Bali Threatens To Ban Airbnb As Island Cracks Down On Tourism Businesses

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Big changes could be on the horizon in Bali. The Governor of the province, Wayan Koster, is threatening to ban Airbnb on the grounds that the travel platform isn’t contributing enough to the local economy.

Here at The Bali Sun, we’ve got the lowdown and will report on this story as it unfolds. 

This isn’t the first time that Bali Governor Wayan Koster has threatened to ban Airbnb.

During his first term in office, he also threatened major crackdowns on the platform, citing, as he is now, that the accommodation booking website does not contribute to regional original income (PAD).

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Speaking from Denpasar on Wednesday, 3rd December, Wayan Koster told the Conference of the Indonesian Hotel and Restaurant Association, “We will review it later and propose that it be stopped.” Governor Koster is concerned that villas operating in Bali via Airbnb are not paying sufficient regional taxes. As independently organised travel has boomed in Bali over the last ten years, so too has the number of privately owned villas. Increasingly, tourists traveling to Bali prefer to stay in private holiday villas rather than hotels.

This demand for holiday villas has led to a boom in villa construction, and Governor Koster and the local government are concerned that many of these villas are operating outside of the law to varying degrees. There are concerns that villas have been constructed breaking spatial planning laws, violating licences and permits, and potentially not paying sufficient regional taxes. 

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Governor Koster noted that there are more than 2,000 unlicensed hotels and villas operating in Bali that must be brought into alignment with regional and national regulations.

He told the conference, “Airbnb isn’t fully supporting Bali’s local economy, that’s what’s happening now. Not to mention those that are illegal and unscrupulous. We will take action against them with no mercy. We must work together; it’s not just the government’s responsibility, it’s all ours.”

Tourism leaders in the accommodation sector in Bali are also concerned about the rise of illegal subletting. Leaders have noted a trend for foreigners renting a property from a local person as part of a long-term lease, only to then register the property on Airbnb and other booking platforms for a huge markup.

The Chairman of the Bali Indonesia Hotel and Restaurant Association, Tjok Oka Artha Ardana Sukawati, confirmed that there are currently 378 members of the organisation, which pales in comparison to the number of properties listed on Airbnb in Bali. 

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Sukawati told reporters, “This is very detrimental, as the increasing trend in tourist visits is not linear with local revenue and occupancy rates.”

In the immediate term, the calls to ban Airbnb in Bali do not affect tourists. Those with upcoming bookings and stays in Bali made via the platform can expect their travel plans to proceed as planned.

In the long run, the calls from Governor Koster to ban Airbnb in Bali could lead to a range of outcomes. It may be that Governor Koster and the provincial government introduce new legislation formally banning the platform’s use in the province.

It may be that the provincial government works with the platform to ensure that all properties listed on the site comply with all regulations.

Alternatively, the local government could create a new task force to check in on all accommodation providers in the province, ensure they are operating within the law, and, upon finding violations, hold property and business owners to account.

The issue isn’t necessarily with Airbnb as a platform, but with those who use it while violating local business licensing, permit, and tax laws.

Since Airbnb is a globally recognised and trusted platform, many international tourists prefer to book their accommodation this way. Many in Bali feel that this takes business away from locally owned businesses that are not operating on the platform. 

While Governor Koster and some accommodation sector leaders in Bali want to target Airbnb, the platform has been working to support the preservation and promotion of the island’s culture and heritage. 

In September 2025, Airbnb launched a collaboration with UNESCO to create the “Bali Cultural Guidebook” to help support tourists during their travels and help them explore lesser-visited cultural destinations.

At the launch event hosted at the GWK Cultural Park, Mich Goh, Director of Public Policy for Airbnb Asia Pacific, told reporters, “At Airbnb, we believe that travel becomes more meaningful when we can create genuine connections, not just with places but also with people and cultures.”

With Governor Koster and his teams now reviewing the situation, more updates are expected soon. Here at The Bali Sun, we will keep a close eye on this story and report back to you as soon as we know anything more, so you can travel to Bali in full confidence.