H

otel operators breathed a sigh of relief following the government'€™s announcement that it would relax a ban on government meetings or conferences at hotels to boost hotel occupancy rates.

Indonesian Hotel and Restaurant Association (PHRI) executive director Cyprianus Aoer said on Sunday that his association welcomed the government'€™s move as it would help boost occupancy rates, which had decreased since the implementation of the austerity measure.

'€œWe are happy the government has realized that the ban has also affected farmers, fishermen [that supply food to hotels] despite what it claimed as a move that could result in savings of Rp 5.1 trillion [US$394.3 million],'€ he said.

He told The Jakarta Post that the ban relaxation would likely increase occupancy rates in hotels located in remote areas by 10 to 20 percent, where 40 and 50 percent of revenues are sourced from government-related events.

While the ban had not significantly affected big hotel chains in major destinations such as Jakarta, Bali and Yogyakarta, it had dealt a severe blow to occupancy rates at hotels in isolated areas across the country, he said.

'€œHotels, particularly those in remote areas, can survive if the occupancy rate is no less than 50 percent,'€ Cyprianus said, adding that the occupancy rates of many hotels in the areas had dropped to between 30 and 40 percent late last year.

Budget hotels in Bogor, West Java recently laid off a number of employees as they were struggling to stay afloat with such low occupancy rates, he said.

I Nyoman Sarya, the general manager of the Sultan hotel and Residence Jakarta, said that the government'€™s move would bring benefits for both hoteliers and the government.

'€œ[If the main purpose is to save], what is most important is to make sure that hotel bookings by any government body are supervised,'€ he told the Post, adding that hoteliers should also be more innovative and not solely target government institutions as their source of income.

Jakarta Governor Basuki '€œAhok'€ Tjahaja Purnama said, however, that his administration would continue to refrain from using hotels as meeting venues.

'€œWe have large halls, so why should we use hotels?'€ he previously told reporters.

On April 1, Administrative and Bureaucratic Reform Minister Yuddy Chrisnandi issued a ministerial regulation detailing the events or activities that could be conducted at hotels and how the ministry would supervise government-funded events carried out at hotels, revoking a previous ministry circular.

In mid-November last year, the ministry issued a circular that prohibited government bodies from conducting events and meetings at hotels as long as their respective office buildings could accommodate their needs.

The ban has held back most governmental bodies from organizing any events at hotels '€” resulting in hotel occupancy rate slumps nationwide.

The average star-hotel occupancy rate across 27 provinces in December (high season) last year declined to 50.13 percent from 55.91 percent in the same month in 2013, according to data from the Central Statistics Agency (BPS).

The figure was also lower than the occupancy rate in November last year, which had reached 54.45 percent.

PHRI stated earlier that the ban had indeed affected the hotel industry, which along with food and drink supply accounted for 3.1 percent of the country'€™s gross domestic product last year.

Meanwhile, the government claimed that it had saved Rp 5.1 trillion in state expenses since the enforcement of the ban in mid-November to December last year.