Bali’s large Meeting, Incentive, Convention, and Exhibition (MICE) sector has been dealt a crippling blow due to an “efficiency” change in Indonesian government policy, curtailing government budgets for out-of-town meetings.
Eliminating budgets for “official” travel and canceling events and ceremonies at star-rated hotels is causing a significant downturn in Bali’s MICE Sector.
Quoted by Beritabali.com, the deputy chairman of the Bali Chapter of the Indonesian Hotel and Restaurant Association (PHRI-Bali), I Gusti Ngurah Rai Suryawijaya, says the MICE Sector in Bali has declined by as much as 15% due to the change in Central Government Policy. Hotel occupancy rates at Bali hotels have also suffered,
Rai added: “The number of tourists coming to Bali remains stable, averaging around 16-17 thousand per day. However, most domestic travelers are from the lower middle economic segment and prefer to stay in villas, guest houses, or apartments. As a result, starred hotels have lost many customers from the MICE sector.”
Rai contends the downturn being experienced in Bali is similar to other large cities in Indonesia. “Many PHRI members in other regions are complaining of a similar occupancy plight to Bali. The elimination of the MICE budget has put hotels that rely on this sector under severe pressure,” he added.
A survey conducted by PHRI in cooperation with Horwath HTL covering 717 hotels in 30 provinces showed that more than 50% of starred hotels have been affected by government policy changes. As many as 42% of hotels reported that their meeting rooms were unused, while 18% experienced a decrease in demand during weekdays.
Based on the survey, more than 50% of the responding hotels report that their income decreased by more than 10% in November 2024 compared to the previous year. The situation worsened in January 2025, when more than 30% of hotels experienced a more than 40% decrease in income compared to last year.
This downturn is also affecting the accommodation sector’s workforce. According to the survey, as many as 88% of hotel entrepreneurs predict that they will be compelled to lay off their employees. Rai affirmed that a similar scenario is very likely to happen in Bali.
“Layoffs will definitely happen because, without meetings and events, many hotels lose their main source of income. Many ministries and government agencies have canceled events due to budget cuts, so the MICE sector has slumped,” Rai said.
Rai added: “Currently, we are still surviving, but if conditions continue to worsen, we will be forced to make workforce efficiency, especially in the MICE sector.”
PHRI is calling on the government to review the budget cuts. According to Rai, the hotel industry has tried to overcome this situation with various promotional strategies and cooperation with wholesalers and travel agents. However, without the support of more flexible policies, this sector will continue to experience pressure.
“The government can reduce the number of meetings from three to four times to one or two times a year but don’t eliminate them altogether. The MICE sector concerns hotels and small and medium-sized entrepreneurs (MSMEs) that depend on hotel events,” he concluded.
PHRI hopes that the government can review the budget efficiency policy. According to Rai, hotels and related sectors have tried to overcome this condition by promoting and cooperating with wholesalers and travel agents. However, if there is no change in policy, this sector will continue to suffer.
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