Bali hoteliers warn of too many rooms and a looming price war
I Gusti Agung Rai Suryawijaya, head of the Badung chapter of the Indonesian Hotel and Restaurant Association (PHRI), warns that Bali is building more rooms than the island can fill.
He says most properties now listed for sale are villas that are already built and operating. Most hotels on the market run at over 60% occupancy, some up to 75%. He considers that a healthy level.
The main pressure comes from domestic tourism. He estimates domestic visitors fell by about 15% in September because of expensive airfares and fewer government events. Around 22,000 foreign tourists arrive per day.
If construction continues at this pace, a price war will follow: lower rates mean lower income for owners and lower taxes. He proposes studying how many tourists the island can handle and considering a moratorium on new accommodation in Denpasar, Badung, Gianyar and Tabanan (the Sarbagita area).
What it means for buyers: competition for guests is growing in popular southern areas. When you estimate returns, use cautious occupancy and nightly rates, not brochure figures. The moratorium is only a proposal for now, but if adopted it would affect new projects.