JAKARTA, Indonesia — The Southeast Asia’s biggest economy has been ‘quietly’ growing around 6.5 percent a year and residential demand in the past four years has been growing around by six to seven percent annually.
Fabric wholesalers are having a ‘field day’ with the business according to those surveyed by Fabrics & Furnishings International.
Fabric sales are being driven by a burgeoning middle class, and an increased focus on both domestic and inbound tourism. Indonesia is one of the most exciting hotel markets in the world today due to the influx of budget airlines in Asia and within Indonesia. This has increased affordability of air travel.
Santika Indonesia Hotels and Resorts with 57 hotels is seeing demand for rooms due to the inflow of business people. It is adding 53 hotels and is targeting to reach 100 hotels in the coming two years.
The Best Western International chain is on track to open 25 new hotels in the next three years. The list is endless.
The boost in domestic travel as well as international tourism has created additional demand for new hotels. This has a direct impact on sales of all home furnishings and décorative fabrics.
According to a study done by HVS Global Hospitality Services, Singapore has a five percent compounded annual growth rate. Domestic and international visitor arrivals by the year 2022 will bring an additional 100,000 guestrooms. That translates to an estimated 700 to 800 hotels to be built in the next decade, creating tremendous opportunities for both domestic and international hotel management groups. According to sources, in Bali island alone 60 new hotel projects are currently under construction. Five star hotels are making up 37.7 percent; four-star hotel rooms comprised 31.3percent, while three-star hotels made up 31percent.
“Since the last three years, our business is driven by new residential projects, existing high-end homes decoration and booming hotel projects”, said Vikesh Nanwani and his brother Sohan principals of Amardeep Interior Collections, Jakarta. Sohan will soon finish his Masters Degree in Economics in the United Kingdom. He recently joined the family business and his main focus is to increase market share further, he expressed. “Contract business in upholstery, curtains and outdoor fabrics are in good demand though profit margins are more attractive in the residential segment,” commented Vikesh. Amardeep Interior Collections observes that Sunbrella® collections especially for outdoor is ruling the market and Amardeep has developed its own line of product with Sunbrella designers which suits local trends. Vikesh also said that plains, solids in textures and damasks continue to rule while silk demand is limited to very high end homes only.
New hotels in Jakarta, Bali and other cities are adding up. Two and three star hotels prefer low-end fabrics whose demand is met by local Indonesian fabric manufacturers while four and five star hotels prefer imported fabrics from EU, Turkey and other Asian sources, observes Vikesh. The company also supplies fabrics to 300 retailers in the Indonesian market. “In the past f four years we have added 30 retailers in Singapore and 50 in Malaysia but the business in Singapore is more architect/Interior designer driven and we promote our collections through them”, said Vikesh.
Echoing similar observations, Home Décor, a 21 year old retailer is preparing an expansion of retail space and modernization of the main showroom. “Our humble beginning with a 150 square meter showroom now measures 2,400 square meters and we will add another 1400 meters in two phases but the first addition of 600 will be completed in 2014 and we will add 1000 meters quickly”, said Vishnu and Kamalesh brothers, partners, Home Décor. Home Décor is a leading retailer and derives 70% business from residential decoration and 30% from contract.’
“Since 2000 we have added the wholesale segment also but certain capacity constraints have limited our expansion plan,” Kamalesh adds. Velvets, linen and blends are trends in our retailing and cotton sofa fabrics are in good demand”, he observed. ‘’The positive opportunities in the market place is very encouraging and we are busy in decorating five star hotels and we have a handful of assignments.”
“The residential sector is kicking too,” said Asha Bharwani, principal of Serba Antik with her husband Prem based in Jakarta. Serba Antik is busy in furnishing a Sofitel six star hotel, a Harris, a Ramada and others as well as decorating very high-end Villas. “Since the past three and half years we have diversified to wholesale with our own brands as ‘Pazzion’ for high-end and ‘Fresco’ in the middle range,” Asha added. Serba Antik is soon starting its dream retail infrastructure showroom and is slated to be one of the most modern conceptual retail outlets in Asia. The details will be unveiled soon.