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Rooms to Spare, And then Some

Baliís Leaders Urged to Enforce a Moratorium on New Hotel Permits

(1/12/2014) Bali Daily (The Jakarta Post) reports that The Indonesian Tourism Association (GIPI) is once again calling on the local governments in Bali to urgently implement a hotel moratorium in order to halt the rampant overdevelopment now underway on the Island.

The chairman of GIPI-Bali, Ida Bagus Ngurah Wijaya, said: “Many tourists complain about the current condition of Bali. Too many buildings make them feel uncomfortable, as it is too crowded. Buildings are everywhere and it is hard to find green areas.”

The Association is calling for the long-discussed moratorium to be implemented in 2014 in order to stem the rapid growth in starred hotels, non-starred hotels, villas and guesthouses.

While accurate figures apparently do not exist, it is estimated that 90,000 accommodation rooms exist across Bali’s south, far outstripping demand.

Wijaya added: “We are facing an oversupply of accommodation in Bali. The government should take real action as the oversupply is also causing a price war, with customers being offered inexpensive hotel rates. If the government has no policy, Bali will become a cheap holiday destination.”

Wijaya complained that the high rate of development is causing Bali’s cultural identity to be compromised.

Bali Governor Made Mangku Pastika called for a moratorium on new hotels in Badung, Gianyar and Denpasar in 2011 - a pronouncement ignored by the heads of local governments in Bali who have continued to issues licenses and permits at an unprecedented rate.

Claiming the need to increase the local tax base as their justification for granting new hotel permits, the Regents refuse to address the inherent corruption of the Hotel and Restaurant tax collection system, estimated by some sources to under collected by as much as 60%. Were taxes more fully collected in Bali, the raison d'être for granting new hotel permits would cease to exist.

Also unconsidered by the Regents is the zero-sum game of increasing the number of taxable rooms when that results in drastic drops in room rates and room taxes.

Governor Pastika remains ready to implement a moratorium on new hotel but unless the provincial government’s approval becomes needed to build a new hotel, such a moratorium will continued to be ignored by the regencies.