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Menteng Heritage falls short of revenue target as occupancy rates plummet
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The Hermitage is a 5-star hotel located in Menteng, Central Jakarta. (Courtesy of www.hermitagejakarta.com/File)
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T Menteng Heritage Realty, which owns The Hermitage, Pomelotel and PT Global Samudra Nusantara (GSN), fell short of achieving its 2020 first-quarter revenue target because of the COVID-19 outbreak.
The company booked Rp 20.58 billion (US$1.32 million) throughout the first three months of the year, Rp 7.57 billion short of the targeted Rp 28.15 billion.
“The shortfall occurred because the hotel business units were not able to realize their targets,” Menteng Heritage Realty president director Christofer Wibisono said in a virtual press conference on Monday.
The Hermitage, a boutique hotel located in Menteng, Central Jakarta, only generated Rp 11.02 billion from a target of Rp 15.8 billion, and Pomelotel, located in South Jakarta, booked Rp 3.9 billion from a target of Rp 6.49 billion.
Despite this, the company’s total revenues were 28.92 percent higher than the Rp 15.95 billion recorded in the same period last year.
Tourism and travel are among the hardest-hit business sectors during the COVID-19 crisis. Like other hotel operators, Menteng Heritage suffered a significant drop in its occupancy rates.
In March, The Hermitage’s occupancy rate averaged 18.6 percent, plummeting from 56.3 percent recorded in January and 49.5 percent in February. Pomelotel, on the other hand, fared slightly better as the hotel had a 39.89 percent occupancy rate in March, down from January’s figure of 42.8 percent and February’s 54.48 percent.
“The COVID-19 epidemic had affected The Hermitage business unit significantly in comparison to Pomelo’s, in entering the second quarter of 2020,” the president director noted.
In light of the large-scale social restrictions (PSBB) or partial lockdown the Jakarta administration enforced to limit the spread of the virus, Menteng Heritage has decided to close down operations at The Hermitage from April 14 until April 30. Christofer said the temporary shutdown could be extended following a recent announcement from the administration to extend the PSBB until May 22.
To limit the economic blow from the fall in visitor numbers, the company initiated a shift in business operations to include food delivery services. Its business unit, Pomelotel, now provides catering to offices that are still open for business during the PSBB; those offices that are considered to be essential businesses by the administration.
“We are hoping for an increase in revenue and possibly covering some of the company’s expenses,” Christofer said, although noting that the extra income would not be able to fully meet the costs of operation.
In 2019, Menteng Heritage allocated Rp 7.9 billion in capital expenditure (capex), which is used to renovate gym facilities, to increase the capacity of its function rooms and restaurants, as well as to prop up its IT system, while the rest of the funds went into its subsidiaries, as reported by Kontan.
This year, the company had yet to disburse capex because “the strategy is cash conservation for 2020,” Christofer explained.
PT Menteng Heritage Realty’s share prices, listed on the IDX with the code HRME, had fallen by 73.86 percent year-to-date, as of last week. Indonesia Stock Exchange had suspended trading of Menteng Heritage shares since April 23 due to the significant cumulative drop. Its share prices closed at Rp 230 on April 22, a deep plunge from its highest price of Rp 1,130 per share booked on Feb. 7.
