AccorHotels plans to open 17 more hotels across Indonesia next year as part of its long-term program to build at least 200 hotels by 2020.

The chain planned to open one hotel of its upscale brand Pullman in Ciawi, West Java, another of the Novotel brand in Pekanbaru, Riau, as well as an Ibis Styles hotel in Makassar, South Sulawesi, among others, next year, AccorHotels Malaysia-Indonesia vice president development Rio Kondo said in Jakarta on Thursday.

Rio said projects in the pipeline could exceed the initial expectation, which included another 17 hotels to be opened in 2017. '€œWe will keep developing [the hotel chains in Indonesia] by signing new contracts, so the number of hotel openings each year could exceed the target,'€ he said on Thursday.

He provided the example of developments in Jakarta, where AccorHotels had signed off on the development of 19 new hotels to add to its existing 27 hotels in the capital.

The company still sees potential for more hotels in Greater Jakarta, with the massive development of malls as well as housing complexes. '€œIn five to 10 years, AccorHotels could even operate 50 to 100 hotels in Jakarta,'€ he said.

However, the hotel chain is also committed to expanding in the eastern part of Indonesia, as evidenced by the recent opening of its 100th hotel, in Makassar, and this week'€™s groundbreaking of its Pullman brand hotel in Mandalika, West Nusa Tenggara.

'€œWe have three hotels in Manado right now. Palu is a good location. We want to explore. We think there'€™s an opportunity in Papua,'€ AccorHotels COO for Malaysia-Indonesia-Singapore Garth Simmons said.

He added that despite infrastructure challenges in the Indonesian archipelago, he saw a bright future for areas like Lombok, West Nusa Tenggara, and Makassar, which would be turned into the hotel'€™s hub for the eastern part of Indonesia.

The company plans to open at least two more hotels in Makassar next year. Meanwhile, AccorHotels said it expected business to be more stable next year, even though it forecasted only single-digit growth.

'€œI do think there will be some growth, stronger at the start of the year, because 2015 was quite weak, with the impact of the government pullback in spending and some economical uncertainty,'€ Garth said.

The hotel chain'€™s occupancy rate had fallen by as much as 15 percentage points from the average 60 to 80 percent in the first semester of the year compared to last year, according to Rio.

Analysts cite austerity measures as the main reason behind the occupancy drop in Indonesia, as the government temporarily banned official meetings to be held in hotels.

Meanwhile, the hotel also expected to see growth in its luxury segment next year, following the acquisition on Wednesday of luxury hotel management company FRHI Holdings, which oversees hotels like Fairmont and Swissôtel.

AccorHotels will pay for the acquisition by issuing 46.7 million new shares and a cash payment of $840 million.

'€œThe strength of the company is in that luxury segment, which we have the ambition to grow in as well. Currently, we have a growing network in that luxury area, with Sofitel, Pullman and MGallery. This will be a real compliment to what we do,'€ Garth said, adding that the contribution was unknown yet, with only three hotels from the holding currently operating in Indonesia.

So far, the core business of AccorHotels in Indonesia has been its midscale and economy hotels, such as Ibis and Novotel. (fsu)

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