Artotel Group has acquired a majority stake in Dafam Hotel Management (DHM), which owns and operates 24 hotels in Indonesia with a total of 2,507 rooms.
With the acquisition, Artotel Group now manages 50 hotels with a total inventory of 5,000 rooms in 24 cities across Indonesia.
The announcement made in Jakarta on Tuesday (December 7) came barely three months after the group took over the Indonesia franchise of Kyriad, a hospitality brand created by France-based Louvre Hotels Group, which manages 11 hotels across Indonesia.
The feasibility of the acquisitions has been realised through the completion of an undisclosed Series B round financing by Indies Capital Partners, a leading South-east Asian alternative asset manager.
The group has also obtained Series B funding by Benson Capital, an angel investor focused on creative industries.
Prior to the rounding of Series B, Artotel Group managed to get the investment injected from Series A by Intudo Ventures, an independent venture company.
Erastus Radjimin, founder and CEO of Artotel Group, said: “The global pandemic has unfavourably impacted the hospitality industry’s performance across the world but we believe that every pandemic opens new opportunities.
“We did not want to passively wait for the pandemic to end, so we took the initiative to acquire properties from Dafam Hotel Management and Kyriad Hotel Indonesia to further our dream of creating a unified hospitality ecosystem in Indonesia that can help hotels support one another in maintaining high standards of service as well as to broaden our market range, be it domestic or overseas.”
Erastus added that Artotel is probably the first Indonesian hospitality company whose growth rate is similar to that of tech companies.
Looking ahead, he projected a brighter 2022 for the tourism industry in Indonesia. “We have seen people starting to travel again for both leisure and business,” he said, adding that the group’s performance numbers in 2H2021 have returned to near 2019 levels.
As part of its expansion plan, Artotel Group aims to become a “house of brands” providing a variety of hotels with different positioning and flavours to cater to the different markets.
“We picked DHM because their positioning is different from Artotel to enable us to be in the areas where Artotel cannot fit in, and vice versa,” said Erastus.
The hospitality industry in Indonesia may not be able to compete in selling prices with Singapore or Japan, Erastus said, citing the example of how a 20m2 room in Singapore or Japan can sell up to US$600, while a five-star property in Indonesia goes for US$300-US$400.
“However, size is Indonesia’s competitive advantage. It has huge population, abundance of islands, maritime potentials and resources. All (create) travel (movements). New traffic appears where a new mining site or a new plantation opens. Therefore, we need to have many properties (in different locations),” he said, adding that each location needed different types of hotels.
“Therefore, Kyriad will operate as Kyriad and we will not Artotel-ise Dafam Hotels or Dafam-ise Artotel,” he opined.
Different brand identities are also necessary to cater to different customer preferences, in terms of budget, location, room size and facilities, said Erastus. However, he added, all hotel brands will share the same service technology, loyalty programme and infrastructure that Artotel Group will develop going forward.
The World Tourism Organization (UNWTO) of the United Nations has spoken out against new blanket restrictions on travel imposed by governments around the world in response to the Omicron variant.
The call echoes the concerns raised by UNWTO members during the recent 24th UNWTO General Assembly, where countries from all global regions expressed their solidarity with Southern African states by calling for the immediate lifting of travel bans imposed on specific countries and for freedom of international travel to be upheld.
UNWTO noted the recent declarations of the United Nations secretary-general and the director general of the World Health Organization (WHO) regarding the unfairness and ineffectiveness of blanket travel bans in respect to the countries of Southern Africa.
In light of recent developments, UNWTO has once again reminded countries that the imposition of blanket restrictions on travel is discriminatory, ineffective and contrary to WHO recommendations. Blanket restrictions may also stigmatise countries or whole regions, it said.
During the UNWTO General Assembly, member states and partners, including voices from international organisations and across the private sector, echoed WHO’s advice that travel restrictions should only be imposed as a very last resort in response to changing circumstances.
Furthermore, it was stressed that if restrictions are introduced, they must be proportionate, transparent, and scientifically-based. They must also only be introduced with a full appreciation of what halting international travel would mean for the most vulnerable, including those developing countries and individuals who depend on tourism for their economies and livelihoods.