Bali Tourism Leaders Question Whether Island Really Needs New Hotels 

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Tourism leaders in Bali are calling on the provincial and central governments to assess how building and development permits are granted to tourism businesses on the island.

The calls come as many Bali lovers feel that the current rate of tourism infrastructural development in Bali is unsustainable and on a fast track to disaster. 

Leaders from the Indonesian Hotel and Restaurant Association (PHRI) have spoken to reporters about how they feel the way in which building permits are granted to developers needs to change.

They have voiced fears that the government is selling permits to build hotels rather than granting permits and licenses based on what is best for the province. 

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The Executive Director of the Indonesian Hotel and Restaurant Association (PHRI) Bali Province, IB Purwa Sidemen, told reporters, “The question is, why are there still hotels being built? Because there are no definite figures that allow them to build them. So there are no figures that show how many hotels Bali needs.” 

He continued, “So, maybe that’s what we and several fellow academics on campus are paying attention to: hotel construction permits really look like they’re on sale…. That’s in line with our voice in the association. However, the name sale means free sale. Maybe the government doesn’t like it when it’s called a sale.”

“However, the government depends on how the leader is. For example, Badung has gone overboard with the number of accommodations but doesn’t want to limit permits for development because PAD [tax revenue] will decrease.”

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Sideman said that with all this development happening all over Bali, but especially in Badung Regency, home to resorts like Canggu, Uluwatu, Seminyak, Legian, and Kuta, it is increasing difficult to ensure that tourism on the island is of a higher quality as can be. 

Sideman added, “We who are involved in the world of tourism, of course, talk about quality tourism. So now it is difficult to make that happen. Even though the COVID-19 moment filters the number of tourists, improves accommodation in Bali, and sells at a good price, that is not happening. So the problem is very complex.”

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In data shared by the PHRI Bali, currently in Bali there are more than 3,500 hotels with 146,000 rooms.

This is only registered hotels, this does not include hotels, guesthouses, B&Bs, hostels, villas and private rental homes that are not registered with the PHRI.

According to the PHRI hotel occupancy in Bali has never reached the ideal percentage between 2010 to this point in 2024.

Sideman said that over the last 14 years, the average hotel occupancy in Bali has sat between 60-62%, which is lower than the ideal rate of 70-75%.

Even taking into consideration the impacts of the pandemic, with hotel occupancy consistently lower than the sector would like to see, the question of whether Bali needs more hotels, as posed by the PHRI, is understandable. 

Sideman explained, “From 2010 until now, the average hotel occupancy statistics have been 60% to 62%. Normal hotel occupancy is 70% to 75%; the hotel can pay for electricity and employees and already makes a profit. If it’s below that, right? This means that the hotel cannot fulfil its own needs; the hotel is not healthy.”

He added, “Hotel occupancy, which ranges between 60% – 65%, shows that we need tourists to come, but it is said that many guests have already come. However, how come the occupancy has not increased.”

“This means that every year, there are additional properties with a very large number of rooms. The government has never calculated how many tourists each year Bali needs so that all the hotels can be filled.”

Sideman and the PHRI are not the only tourism stakeholders to be calling for the way in which Bali’s tourism development is managed to be changed.

Many academics and even political leaders are calling for an urgent review of spatial planning protocols and for current development and construction law, as well as environmental assessment requirements, to be enforced even more strictly.