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Room at the Inn

Head of Denpasar Hotel and Restaurant Association Reports Lower Occupancies over Year End Holidays 2012

(1/4/2013) The head of the Denpasar chapter of the Indonesian Hotel and Restaurant Association (PHRI), I.B. Gede Sidharta Putra, told Radar Bali that there has been a “retreat” in hotel occupancy levels over the just concluded Christmas and New Years Holiday period.

“The occupancy rates for the year end holidays of 2012 were not a high as expected. On the average (occupancies) were at 80%. When compared to the previous year when almost all hotels in Bali were full of fully booked,” explained Sudharta on January 1, 2013.

He claims the drop in occupancy levels at Bali hotels is due to a drop in Australian arrivals of 20-25%. “Australian tourists are now visiting more distant destinations. They are traveling to Thailand and the U.S.A.. This is because of the improvement in the value of the Australian dollar,” said Sidharta.

He also blamed the drop ion occupancy on the number of new hotels built in Bali that is outpacing growth in demand. Sidharta is concerned that the severe oversupply in rooms will eventually result in the drop in hotel occupancy, the loss of “Balinese character” and a price war.

Continuing, he said, “The development of new hotel should be based on the carrying capacity of the surrounding region. The government should tighten licensing requirements. Don't let (what’s happening) become a boomerang for Bali tourism in the future.”

Sidharta also claims that the ongoing economic crisis in Europe has reduced Greek, Italian and Spanish arrivals by 25% and length of stays have become shorter from three weeks in the past and now are only one week in duration. He also said crime, security transportation and supporting infrastructure were having an impact on arrivals.

Sidharta’s depiction of 25% drop in arrivals from Australia and selected European countries is not reflected in offical arrival numbers issued by Bali authorities.