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rovincial, regental and city administrations in West Sumatra have been urged to issue standard operating procedures (SOPs) on the use of hotel facilities for government meetings to prevent hotel staff dismissals.

The call was conveyed by the West Sumatra Association of Hotels and Restaurants (PHRI) in response to Administrative and Bureaucratic Reform Minister Regulation No. 6/2015 issued on April 1 on state meeting limitations outside the office.

'€œWe hope regional administrations will move fast because the impacts of the Nov. 17, 2014 ministerial circular were serious,'€ the PHRI'€™s Maulana told The Jakarta Post on Tuesday, referring to a previous ministerial circular banning civil servants from conducting meetings in hotels. It has since been canceled.

After the circular was issued, Maulana said, star-rated hotels in West Sumatra had laid off people, especially in cities with the highest number of hotels such as Padang and Bukittinggi, which respectively had let 20 to 40 percent of their employees go. He added that the direct impact of the circular was the cancellation of 60 events in 15 hotels in Padang and Bukittinggi, causing combined financial losses of Rp 5.18 billion (US$400,546).

Government meetings, according to Maulana, had been the biggest contribution to hotel revenue in West Sumatra.

Quoting PHRI data, Maulana said that in 2013, government meetings contributed up to 65 percent of 20 star-rated hotels'€™ revenues in Padang and Bukittinggi. The remaining 35 percent came from rooms, corporations and other sources.

He said that for the 20 hotels alone, potential losses caused by the circular amounted to Rp 15 billion monthly, including the 10 percent service charge or Rp 1.5 billion (for employees) and 11 percent tax or Rp 1.65 billion for regional administrations.

Hotels in the province hire many workers. Padang'€™s 82 hotels employ 5,680 people or 0.66 percent of the city'€™s population. Bukittinggi'€™s 60 hotels employ 3,648 workers or 3.09 percent of its population.

At the provincial level, the 312 hotels in the region employ 14,486 people or 0.30 percent of the province'€™s population of 4.4 million.

This, according to Maulana, excluded the impacts the circular had on hotel-related businesses run by micro, small and medium enterprises, especially those supplying hotels.

The circular, he added, could have a effect similar to that of the major 2009 earthquake in Padang, when 11 new star-rated hotels with an estimated combined investment of Rp 770 billion ended up with bad loans totaling Rp 385 billion, or 50 percent of the total.

He added that it was an open secret that markups and fictitious receipts were commonplace at a number of hotels. In this case, he said, the PHRI would monitor all members to ensure that fair business practices were upheld.

'€œViolators will be sanctioned by banning the respective hotels from accommodating government events,'€ said Maulana, adding that the government also had to ensure that its employees acted with the same integrity.

Separately, West Sumatra Tourism Agency head Burhasman said his office had been working on SOPs that would regulate the use of hotels by the provincial administration.

'€œHopefully, we will issue them in May,'€ he said.

The SOPs will regulate activities at the provincial administration level. At the regency/city level, he said, it was up to the respective administrations.

He also expressed hope that the SOPs and minister regulation would resolve the problem.