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Editorial: A Rethink on Bali’s Recovery

Leaders and members of Bali’s tourism industry are holding their collective breaths, waiting for Bali’s return to “normal” levels of tourism activity in what has become known as the “new normal.” 

How long will Bali need to again welcome around 17 million annual visitors – a number comprised of about 6.3 million foreign visitors and some 10.7 domestic travelers? And, perhaps more to the point, when will Bali once again enjoy the more than US$10.7 billion in revenues spent by past visitors, both foreign and domestic, at the Island’s hotels, restaurants, shops, and tourist attractions?

And, of equal concern, will Bali ever fully recoup those halcyon days when the local economy provided direct and indirect employment for well over one million of the more than 4.2 million people who make their home on the Island?

The impact of the ongoing global pandemic on the world’s economy has been both wide-ranging and profound. The world now finds itself confronting a “new normal” in which the very nature of global travel has altered. These changes, in turn, will dictate the future face of Bali as an international travel destination.

In calculating the future of Bali tourism, consider the following:

What Lies Ahead for Bali?

Given the numerous detrimental impacts of a pandemic-ridden world on travel in the “new normal,” it is both naive and more than a little pollyannish to assume that Bali tourist arrivals numbers will return to their former pre-pandemic levels any time soon.  

The more likely scenario, in our view, is to plan for a return of visitors to Bali at around half the level experienced before the COVID-19 pandemic.

An Inevitable Price War Looms

If, as we suspect, Bali tourism returns at a fraction of its former self, an Island already oversupplied with hotel rooms before the global pandemic will be even more so in the months ahead. Desperate for cash, hotels will engage in an unprecedented price war that will, over time, make Bali a cheap destination over-supplied with rooms that are spiraling into dilapidation due to neglect and the lack of funds to maintain and refurbish room inventories.

What Can Be Done?

Bali desperately needs a new paradigm to address the lack of tourist visitors, the surfeit of hotel rooms, and an acute need for capital to drive its economy. 

Allow Us to Suggest

At this stage, to depend on tourism alone to restore Bali’s fortunes is to resign the Island’s future to little more than a pipe-dream and the possibly mistaken belief that Bali needs only patiently to wait for the “good old days” to return.

Given recent indications that President Joko Widodo is looking for bold, cross-sectorial remedies to help Indonesia escape its current predicament, we think the following outline strategies bear further investigation as ways in which to reduce the current over-supply of accommodation:

  1. Change immigration polices. Deregulate visa rules to facilitate the large market comprised of a floating mass of “digital nomads” to take up residence in Bali. Foreign workers create employment for locals Indonesians and seldom take employment positions away from anyone. Facilitate immigration stay permits for digital nomads whose office is a laptop and simply enforce long-standing Indonesian regulations that require income tax be paid by anyone spending more than 180 days in Indonesia during any calendar year.
  2. Turn Bali into a regional medical tourism center by deregulating the medical professions to allow foreign doctors to practice in Bali at modern medical centers. This approach has borne much fruit in Thailand, which now has world-class medical centers staffed by highly qualified Thai and foreign practitioners treating patients from around the world. Empty hotels could be rebuilt into modern hospitals and accommodation for travelers seeking medical attention.
  3. Similarly, widen current efforts to allow foreign universities to open fully-credentialed campuses in Bali. Indonesian and international students could undertake fully accredited courses of study from top-notch places of higher learning operating fully-accredited campuses in Bali. Winners all around as Indonesians receive a world-class education formerly only available at a high cost abroad; Bali becomes the world’s most famous “university town;” and empty hotels are converted into classrooms and student housing. 

These are just a few of the proactive remedial steps available to Bali warranting further investigation. 

What’s clear, waiting for tourists to return in their former numbers to Bali may prove to be a matter of placing our bet on a horse that may come in last or not at all.

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