Bali has Too Many Hotel Rooms

(8/30/2010)

The Jakarta Post reports that a study conducted by Udayana University confirms that Bali is vastly over-supplied with hotel rooms with more than enough accommodation in hand to meet projected demand through 2015 when 6.6 million domestic and foreign tourists are expected in Bali.

Claiming that many hotels across the entire price spectrum are experiencing low occupancies, the Udayana study has joined the chorus calling for a moratorium on new hotel construction in Bali.

The report states that 38,000 hotel rooms will be sufficient to meet tourism demands through 2015, a number that has already been surpassed. Said Agung Suryawan Wiranatha of the Udayana Tourism Research Center: "This number is based on our survey, and it excluded villas and apartments, which are currently mushrooming."

Suryawan expressed his disappointment with Bali's inability to implement and maintain a moratorium on new hotel projects, first introduced by governor Dewa Made Beratha. "The moratorium has been revoked. The number of rooms has now reached 60,000 units," explained Suryawan.

The respected tourism academic said no new hotels should be built in Bali until 2015 in order to prevent unhealthy competitive practice among existing properties in Bali.

The head of Bali's Provincial Tourism Office (Kadiparda), IB Kade Subhisku, agrees with Suryawan on the need for a moratorium. He said that the current policy of decentralization has given regents and mayors in the right to overrule provincial calls for a freeze on new hotels and issue permits to hotel investors.

Over Supply of Transportation

Suryawan also said that Bali is oversupplied with tourist transport with the current fleets of 676 buses with more than 18 seats far in excess of what is projected as the market demand in 2015. Moreover, Suryawan says the survey shows the current supply of rental cars is sufficient to meet Bali's requirements through 2020.