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Sahid Jaya tries to stay relevant amid tight competition

Fearing losing out to new and attractive hotels mushrooming in the capital city, Hotel Sahid Jaya International is looking to overhaul itself as part of the company’s strategy to revive sales growth this year

The Jakarta Post
Jakarta
Sat, June 25, 2016

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Sahid Jaya tries to stay relevant amid tight competition

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earing losing out to new and attractive hotels mushrooming in the capital city, Hotel Sahid Jaya International is looking to overhaul itself as part of the company’s strategy to revive sales growth this year.

One mission is to transform the once-fashionable Grand Sahid Jaya Hotel Jakarta into a modern and updated establishment. The hotel, known for its long and rich cultural heritage, will continue to undergo the gradual renovation programs that began last year.

The programs include the rejuvenation of mechanical and electrical equipment and upgrading guest rooms and the hotel lobby.

“Last year, we transformed our previous warehouse into a food court called Sahid Food StrEAT,” the company’s president director, Hariyadi B. Sukamdani, said on Thursday, adding that food outlets on the “street” included American hamburger restaurant Johnny Rockets.

The hotel aims to cater to the meetings, incentives, conferences and exhibitions (MICE) sector as well, claiming that the hotel’s strategic location on Jl. Sudirman was suitable for offices, government institutions, embassies, travel agents and political parties to hold events.

The hotel completed the renovation of 29 meeting rooms for this purpose in 2015 and has a total of 551 bedrooms to accommodate guests.

The company has allocated Rp 36 billion (US$2.71 million) for capital expenditure and will begin disbursing the funds in the third quarter of this year for further room renovation, said Lenny Anjayani, the company’s finance director.

Innovations will include implementation of energy-saving methods in all areas, including replacing shower heads with modern ones that use less water and installing new temperature and electricity systems. The efforts are expected to cut costs and improve the company’s overall finances.

In addition to establishing Sahid Food StrEAT, the company also launched the Sahid Sudirman Center office building last year to enhance the appeal of the Sahid city complex. Several buildings were already present in the complex, including the Sahid Sahirman Memorial Hospital and LaSalle College Jakarta.

Hariyadi acknowledged that the company’s business had been severely affected by the government’s decision last year to ban all government officials from holding meetings and conferences at hotels to cut down on costs. The government later revoked the policy, but damage had been done to the hotels, including Grand Sahid Jaya.

Grand Sahid Jaya saw its occupancy rate fall to 46.15 percent in 2015 from 61.05 percent the previous year. As a result, the company’s total revenues dropped 18.5 percent year-on-year (yoy) to Rp 155.6 billion in 2015 as both room and food and beverages segments — the two main contributors to revenues — slumped.

In the end, its net profits plunged almost 99 percent yoy to Rp 150.16 million, with costs unchanged.

Despite last year’s poor performance, the publicly listed company is upbeat that the planned rejuvenation of the hotel will turn things around. It projects Rp 203.84 billion in revenues this year, an increase of 31 percent from 2015.

“Our revenue target is realistic because we certainly have achieved more in the past,” said Hariyadi, citing revenue of Rp 205 billion in 2013.

Meanwhile, in the first quarter, the company reaped 17.4 percent of the revenue target with Rp 35.39 billion. Its bottom line was in the red, with net losses of Rp 4 billion. (win)

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