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Investment | Joint Ventures
Sahid Hotel Group | Mr Hariyadi Sukamdani
Mr Hariyadi Sukamdani

We are proud to identify ourselves as an Indonesian brand with our own type of hospitality, derived from a philosophy based on our Javanese roots.

Mr Hariyadi Sukamdani, President Director

Sahid Hotels is one of the leading local hotel groups in Indonesia having been founded in 1953. What was the background to the establishment of the group and what can you tell us about the current strategies and projects underway within the company?

Sahid Group was founded in 1953 by my parents and will celebrate its 60th anniversary at the end of 2013. The company began with its first hotel in Solo and the second here in Jakarta. Seeing the potential of the tourism sector in Indonesia, we have a lot of confidence in the future of this market and believe that now is the time to be more aggressive in expanding our business. This applies to all aspects of the group as we are engaged in not only hotels but also office towers, apartments, condotels and soon we will be involved in theme parks.

In Jakarta we are currently building the highest office tower with 132,000 square meters of office space and we also just acquired land in Bintan close to Singapore where we will build a resort on a 52 hectare site. Some of our projects are also being carried out with partners in a joint venture capacity. In addition to property we also manage hotels owned by other parties through our hospitality management arm and currently run 30 hotels with close to 5,000 rooms; a number which is expected to grow to 6,000 by the end of 2013.

We have also re-launched our budget hotel brand which first began in Solo in 1992. Previously, budget hotels were not such a high growth market but now we are placing a lot of focus on this. By 2018 we plan to have 10,000 rooms in the budget hotel category as we currently have four budget hotels.

How do you foresee your property portfolio developing over the medium term?

The hotel properties provide us with recurring income. Other projects such as strata title real estate offer different types of returns so we have to carefully balance these two types of projects. Therefore in terms of composition we will remain focused on developing hotels and strata title properties in addition to condotels which are sold as strata title properties but we continue to manage the project thereby providing recurring income.

While international tourism numbers in Indonesia are growing, the numbers are still low in comparison to regional neighbours such as Malaysia. What more needs to be done to promote Indonesia as an international tourism destination?

I think the country needs better trained human resources to support the tourism industry. We have developed the Sahid Hospitality School for the purpose of developing our resources internally and to create a distinctive character for Sahid Group which represents the best of Indonesian hospitality.

The government is being more active in promoting the country but in comparison to our neighbours we have a lot of catching up to do. Infrastructure is improving in terms of airports and more frequent flights, both of which are helping to support higher tourism numbers.

On the promotion side, I think the government needs to be more targeted in its approach and more strategic.

For example, promotion of Komodo Island as a tourism destination encourages investment in infrastructure and supporting businesses in the area to create new jobs.

Given the high level of competition in the hotel sector in Indonesia from local as well as foreign chains, what makes Sahid Hotels really different?

We are proud to identify ourselves as an Indonesian brand with our own type of hospitality, derived from a philosophy based on our Javanese roots. This can be felt in our architecture and the character of our people.

For our budget hotels for example, we have implemented the philosophy of the eight elements of Javanese leadership, each of which is represented by a different aspect of nature. Other budget hotel brands just look the same and so this is how we differentiate ourselves.

Asian and Indonesian hospitality staff members take more care of people as this is part of our culture and is so deeply engrained in our nature; more so than you see in other markets such as Europe.

Does the group plan to expand regionally and bring the Sahid Hotel brand to international markets?

We are planning on expanding internationally and will focus on Asia first. The ASEAN region is growing faster than anywhere else so this is where we will start. To enter other markets we must provide better quality while still offering value for money and offering something different to the market.

For four and five star hotels, we are looking to make multiuse projects as high end hotels have a longer payback period. So we will combine the hotel with other facilities such as a shopping mall which we have done previously in Bali and so this is an option for international markets.

China is a key market for us as well as investors are strong in capital and the number of Chinese tourists is rising quickly. As such, we are thinking about entering the Chinese market in the medium term.

Given your local and international expansion plans, in what areas would the company be interested in working with international investors and partners?

We welcome potential partners and investors to join us; we are very flexible and there is plenty of room in Indonesia’s tourism industry and there exists an abundance of new opportunities. The investment costs are highly competitive in Indonesia for labour and building materials. Also land prices in many key locations are very competitive for new projects. We believe that the residential sector for foreign property ownership is very promising as changing regulations are enabling foreign investors to purchase properties in major cities such as Jakarta and as such there is a lot of potential there.

For working with new partners we would like to combine our expertise and experience in hospitality as well as our capital and network with theirs to create new and innovative projects.

Global Business Guide Indonesia - 2014

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