Thwarted at every turn by regents and mayors who continue to ignore calls for a moratorium on the issuance of new building permits for hotels, the provincial government of Bali has written the Investment Coordinating Board (BKPM) requesting that no new investment licenses be issued for hotel projects in Denpasar, Badung and Gianyar.
According to Radar Bali, there are an estimated 90,000 hotel rooms in Bali now in operation in South Bali.
The head of the Bali chapter of the Indonesian Hotel and Restaurant Association (PHRI-Bali), Tjokorda Artha Ardana Sukawati (Cok Ace), declared that efforts to introduce a hotel moratorium in Bali have utterly failed.
Claiming the current situation makes no sense in terms of legitimate business investments, Cok Ace postulates that some of the new hotels being built in Bali are fronts for money laundering. He warns that these businesses pose a threat to the ethical hotel industry in Bali who still needs to secure viable occupancies and room rates from their properties.
Meanwhile, local home stays and inns complain that the current business climate in Bali means that they are now battling for business with 3-star hotels who lower their rates to Rp. 300,000 per night (US$24), rendering it almost impossible for locally-owned, low-cost accommodation to secure a workable market segment.
The situation is becoming increasigly acute. While in the past, local hotels and inns could count on achieving 100% occupancies from school groups over holiday periods, the intense competition from City Hotels means local accommodation providers have been left with half-filled hotels during these same periods.
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