
Market Report
Bali Hotels & Branded Residences 2020
Is there a canary in the coalmine?
2019 was business as usual (aka difficult) for hotels in Bali. There were no airport closures, nor earthquakes but the market was rocked by a big fall in Chinese arrivals and a duopoly of national airlines charging exorbitant airfares forcing domestic tourists to vacation abroad. All the work done = flat occupancy, flat rates and flat RevPAR across the market in 2019. Hotels in Jimbaran/Uluwatu & Ubud faired best, recording strong RevPAR growth together with luxury hotels which maintained RevPAR YOY.
Due to over tourism and environmental concerns, Bali was included as one of 13 destinations on Travel guide Fodor’s “no go” list in 2020. Bali faces looming ecological challenges such as trash on the beach, traffic jams in main tourist districts, and freshwater scarcity. Without solving these problems, Bali has to rein in its tourism growth.
Bali’s current real estate market unlike other Southeast Asian resort destinations such as Phuket in Thailand is shifting away from hotel branded residences and condotels. The current property market is now seeing development of rental yielding villas and apartments in the high growth areas of Canggu, Brawah and Uluwatu.
Visitor Arrivals and Market Segmentation:
International Arrivals
- 2019 Statistics: Nearly 6.3 million international visitors, a 2% increase year-over-year.
- Top Source Countries: Australia (20% of total), China (19%), India (6%), the UK (5%), and the US (4%).
- Regional Breakdown:
- Asia Pacific (Excl. ASEAN): 36% of total, a 5% decline mainly due to reduced visitors from Hong Kong and China.
- Europe: 24% of total, with significant growth from Russia (+28%), the UK (+6%), Germany (+5%), and France (+6%).
- Oceania: 22% of total, with Australia and New Zealand showing increases of 6% and 18% respectively.
- Middle East: 1% of total, with a 34% increase, notably from Saudi Arabia (+59%) and Egypt (+37%).
- Americas: 7% of total, with a 15% increase driven by the US (+18%).
Domestic Arrivals
- 2019 Statistics: Domestic tourists decreased to approximately 6.2 million, the lowest in six years and a 36.5% year-over-year decline.
- Key Issues: High domestic airfares due to the duopoly of Garuda and Lionair, and the dampening effect of the 2019 re-election of President Jokowi.
Hotel Market Performance:
By Rate Segment
- Luxury (USD >300):
- Occupancy: Increased by 9 points to 67%.
- ADR: Decreased by 14% to IDR 6,437,000 (USD 454).
- RevPAR: Flat at IDR 4,293,000 (USD 302).
- Upper Upscale (USD 151-299):
- Occupancy: Increased by 1.5 points to 71%.
- ADR: Decreased by 12% to IDR 2,609,000 (USD 187).
- RevPAR: Decreased by 11% to IDR 1,841,000 (USD 132).
- Upscale (USD 101-150):
- Occupancy: Stable at 72%.
- ADR: Decreased by 1.9% to IDR 1,747,000 (USD 123).
- RevPAR: Decreased by 2.1% to IDR 1,263,000 (USD 89).
- Midscale (USD 50-101):
- Occupancy: Stable at 75%.
- ADR: Decreased by 6% to IDR 1,007,000 (USD 71).
- RevPAR: Decreased by 7% to IDR 758,000 (USD 54).
By Location
- Kuta/Tuban and Legian/Seminyak: Highest occupancy at 75%, with ADRs of USD 81 and USD 138 respectively.
- Jimbaran/Uluwatu: Highest ADR at USD 289, with occupancy at 69%.
- Ubud: Lowest occupancy at 64%, but an ADR increase to USD 270.
- Nusa Dua/Tanjung Benoa: ADR decreased to USD 128 with a stable occupancy of 73%.
Future Developments
The Bali hotel market is expected to add at least 21 new 3-star and above hotels, totalling approximately 3,700 rooms over the next five years. Most of these developments are concentrated in West and South Bali, targeting 4-star and 5-star segments.
Real Estate Market
Bali’s real estate market remains complex, with challenges such as the country’s disruptive tax amnesty program and volcanic eruptions affecting stability. There are over 1,600 units in seven hotel-branded projects on hold or cancelled, including brands like Mandarin Oriental and Jumeirah.
Key Trends
- Domestic Buyers: Predominantly prefer freehold properties, representing over 50% of transactions.
- International Buyers: Focused on leasehold properties from Australia, North America, and Europe.
- Popular Areas: Canggu and Berawa for expats and digital nomads, with Seminyak, Uluwatu, and Jimbaran remaining attractive.
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