Interview: Garth Simmons, COO AccorHotels for Malaysia, Indonesia and Singapore

What does Indonesia represent now in Southeast Asia for Accorhotels? How is the growth in revenues, number of rooms booked for 2016 and 2017?

Garth Simmons- AccorHotels in Indonesia represents more than 44% of total operating hotels in South East Asia or contributes more than 14% of AccorHotels in Asia Pacific region, with more than 110 hotels in operations across archipelago.

In terms of room occupancy, overall there is a slight increase around 3% from the same period last year; moreover we expect a stable growth in revenue by end of this year with stronger market demand in second semester of the year, especially in some of key markets such as Bali and Jakarta.

 

Could you tell about Accor expansion in Indonesia in 2017 and beyond? Which brands are being developed? Like in Bangkok, is Ibis Style also a priority in brands portfolio?

G.S.- AccorHotels has been in Indonesia for almost 25 years, and has currently the largest portfolio of any hotel company with more than 22,000 rooms. It is because AccorHotels understands about the large potential in Indonesia, with emerging demand coming from domestic travellers and a rising numbers of international arrivals.  According to the Travel and Tourism Competitiveness Index Report, in 2017 Indonesia occupies the 42th position of global competitiveness index (out of 136 countries), jumping by eight points compared to the previous year.

The improvement in tourism services, good value for money as well as robust marketing campaigns deployed by Indonesia’s Ministry of Tourism and supported by President Joko Widodo, contribute greatly to the positive trends of growing international arrivals. Tourism so far increased during the first half of the ear by over 15%.  The tourism industry has become one of the key driving factors of Indonesian economy growth.

Committed to bringing world-class hospitality products and services across Indonesia, AccorHotels sets to manage almost 120 hotels by end of 2017 and the group targets to operate 200 hotels by 2020.  Exceptional luxurious and upscale properties adds significantly to the group profitability, however with an expanding middle class, our mid-scale (Novotel and Mercure) and economy segments (ibis, ibis Styles) have achieved a strong visibility and awareness in Indonesia and contribute to our growing network.

 

Gaps still exist in AccorHotels portfolio in Indonesia with few branded properties in Sumatra and in Kalimantan. Are they any projects for these islands?

G.S.- Infrastructure and accessibility are important points in our development strategy. We established strong presence in major cities, and evaluate the feasibility for expansion into secondary cities. More than half of our hotels are located in key cities, such as Jakarta, Bandung, Surabaya, Yoyakarta as well as Bali Island. However, we also operates 20% of our network in Sumatera (ten hotels), Kalimantan (five hotels), Sulawesi (eight hotels) and plan to operate more than 20 hotels in those islands for the next few years.

 

Do you see a growth in foreign guests or are hotels still extremely dependent of the domestic market? What are AccorHotels main foreign nationalities in your Indonesian properties?

G.S.- Overall, domestic travellers are essential contributors to most hotels in Indonesia. Nevertheless, we see a rise in international guests coming from Australia, Malaysia, Singapore. Like in the rest of Asia, the Chinese market is also growing significantly.

 

Is Indonesia’s hotel market saturated ? Where do you still see scope for growth both by destinations and brands?

G.S.- Based on Indonesia’s Statistic Centre Bureau, there are more than 2,300 star-hotels (more than 233,000 rooms) in Indonesia and it is still growing, with focus of development in Bali and Jakarta. In 2016, Indonesia attracted more than 12 million international visitors with Bali alone representing 41% of all total arrivals.  TripAdvisor recently awarded Bali as “Best Destination” for the 2017 Travelers’ Choice Awards. Bali, Jakarta and other key cities remain key areas for all multi brands hotels development (from luxury to economy).

Following rapid development in Java and Bali, AccorHotels has successfully established its presence in Makassar, East Indonesia largest gateway. We have there four hotels in operations in the city.  We are currently also expanding in Balikpapan in Kalimantan while our current focus is on Sumatra with many future hotels opening in main and secondary destinations such as Belitung, Medan and Bintan.

 

What are the requests of Indonesian guests today when coming to a hotel? How do you adapt to their wishes?

G.S.- There are many touch points that guests consider as important when they stay at the hotel.  Among those essential points are the personalised service, WiFi /internet with high speed connection, and also value for money for middle class segment.

AccorHotels takes guest experience at the heart of its day-to-day operations.  All of our staff members are encouraged to take part in it when carry their job to make customer happy.  WiFi and high speed internet connections are extremely important for our guests in this digital era.  Further, AccorHotels implements technology and digital tools to enrich experience at every stage of the customer journey, from the planning to the accommodation and the post-experience.