DAFAM Hotel Management has signed an agreement with Istana Group to manage Dafam Istana Luwuk, the first-ever star-rated property in Luwuk, the capital of Banggai Regency in Central Sulawesi, Indonesia.

Built at a cost of 25 billion rupiah (US$2.75 million), the three-star Dafam Istana Luwuk is expected to start operations by end-2012, offering 65 rooms in two categories. Facilities will include a function hall with capacity for up to 1,200 people, two 50-pax meeting rooms, and a karaoke club with 20 rooms.

Dafam Hotels & Resort Indonesia managing director, Andhy Irawan, said: “Luwuk is a growing business destination with an abundance of liquefied natural gas (LNG) and nickel deposits, and is a transit point to Wakatobi—the famous dive resort destination.”

Sultan Group owner Bernard Mahamudu was optimistic that the property would soon be running at peak occupancy, as demand for hotel rooms in Luwuk was high.

“The accommodation (options) available in Luwuk are basic inns, yet they sell at 400,000 rupiah per night, and some (rooms) are sold to the LNG companies for their long-staying guests," he said. "There is a big opportunity for a star-rated hotel here.”

Dafam Istana Luwuk will be the seventh hotel developed and managed by Dafam Hotel Management since the group launched last March. Four hotels are already operational, while three hotels in Bandung, Pekalongan and Solo will soft open next month.

Meanwhile, new projects in the pipeline include hotels in Jakarta, Bandung and Makassar, as well as eventual expansion outside Indonesia--to Beijing. 

Luwuk is served by Batavia Air, Express Air and Merpati Airlines from Makassar and Manado, while Lion Air launched daily Jakarta-Makassar-Luwuk services starting today.