Highlight 2013: Trendy budget hotels boom

According to a recent UN-WTO World Tourism Barometer report, up to 298 million international tourists traveled worldwide in the first four months of 2013, which equals a 4.3 percent increase from the 286 million last year.

The report said that the challenging global economic environment hadn’t perturbed the growth of the industry. Southeast Asia saw a 12 percent increase in international visitors this year.

The global tourism boom has produced new budget hotels that are chic, clean and offer great services.

In Indonesia, the trend started flourishing perhaps three years ago when, according to Archipelago International VP sales and marketing head Nobert Vas. Archipelago International and Santika with its Amaris brand opened internationally branded budget hotels. Since then, word has spread fast and other hotel operators followed.

This year alone, Archipelago International opened eight Fave hotels and seven NEO hotels, its two budget brands.

Another company, Max One, whose tagline is "a value design hotel with feeling", has opened two new branches in Palembang and Bukit Jimbaran, Bali.

Meanwhile, Kagum Hotel group launched Zodiak Hotel to cater to the needs of modern budget hotel goers. So far, there are five Zodiak Hotels total with three branches in Bandung, one in Yogyakarta, and one in Surabaya.

According to Vas, the growth of chic budget hotels in Indonesia was driven by the increase in the country's middle class and also a change in customer demographics. Now more and more younger customers are demanding well-managed, clean and contemporary style establishments to be able to stay comfortably.

To cater to this market, Archipelago International focuses on the four Bs: bed, bath, breakfast and broadband. Vas believes if the four Bs are combined with friendly and motivated staff and a clean environment, the guests will be happy.

Clara Ng, famous Indonesian writer who travels frequently for work and holiday, said she was happy now that budget hotels were getting better. She shared her latest experience of staying at Max One Bukit Jimbaran, Bali.

“I got a booking mixed up and that night, I went to Ubud the whole day and only needed a place to crash at the area. Max One Hotels gave a friendly rate at only Rp 350,000 [US$28.70] when I checked in, almost midnight. At first, I did not expect too much but, to my surprise, the hotel was very pleasant,” she recalled.

Clara also said that nowadays budget hotels paid detailed attention to bed and shower.

“The beds are generally comfortable and the shower is clean and even sophisticated, unlike in the past where budget hotels' showers were often unbearable with no hot water running,” she said.

Clara added that she was also pleased that Max One gave 24-hour service and that the room was quite spacious too.

With people being more aware of architecture and design, Clara said this also boosted the growth of trendy budget hotels.

“Now design is getting affordable, and minimalism and modern style often translates into less furniture that cramps the room," she added.

What Clara experienced in Bali is one of the main reasons Kagum Hotel group is seriously developing the Zodiak brand.

According to Kagum Hotel marketing communication manager Bunga Faiti Putri, Zodiak is the company's answer to the rising demand for clean and comfortable hotels where guests can crash for the night.

“Now, with people often traveling for food, visiting tourism objects or shopping, they don’t want to spend a lot of time in the hotel relaxing. Mostly, they just need a place to rest at night and this is where budget hotels come in," Bunga explained.

At the moment, budget hotels in Indonesia are still largely occupied by domestic visitors. According to Vas, their hotels in Jakarta have the highest occupancy rate, above 90 percent, and all were driven by the domestic market, with the exception of Bali where they have large numbers of foreigners who are mainly from Australia, Japan and Russia.

Zodiak Hotels in Bandung, according to Bunga, also have high occupancy rates from the domestic market, with 60 percent of their guests coming from Jakarta for a weekend getaway. Its foreign guests mostly came from neighboring countries like Malaysia.

Next year, it looks like the flourishing trend in budget hotels in Indonesia will not slow down.

Kagum Hotel will add more Zodiak Hotels in Bali by February 2014, while Archipelago International is set to open 25 Fave Hotels and six more NEO Hotels. Max One Hotel also has plans to open at least eight more branches in several Indonesian cities.

With more and more budget hotels emerging, this means more competition, and luring customers with low rates will be an important strategy.

"This includes adjusting room prices and setting them based on availability," said Bunga.

Meanwhile, Vas said that staying focused on the basics and not compromising on standards was key for Archipelago International.

“Just the other day I spoke to a guest who gave us the compliment that we are getting better and better and our hotel looked fresh even after we have been open for two years," said Vas.

Fave Hotel: This year alone, Archipelago International opened eight Fave hotels and seven NEO hotels, its two budget brands

Zodiak Hotel: Kagum Hotel group launched Zodiak Hotel to cater to the needs of modern budget hotel goers. So far, there are five Zodiak Hotels total with three branches in Bandung, one in Yogyakarta, and one in Surabaya.

Amaris Hotel: The global tourism boom has produced new budget hotels that are chic, clean and offer great services.