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Prices to be Fixed for Bali Hotels?

Bali Government Considers Controversial Plan to Standardize Hotel Room Rates as Step to Limit Price Wars and Reduce Overbuilding

Bali News: Bali, Indonesia, Hotel price war, Hotel and Restaurant Association, price controls, PHR, Hotel and Restaurant Tax
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(3/24/2013) reports that Bali governor Made Mangku Pastika is considering measures to try to set standard rates for hotel rooms in Bali to help avert an all-out price war caused by current overbuilding of accommodation.

Pastika told the press that a policy on the standardization of hotel rooms will form part of a regulation to be issued by either the governor’s office (pergub) or a regional government (perda). He added that the price of a hotel room will depend on the respective hotel's status as a melati-class, one star, two star, three star, four star or five star hotel.

Explaining how the standardization of pricing might be implemented, Pastika said: “If a hotel sells itself for US$70 but our standard price is US$200 – for instance the pricing for five-star hotels is US$200 or US$300 a night – the Hotel and Restaurant Tax (PHR) of 10% would apply to the US$300 figure, not US$70. This would apply even though in fact the room was sold for US$70. I think this is one way to stop the uncontrolled building of new hotels.”

Pastika said any plans for the standardization of hotel room rates in Bali awaits the input and recommendations from the Bali Chapter of the Indonesian Hotel and Restaurant Association. The governor said plans to standardize pricing for Bali hotel rooms could be synchronized with the long-awaited on-line payment and reporting of hotel and restaurant taxes.

The on-line PHR tax payment system is intended to minimize the widespread tax avoidance and corruption now rife in Bali in assessing PHR tax bills.


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