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Hotels lament cancellations amid budget cuts for govt events
Government belt-tightening by cutting down on official trips is already impacting the hotel industry through a rising number of cancellations, according to a business group.
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Tightening the belt: Finance Minister Sri Mulyani Indrawati delivers a speech during a plenary session at the House of Representatives in Senayan, Jakarta, on May 20. (Antara/Galih Pradipta)
G
overnment belt-tightening by cutting down on official trips has impacted the hotel industry, as reflected in a rising number of cancellations, according to a business group.
Indonesian Hotels and Restaurants Association (PHRI) secretary-general Maulana Yusran said hotels in many areas across the country had already reported cancellations of government events following a recent instruction from the President to cut budgets for official trips.
“From what I’ve heard [about the cancellations], one of the [cases] was in West Java. Recently, I also heard about [the same issue] in Makassar. There are some other reports from other areas,” he said on Sunday, as quoted by Tempo.co.
Finance Minister Sri Mulyani Indrawati issued a circular letter on Nov. 7 that stipulates that all ministries and institutions, such as the Attorney General’s Office and the National Police, must cut spending on official trips by a minimum of 50 percent.
Read also: Prabowo tells ministries to cut budget for trips, ceremonies
The instruction, Maulana explained, would have a significant impact on the hotel industry. He noted that government events typically accounted for 40 to 60 percent of a hotels’ revenue.
He went on to note that the cancellations would affect hotels’ revenue projections, adding that revenue calculations must have included expected reservations from the government.
