Bali’s Canggu Could Have Too Many Hotels By 2025

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Without a doubt, the most popular area to travel to in Bali right now is Canggu.

The once sleepy traditional village slowly became popular with surfers and backpackers before mushrooming into a full-blown tourism resort in the last few years. 

It is no exaggeration to say that a new tourist-forced business is opening up in Canggu every day, at the very least every week. From coffee shops to boutique stores, from fine dining restaurants to hotels, bunnies are booming, really booming, in Canggu. 

Business is booming so hard and fast, however, that Canggu risks going bust in the next couple of years if things continue to grow exponentially.

With so many new hotels, resorts, villas, and guest houses opening up every month in Canggu and yet more under construction, as we write, there is a real risk of oversupply and tourism making the resort go kaput. 

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The Founder and CEO of hotel group OXO, Johannes Weissenbaeck, says that the addition of new hotel rooms could trigger excess supply or oversupply in Canggu.

Speaking to business reporters, Weissenbaeck said, “In Canggu three years ago, there were 3,800 rooms available; now, there are around 5,200 rooms. Next year, it will be almost 6,000, meaning it will double. In 3-4 years, that will definitely be an issue.”

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He added, “For me, oversupply is not a problem. Our current occupancy is 68%, which is quite good; Bali’s standard is 61%.”

Nevertheless, he feels that many accommodation providers in Canggu must start to strategize long-term to keep bringing tourists to the year.

The tourism boom in Canggu has partly been boosted by the wake of the pandemic, with many people seeking to live the digital nomad lifestyle and other international events. 

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The Hotelier explained, “Many people work remotely; they can work from anywhere, especially since the cost of living is cheaper compared to other cities in the world. So many feeder markets, such as Singapore, are coming to Bali. Plus, the conflict in Russia-Ukraine is making them move to Bali.”

He continued, “In Bali, it’s very funny that during the pandemic, many people from Jakarta went to Bali to buy property, but Balinese people didn’t reduce prices. The market in Bali was very strong; when it went down, it didn’t collapse. In Europe and the U.S., it could collapse.”

The oversupply of hotel rooms may bring benefits to tourists in the short term, but in the long run, it is bad for Bali and for tourists.

Right now, tourists will be able to enjoy an abundance of choices when it comes to the kind of resorts and hotels they want to stay in.

As demand rises, prices for room rates will peak, especially as developers need to make their money back. But as these resorts invariably struggle to get people into rooms, the prices may start to drop to help bring more tourists into the area.

Tourists wanting a less crowded, more luxurious experience will start to look elsewhere, and the development follows suit.

Weissenbaeck’s thoughts on an oversupply of hotel rooms in Canggu is a concern echoed by the ex-deputy Governor of Bali, Cok Ace, who is still the Chairman of the Bali Restaurant and Hotel Association.

He said earlier this month that he wants to see serious spatial planning and a survey conducted to find out exactly how much demand there is for rooms in Canggu and other popular resorts before more hotel and resort development permits are issued. 

The concern for many leaders in Bali is that many of the newly built resorts and hotels do not adhere to traditional Balinese cultural and architectural principles that inherently support sustainable tourism. 

Top sustainable and Balinese-inspired hotels in Canggu include the 5-star Hotel Tugu, Belajar Bali Boutique Hotel & Retreat, and Serenity Eco Guesthouse & Yoga.