Bali: Hotel & Branded Residences
By Matt Gebbie on February 17, 2017
Extract of our Hotel & Branded Residences Report: Bali
Quantity over quality: be careful what you wish for.
After a very challenging 2015 for Bali, occupancy was up by more than 4% in 2016 bringing a whiff of fresh air and hope… but at what cost?
Hotels’ enjoyment of solid occupancy across categories (excluding luxury) was driven by increasing foreign direct arrivals, a slowing in new hotel openings and a further slashing of rates. With the Thai government banning ‘zerodollar tours’ this has been an opportunity for Bali to swoop in and attract these poor yielding groups to fill rooms. With the government’s ambitious arrivals targets, it is foreseeable that the volume of such tourists is likely to increase but the long term benefits to the destination are arguable. Rates will continue to decline, Bali’s infrastructure will continue to be stressed and higher yielding more discerning guests may be turned off. It is a tight rope that is being walked with a quantity over quality policy. With the explosion in budget accommodation, private villa rentals and huge numbers of new rooms in all hotel categories in the last 5 years it is easy to see how volume bums in beds relieves immediate mortgage pressures for hotel owners. However, hotel ownership and destination management is not a short term game. Nurturing a destination, the maintenance of infrastructure and the development of long-term sustainable development goals are essential to ensure Bali continues attracting people from all corners of the globe and across all rate categories.