Bali to Face Tough Competition from Lombok

(5/18/2008)

An article in Nusa Bali has spotlighted growing concerns that a tourism mega-project on the nearby island of Lombok, currently being developed by the Bali Tourism Development Corporation (BTDC), may represent strong future competition to Bali.

Located in the southern part of the island, the Lombok project is being financed by an U.A.E. company, Emaar Properties at an estimated project cost of US$600 million.

'Become a Tourism Destination Like Bali'

Emaar Properties' commitment to developing business links in Indonesia is evidenced by the recent opening of a representative office in Jakarta, established to help the U.A.E. investors identify wider business opportunities in Indonesia. At an opening ceremony of the Jakarta office, the Chairman of Emaar Properties, Mohamed Ali Alabbar, told the press: "the representative Emaar Properties office in Jakarta will allow our company to identify new growth opportunities in Indonesia. It will also ensure that our Lombok project stays on schedule and realize its potential to become a tourism destination like Bali."

Emaar Properties is one of the largest real estate companies in the world and listed on the Dow Jones Arabia Titans Index.

The Lombok Project will cover an area of 1,175 hectares located on Lombok's Kuta Beach and consume a stretch of 17 kilometers of beach front. The project will include a marina, luxury private accommodation and 5-star resorts.

Emaar Properties Group

The portfolio of the Emaar Properties Group includes projects in a number of nations including the U.A.E., Saudi Arabia, Jordan, Syria, Lebanon, Morocco, Turkey, Libya, Algeria, India, Pakistan, the U.S.A., Great Britain, France, Canada and Indonesia. The company is a 30% shareholder in the Dubai Bank and the largest shareholder in Amlak Finance, the largest lender for Islamic housing in the United Arab Emirates.

The President Director of the BTDC, I Made Mandra, confirmed plans to develop the Lombok site in cooperation with Emaar Properties and that an extensive feasibility study is now underway prior to a formal commencement of the project in late 2008 or early 2009.

Lombok as Indonesia's New Major Gateway

Mandra projects that the Lombok project will begin welcoming guests in three year's time to a collection of 5-star properties and deluxe villas with a main market focus on tourists from the Middle East. With the opening of Lombok's new airport at Penujak in Central Lombok, guests will be able to fly directly to Lombok.

The first phase of the Lombok project site calls for the construction of two 5-star hotels and a number of villas. Further development of the Lombok site, which is 4 times larger than the Bali BTDC site, will take place in the coming ten to twenty years as market conditions permit. Madra dismisses concerns that Bali could eventually lose market share to Lombok because of the new project, insisting that each island possesses its own unique charm and distinctive culture.

Once Lombok's new Penujak International Airport is opened it will boast a runway 4,500 meters long and able to accommodate the latest generation of jumbo jets. Bali's Ngurah Rai International Airport, on the other hand, is only 3,000 meters long with plans to extend the runway thwarted by a variety of environmental and cultural issues.