Indonesia has long been a honey pot for both international and domestic hotel chains as the vast archipelago provides a myriad of opportunities for them to grow.
The game, however, is set to change with the ASEAN Economic Community implementation set for 2015.
Southeast Asia’s economic integration, also known as ASEAN single market, has driven several domestic players to embark on an expansion into the Southeast Asian market.
Recently, Santika Indonesia Hotels & Resorts opened its first overseas property under its budget brand Amaris at Middle Road, near the Bugis Junction — one of Asia’s premier destinations in Singapore.
The 38-room Amaris Hotel Bugis is just a short walk from Suntec City Mall, as well as the iconic Raffles Hotel and the Kwan Im Temple.
“Southeast Asia is a healthy market, including in the hospitality sector, because nowadays people from one country tend to travel more to other countries within the region, making an expansion into this area a promising business,” Santika marketing communication manager Vivi Herlambang told The Jakarta Post, adding that the hotel provides breakfast, WiFi and safe deposit box in each room.
“We picked Singapore for our first project because the number of Indonesian tourists visiting this destination is huge. But, we also welcome guests from any nationality who want a convenient stay at an affordable price during their trip to Singapore.”
According to recent data issued by Bank Indonesia, 60 percent of 2 million Indonesian travelers visited Singapore and Malaysia in the first quarter of this year.
Meanwhile, the Tourism and Creative Economy Ministry information center data shows the number of Singaporean tourists to Indonesia reached 395,756 from January to April 2013, a 4.4 percent increase from the same period last year.
Vivi said the firm is currently looking for new locations across the Southeast Asia region and Australia, where they could establish their other brands, such as Santika, Santika Premiere, Kayana or Samaya.
Santika is planning to open one more overseas property before 2015, she added.
As of today, the group is running 54 hotels, from budget to luxury portfolios, with an estimated inventory of 5,900 rooms in the country and Singapore.
The second player that wants to tap into the ASEAN market of 600 million people is the Tauzia Hotel Management, which operates four-star accommodation under the Harris brand and budget hotels under POP! Hotel with a 3,746-room inventory in major cities like Jakarta, Bandung, Yogyakarta and Denpasar.
Tauzia president director Marc Steinmeyer said it was the right time to establish a strong foothold in the Southeast Asian region because the economy and tourism industry is growing.
“I really believe in ASEAN because it is a growing market and the people are traveling more, thanks to AirAsia and other low cost carriers that enable the ASEAN people to get to know each other. We are looking at Malaysia, the Philippines and Vietnam at the moment,” Marc told the Post.
He refused to disclose when they would expand their property, but he said the company planned to take the Harris brand for their first overseas project.
“Harris is a competitive brand that was introduced in Indonesia and we would be proud to see Harris in cities like Kuala Lumpur or Hanoi in the near future,” he said. Marc also said that the management is eyeing the Myanmar market, which is quite different from other countries in ASEAN.
In addition, one domestic player that is strong in the Sumatran market and has recently opened a hotel in Java, Zuri Hotel Management, is planning to spread its wings overseas in 2015.
“Our vision is to become a global contemporary brand that is not only recognized in Indonesia but also in the international arena. We want to capture the ASEAN market after making a strong presence in the country by the end of 2014,” sales director Handik Widodo said.
The firm is operating 14 hotels, ranging from budget to upscale, under its Grand Zuri, Zuri Express and The Premiere brands and has eight new properties under development.
The new hotels will be opened in Jakarta; Kuta in Bali; Muara Enim and Palembang, South Sumatra; and Yogyakarta this year.