The Adonara Group, an Indonesian hotel operator, plans to open 20 new hotels up to the end of 2017. Before the end of this year it will see two new hotels opening its doors. Meanwhile the Adonara Group also seeks business expansion through the purchase of the international brand “Continent Hotel”. Ruben Amor, Chief Executive Officer at the Adonara Group, said the 20 new hotels – all ranging between two and four star hotels – that are planned to be opened up to the end of 2017 will use the Adonara and Continent Hotel brands.
Amor added the Adonara Group will open the 20 new hotels in Bali, Makassar (Sulawesi), Yogyakarta, Bangka (administratively part of Sumatra) and Solo (Central Java). These locations were selected as local demand for hostelry is considered high enough. Moreover, the central government of Indonesia has high hopes for the tourism sector. By expanding the tourism sector the government seeks to reduce the economy’s reliance on exports of raw commodities. By 2019 the government targets to attract 20 million visitors (per year), more than double 9.73 million foreign visitor arrivals in 2015.
With regard to the exact location Adonara aims for provincial capital cities, located nearby airports or industrial estates. Amor said it requires approximately IDR 30 billion (approx. USD $2.3 million) to develop a budget hotel or two-star hotel (with around 100 rooms) in Indonesia. The return of investment (ROI) is estimated at 6 – 7 years. The ROI for four-star hotels is estimated at 8 – 10 years.
E-commerce is becoming an increasingly important part of Adonara’s business. Currently, approximately 30 percent of total room reservations are done online. To support its hotel business the group acquired the Room Today Asia platform.
Up to this year’s 3rd quarter Indonesia’s hotel industry has been bleak. However, Amor sees a rebounding hotel industry in 2017 as Indonesia’s economic growth accelerates, while inflation is expected to remain low, thus boosting domestic investors’ purchasing power.
On its website Adonara describes itself as a hotel operator that manages unique three – five star hotels as well as budget hotels in various locations across Indonesia (Sumatra, Java, Bali, Kalimantan, Sulawesi and Papua).