INVESTOR FORUM
Investment Thesis
The global tourism business is rapidly expanding, and this trend is projected to continue in the future. Bali, as one of the worlds most favorite destinations, has some tourism and attraction uniqueness, such as cultures, arts, religion, building architecture, beautiful beaches and scenery, and many more. More than 6.3 million foreign tourists and about 10 million local tourists come to Bali in a year and the number kept increasing every year. Bali is currently popular not only for leisure destinations but also for business purposes.
MICE (Meeting, Incentive, Conference, and Exhibition) has been targeted to be leading tourism and will grow rapidly after the pandemic ends. The main reason is that MICE has enormous potential to boost the economy. Many MICE events have been conducted in Bali by domestic and international meeting planners. In fact, Bali has been at the top of the rankings for MICE destinations in Indonesia since 2010.
Bali is the most potential MICE destination because of the following reasons:
1. Conducting exhibitions in Bali has a wider opportunity to be accessed by international audiences.
2. Business events can be combined with other entertainment activities as incentive trips, such as going to shopping centers and a variety of recreational places.
Arranging meetings in Bali makes it easier for the event planners to adjust the theme to the desired location. If they want a beach atmosphere, Bali is a paradise of the most exotic beaches in Indonesia, such as Kuta, Nusa Dua and Jimbaran. If they want to highlight the feel of peaceful countryside, some locations in Bali are also surrounded by panoramic views of Balinese terraced rice fields, such as Ubud and Jatiluwih.
Hotels with international-standard supporting facilities, such as nice and clean rooms, excellent service, ballrooms, and exhibition venues are becoming critical for those who would like to visit Bali. For this reason, hotel investment in Bali is one of the prospective businesses and becoming a golden opportunity for the Indonesian diaspora who would like to optimize their assets.
Problem Statement & Opportunity
Lots of underappreciated asset During this COVID-19 pandemic, the number of tourists coming to Bali has dropped very steeply, and this has given a significant impact to hotel performances and businesses. Some of the hotel owners are unable to deal with this situation, so they prefer to sell the hotels to survive. The owners are willing to sell the hotels at very low prices since they cannot pay loan installments from banks or investors as their financial supports.
Why do we think Bali will recover?
Absolutely. We all know that Bali is the number one tourism source of income in Indonesia. Bali, with all its uniqueness and perfect facilities, is still a paradise island to be visited. Even during this pandemic, many people still visit Bali for leisure and to run away from stress. After the pandemic, it is believed that Bali will recover fast, and the number of tourists will be exploding.
Solution & Value Proposition
Solution Hotel Salak The Heritage Group, as the Hotel Management Company who has experience of more than 23 years as a hotel operator, would like to invite the Indonesian diaspora to join this golden opportunity. We can raise the fund together to take over one of the hotels in Bali, and all the funds will be converted as shares in the investment company, namely PT Salak Maju Bersama. The company will then take over the ownership of the hotel at a very low price. We encourage you to join now as the hotel price will be increased double, right away after the pandemic ends.
Fund Detail
Fund Type : Private Equity
Geography : Indonesia
Fund Size : Rp. 400 Billion / USD 28,571,450
Investment Size : USD 1,000 - USD100,000
Investment Criteria : Targeted towards investors who are willing to take opportunity for big benefit Industry: Hotel Accommodation / Tourism Business
Time Horizon : 6 years
Target IRR : 19%
Fees : 3%
Target Investors : Young Executive, Indonesia Diaspora, Businessman
Revenue : Room, F&B and MICE business
Target Impact : increase job opportunities in Bali, Help economic development & recovery, improve the welfare of the Balinese people.
Operating Model
How will it work? Are we limited only to hotel investment? To take over a hotel in Bali, the Indonesian diaspora will put an investment of about USD 26 million in PT. Salak Maju Bersama, and put 80% shares in PT. Pembangunan Hotel Internasional together with 20% shares of PT. Salak Business Internasional.
Who will manage the hotel? Hotel Salak The Heritage Group has a business unit of hotel operator and management service, called Salak Hospitality. Salak Hospitality Management will manage the Hotel in Bali. Salak Hospitality has outstanding performance as follows:
Salak Hospitality has more than 23 years of experience in operating hotels.
One of the operated hotels is Hotel Salak The Heritage, which is always on the top 5 ranks among big hotels in Bogor and surroundings.
Good experience in handling MICE events such as managing White House guests during President George W Bush Jr. visit to Bogor and receiving an appreciation certificate from the White House Secretary.
Has 8.5 score in Google & Online Travel Agent rates.
Has experience in managing star hotels of new development and taken over hotels.
Value Proposition Talk about the industry appeal Why us?
Attractive IRR of around 19%.
The market is available and ready to visit Bali, with over 16 million tourists per year
You can own an exclusive hotel in Bali, Indonesia.
Reducing the unemployment rate in Indonesia
Increasing the government's earnings from tourism-related activities.
Improving the investors' economic wealth
Market Target
Tourism is the world's leading source of revenue.
Bali is one of Indonesia's top ten tourist attractions in terms of revenue contribution to the government.
Every year, approximately 16 million tourists visit Bali, and the number continues to rise.
If we succeed in Bali, we may expand our hotel and MICE businesses and invest in other Indonesian tourism destinations such as Jogjakarta, Bandung, Malang, and Bogor. These cities are now well-known for their tourist attractions.
Financial Model Key Metrics
Overall IRR of 19% for equity holders.
Cash flow is expected to be positive from the first full year of operations.
Total revenues are expected to reach 74 billion, versus 44.8 billion in costs, for 29.2 billion in EBITDA.
80% of profits are distributed as dividends to shareholders twice a year.
Total profit-sharing distribution to the investor about 24 bio per year Key Assumptions
Hotel operations will be able to capture 60% of hotel occupancy.
Cash flows and market growth will increase by approximately 5% to 10% per year.
MICE events are increasing every year.
The property value will double after the epidemic is over
The property value will increase by around 3% each year.
ESG Impact & Metrics
The hotel industry will have an impact on all business sectors and has a multiplier effect on the local economy. In Bali, the hotel will employ more than 200 employees. In this case, about Rp. 70 bio each year would be circulated among all stakeholders (employees, suppliers, guests, government, etc.).
Due Diligent & Risk Management
Risk
Force majeure
World economic issue
Investment shortage
Mitigation
Professional and experienced hotel management.
Good promotion system and management, and good relationship to all stakeholders.
A valuable and high number of customer database, for both individual and business customers.
