Officials Confirm Tourists Can Only Stay At Specific Hotels And Villas In Bali

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Officials in Bali have announced that they will be cracking down on tourists who are staying in illegally operated guesthouses, hotels, and homestays. The announcement comes as Bali’s Governor Koster called an urgent meeting with regency leaders to discuss non-payment of taxes.

During his press conference held in Denpasar on Wednesday, 31st May, Governor Koster was clear that the authorities will be coming in hard on accommodation providers who are not adhering to the law.

This includes hotels, guesthouses, B&Bs, and homestays that are either not formally registered accommodation businesses or those who are not paying their taxes from revenue generated from tourism.

Governor Koster said, “There are many illegal villas in Bali, there are even homestays where many tourists stay, and the hotel-restaurant text is not imposed, which is detrimental. That’s why the regents and mayor have been asked to file records of illegal villas and homestays.”

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So what does this mean for tourists? Surely tourists cannot be held responsible if they have booked accommodation through online booking platforms or travel agencies, but the accommodation itself is breaking the law?

It is likely that in the coming weeks, there will be a more formal crackdown on illegally operating hotels, guesthouses, and homestays. This could include targeted investigations or raids similar to those conducted by the Tourism Task Force, which is working to eliminate foreigners working illegally in Bali. 

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For the vast majority of holidaymakers coming to Bali, there is little to worry about, but for those longer-staying visitors, digital nomads, or private villa renters, there are a few things to keep in mind. 

As outlined in Governor Koster’s Circular Letter Number 4 of 2023, tourists and international visitors in Bali are only permitted to stay at accommodations that possesses the correct permits and business license.

This means that anyone who is in an informal short or long-stay villa rental agreement with a local person or family who has not formally registered their property as an accommodation business potentially risks being moved onto formal accommodation by the authorities. 

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It has been a longstanding issue within local communities in Bali that many private villas and local guesthouses listed on online booking platforms and social media marketplaces are not formally registered businesses or lack official permits and licenses to one degree or another. 

Governor Koster said that unregistered accommodation and tax evasion in the accommodation sector must be bought under control.

He explained, “If we allow illegal behavior, then quality tourists who are from Europe, or other good tourists, who [don’t] want their comfort disturbed may not want to come again, then there can be no more hotel and restaurant taxes which [generate] up to IDR 3 trillion.”

According to data from the Restaurant and Hotel Association of Bali (PHRI), as much as 30% of all accommodations in Bali are not legally registered business entities or are registered with the PHRI.

The Deputy Chairperson of the PHRI for Bali, I Gusti Ngurah Rai Suryawijaya, told reporters, “Illegal villas have been happening since 2015 because tourism has been directionless for too long, so now we have to [enforce the law]. Things [must be put] in order first, give businesses an opportunity to take care of permits.” 

Suryawijaya called on traditional village leaders to work with community members and businesses in their jurisdictions to ensure that paperwork is in order and collect data on those who are yet to acquire villa and homestay permits. 

Fundamentally, this news impacts local business owners, but it is something that tourists and long-stay visitors in Bali must be aware of. No matter how small of a business, local residents are legally required to pay taxes and operate within the law. 

To be on the safe side, long-stay visitors renting villas, rooms, or homes in Bali should check in with the landlords to ensure that permits and paperwork are up to date to help keep everyone safe in the eyes of the law.

For tourists coming to Bali, booking accommodation with internationally recognized hotel chains, large-scale resorts and hotels, villas, and guesthouses that display their business credentials clearly on their websites, social media, and online communication is the best way to ensure you’re supporting legitimate businesses in Bali.