Bali continues to find its feet in a post-pandemic world. As the island battles with rising fuel costs and inflation, local business owners are working to establish themselves financially in the wake of financial losses experienced over the last two years.
This is leading to increases in the cost of rental accommodation in areas often visited by holidaymakers and digital nomads. Guesthouse owners and landlords in Ubud and the surrounding communities are increasing their rental prices to reflect the changing economic landscape.
For over twenty years Ubud and the surrounding communities like Penestanan, Mas, and Sayan have been a home from home for spiritual seekers, yogis, culture lovers, and digital nomads. The area has become synonymous with self discovery and offers largely international clientele access to world-renowned health and well-being services.
@moments_of_yugen The most beautiful bamboo villa in Bali 🌿🌴😍 #bamboovilla #bamboohouse #bamboovillage #ubudvilla #junglevibes #baliubud #ubudvilla ♬ original sound – moments_of_yugen
In recent years, Ubud has become a hotspot for digital nomads who want to experience more of Bali’s culture, live something closer to a ‘local’ lifestyle and steer clear of the hustle and bustle of the southern beaches. In a practical sense, Ubud, and other communities in the area, have provided affordable accommodation and a warm welcome.
Ubud and the surrounding communities offer a plethora of accommodation options, including hundreds of private rental homes, apartments, and rooms. While some of these homes were occupied by visitors who did not go home during lockdown, the vast majority have stood empty for nearly two years.
Now that mass tourism has firmly returned to Ubud, rental homeowners are left with a tricky decision. Do they ramp up prices to recuperate losses and remain confident that demand will remain high; or do they keep prices the same or even lower than usual just to get rooms occupied.
In figures reported by Nusa Bali, before the pandemic, the average rental villa in the Ubud area would cost IDR 350,000-450,000 (USD23-30) a day if the accommodation had a pool and closer to IDR 150,000-300,000 (USD 10-20) if it did not. These costs are an average rate for a privately managed villa not listed on sites like Airbnb, where hosts can charge even more.
Rental accommodation prices in the Ubud area have risen sharply in the last 5 years as a general trend; least not because of the area’s award winning status. In 2022 alone Ubud has been ranked as the best city in Asia, and the best destination for solo travelers by esteemed travel publications.
Villa owner Ketut Puri told reporters he had chosen to increase his prices based on the influx of tourists he has seen in the last few months. He explained, ‘In the past, the rental price was only to cover maintenance costs. Such as paying for electricity, laundry, and routine cleaning’. Now he has priced his villas to generate a greater profit, though he did not share by how much.
According to the Head of the Regional Revenue, Finance, and Assets Agency of Gianyar Regency, Ngakan Jati Ambarsika, Ubud has reached an 80% recovery. Ambarsika explained that promotion is still necessary to bring people to Ubud and the surrounding communities. The finance agency had set targets of generating IDR 524.3 billion in hotel taxes this year.
Yet, IDR 248.7 billion has been clocked up by the regency’s accommodation providers in the year to date. Despite this, he said that the finance agency has extended the freezing of tax penalties for the hospitality sector for a further few months ‘So that they are not burdened with fines again. It ends this October, but we have extended it until December’.
As Bali continues to promote itself as a destination for ‘serenity, spirituality, and sustainability’, there will no doubt be even more people heading to Ubud for extended periods. This week Minister for Tourism Sandiaga Uno encouraged digital nomads to come to Bali on the B221a socio-cultural visa, which enables remote workers to stay in Bali for up to 6-months.
It remains to be seen if rental accommodation prices in Ubud will rise continue to across the board. Whether the dilemma faced by homeowners will change the area’s appeal to budget-conscious travelers and digital nomads looking for a more affordable cost of living than their home countries.
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