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Room Rates in Bali Under Pressure From Energy Costs

Bali Room Rates Predicted to Increase 15% Following 44% Hike in Fuel Costs

(6/22/2013) The Bali Chapter of the Indonesian Hotel and Restaurant Association (PHRI-Bali) is predicting the hotel room rates will increase around 15% as the result of the fuel price increase of 44% for premium gas that came into effect on June 22, 2013.

The chairman of the PHRI-Bali, Tjokorda Oka Artha Ardana Sukawati (Cok Ace), says he expects the increase in room tariffs to largely reflect the increase that occurred when fuel cost last increased. Cok Ace explained that energy costs represent 35% of all operating costs for accommodation providers.
 
As reported by Bisnis Bali, PHRI-Bali says that while they accept the government’s decision to increase fuel costs, the actual cost of this increase will be passed on to the consumers.
 
Separately, the Indonesian Association of Travel Agents (ASITA) says there are no plans to increase the tariffs of travel agents charges to domestic and international partners due to ongoing contractual commitment. In some instances, however, agreements do exist that allow rates to be increased when overriding circumstances, such as a significant increase in energy costs, take place.
 
Earlier, the chairman of the Bali Transportation Association (PAWIBA), Bagus Soediana said he predicts transportation costs will increase between 10-15% due to the increase in fuels costs.
 
Fuel costs went up 44% or by US$0.20 per liter for premium on June 22, 2013. Diesel fuels costs increased US$0.10 per liter on the same date.