at Indonesian airports.

Garuda executive vice president marketing and sales, Elisa Lumbantoruan, revealed that the carrier has begun preparations, including opening an escrow account that it will manage together with state-owned airport operator, Angkasa Pura. The airport authorities will continue to collect the PSC for tickets issued before the policy announcement, he added.

Meanwhile, Sriwijaya Air has announced plans to launch a new full-service carrier, Nam Air, next year. Following Pacific Royale Airways and Lion Air’s new subsidiary, Batik Air, Sriwijaya Air will be the third Indonesian carrier to venture into the full-service market, which is currently dominated by Garuda.

According to Sriwijaya Air president director Chandra Lie, the airline is still waiting for the authorities to issue the flight permit for Nam Air, but he hopes that the subsidiary will begin operations in 2013.

MYANMAR’S Ministry of Hotels & Tourism has banned foreign tourists from visiting several attractions sites in Rakhine and Shan States until further notice due to instability caused by ethnic clashes.

Banned sites include Sittwe, Mrauk U, Vesali and Mahamuni Pagoda in Rakhine State and Mong La in Shan State, according to a spokesperson from the ministry.

Other off-limits areas include all of Kachin State, as well as Mogok and Nay Pyi Taw – including nearby townships of Pyinmana, Lewe and Tatkon – in the Mandalay Region.

“We have restricted access to these areas due to the current situation. I am sure we will allow the tourists (to visit) very soon,” the spokesperson said.

THE Maldives continues to attract international hospitality brands and innovative developments, with Louis Vuitton becoming the latest addition to its burgeoning list of luxury resorts.

Speaking to TTG Asia e-Daily, Maleeh Jamal, deputy minister of tourism, arts and culture, confirmed that Louis Vuitton would debut a 46-villa resort in the Maldives in 2013. The property is now under construction on the island of Randheli in Noonu Atoll.

“Maldives has (also) become the birthplace of tourism innovation,” Jamal said, noting the host of unique attractions in the country’s tourism landscape.

On September 7, the world’s first underwater club, Subsix, opened at the Niyama Maldives. Next in the pipeline is an ambitious floating-island development – including an 18-hole golf course, residences, villas, a hotel and a convention centre – that is being built by Dutch Docklands.

GLOBAL Premium Hotels, the operator of Fragrance Hotels, the second largest budget hotel chain in Singapore, is setting its sights on opening its first properties outside Singapore and has plans to open 200 to 300 rooms per annum, either in the city state or abroad.

“We have not firmed up plans as we are still at the evaluation stage, but we are open to expanding to regional destinations including Malaysia, Indonesia and potentially Myanmar and Vietnam,” said Eddie Lim, CEO, Global Premium Hotels, which had recently secured funds totalling S$292 million (US$236.53) on the back of its IPO in April.

Lim said that the group was keen to export both its economy Fragrance and midscale Parc Sovereign brands abroad.

He said: “At the moment, we are looking at various ownership models including joint ventures, acquisitions and management contracts to grow our portfolio regionally.”

Despite the group’s foreign ambitions, Lim insisted that the group remained firmly focused on Singapore, which he believes still offers ample opportunities.

“With 17 million arrivals forecast for 2015, and with the hotel supply rate anticipated to lag behind this growth, there’s still a lot of room for economy and mid-tier hotels to make their mark in Singapore. Global Premium Hotels has an advantage in this respect owing to the intimate knowledge we have of the (Singapore) market,” said Lim.

A second Parc Sovereign, which will have around 270 rooms, is due to open in Singapore by end-2014 in the Lavender district.