PT Indonesian Paradise Property Tbk (INPP) sets its Capital expenditure (Capex) to IDR 1 trillion for the year 2023. Its Capex will be used to continue its 7 ongoing projects, despite a threat of global recession.
Established in 2002, the company focuses on accommodation services (hotels) and invests in shares. The company also has the HARRIS hotel in Bali in 2002. Its subsidiary PT Indonesian Paradise Island developed the Sahid Kuta Lifestyle Resort area, including the Beachwalk Shopping Center, and Sheraton Bali Kuta Resort in 2012. In 2015, the company acquired PT Plaza Indonesia Realty Tbk in the property sector. Early in 2017, it collaborated with BINUS Bandung to inaugurate 23 Paskal Shopping Centres through its subsidiary PT Mitra Perdana Nuansa. By now it has given Bandung a positive contribution to the community hub through its mixed-use development.
Seven projects in 2023
INPP will use its 2023 Capex to continue the development progress of its 7 projects currently under construction. The 7 projects include the Sahid Kuta Lifestyle Resort, Hyatt Place Makassar, 23 Paskal Extension, mixed-use in Semarang, Antasari Place Semarang, residential & commercial in Balikpapan, and the continuation of Antasari Place.
At the end of 2022, the company absorbed IDR 560 billion since September 2022. It also surpassed the number of funds it had allocated beforehand.
“Our target is to double the Capex in 2023, or nearly IDR 1 trillion, for various business development plans that have been set, especially the hospitality business,” INPP CFO Surina told Kontan.co.id on December 19, 2022.
To date, the company’s hospitality business has recovered from the COVID-19 pandemic, and about 80% of its revenue was contributed from the hospitality and commercial businesses. The company owns Plaza Indonesia, ThePlaza, Fx Sudirman, Beachwalk Shopping Centre, and Park23 in the commercial business. In hospitality sector, INPP has 13 hotels including the Grand Hyatt Jakarta, Sheraton Bali Kuta Resort, Hyatt Place, Aloft Hotel, Maison Aurelia, Sanur Bali, Harris Hotel, Yello Hotel, and Pop Hotel. As for residential sector, INPP owns Keraton at the Plaza, Fx Sudirman, One Residence, 31 Sudirman Suites, Residence Beachwalk, and Antasari Place.
Risks in hospitality industry
The COVID-19 pandemic that hit the world since early 2020, has threatened the hospitality industry whereas governments were struggling to impose strict health protocol to curb the spread of coronavirus.
According to Secretary General of Indonesian Hotel and Restaurant Association (PHRI), Maulana Yusran, hotel guests should undergo body temperature check to prevent any guests with COVID-19 symptoms from entering the hotels.
Apart from that, the toughest challenge was to require guests to use masks properly. Many argued that face masks prompted the guests to breath normally.
Another challenge, according to Yusran, was the government’s order to the people to stay at home and avoid leaving the house. The increasing number of infected people also made the public to think twice to leave the house, moreover to go for vacation.
Chairman of PHRI Yogyakarta chapter Deddy Pranowo Eryono said in 2020 that the government should have assisted hotel business to bear the cost of tax relief and operational expenses for electricity and water.
Meanwhile, PHRI Regional Leadership Body (BPD) chairman Sutrisno Iwantono said in September 2021 that during the pandemic, the Indonesian hospitality sector was really apprehensive. Many star hotels may go bankrupt due to the declining number of visitors during the pandemic.
