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roperty developer PT Jakarta Setiabudi Internasional (JSPT), owner of Mercure Convention Center hotel and the Setiabudi Building business complex in Jakarta, is expanding its budget hotel business line with the construction of four new hotels in the capital and in Java.

The new hotels, under the brand POP!, will begin operations by late 2014. They will be located in Kemang, South Jakarta; Pekalongan and Semarang, Central Java; and Yogyakarta.

JSPT has recently begun construction of the 110-room Kemang hotel. The construction process is expected to take one year.

Next month, the publicly listed company will proceed with the construction of another POP! hotel in Yogyakarta, with a capacity of 103 rooms. Meanwhile, the Semarang and Pekalongan hotels, 120 rooms each, will be built in the middle of next year and in August 2013, respectively.

JSPT has allocated Rp 160 billion (US$16.64 million) for the construction of the four hotels, according to JSPT investment and hotel division director L.E. Chandra P. Asali. It will collaborate with Tauzia Hotel Management, operator of Harris hotels, in managing the hotels.

JSPT already operates two budget hotels under the brand Formule 1 in Cikini and Menteng, Central Jakarta. It runs several other hotels under its hotel business division, including Grand Hyatt Bali, Mercure Resort Sanur and Hyatt Regency Yogyakarta.

Besides POP! hotels, the company will also build a five-star boutique hotel in Sanur, Bali, in the third quarter of 2013. According to JSPT vice president director Purwo Hadi Prawiro, the expansion aims at meeting growing demands for hotel accommodation.

“As business continues to grow in Jakarta and other areas, the number of people traveling also increases. In the past few years, we have seen a rise in the number of people interested in staying at budget hotels,” he said in Jakarta on Tuesday.

In the future, the company plans on developing three- and four-star hotels in cities outside Jakarta, such as Makassar. “However, this will probably take longer because finding the right location with the right price is not easy,” he said.

The overall hotel expansion, Purwo added, was also part of the company’s long-term strategy to maintain its recurring income. At the moment, about 75 percent of the company’s revenues are recurring income from its hotel, office and retail divisions. The remaining 25 percent of the figure comes from JSPT’s residential division, which consists of landed housing and apartment segments.

Between January and September 2012, JSPT’s revenues declined by 3.1 percent to Rp 716.32 billion from the same period last year. According to JSPT financial director Merry Lim, the decline in revenues was caused by the renovation process in 120 rooms at the company’s Grand Hyatt Bali hotel this year.

In line with the lower revenues, JSPT’s costs of goods sold and direct expenses declined as well, down 6.6 percent to Rp 204.01 billion. During the first nine months this year, the company saw its net profits fall 8.8 percent to Rp 97 billion, as a result of higher financial expenses and currency exchange losses.

JSPT aimed to achieve a 10 percent increase in revenues to Rp 1.18 trillion by year’s end, Merry said, adding that the increase would be supported by sales in the company’s residential division.

As of September 2012, the company’s total assets stood at Rp 3.2 trillion, while its liabilities and equities reached Rp 1.49 trillion and Rp 1.71 trillion, respectively.