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When High Season Becomes Shoulder Season

Hotels and Villas in Bali Claim Occupancies for July-August 2014 are Down by as much as 15%

(7/25/2014) Reflecting the result of the government’s laissez-faire approach to the issuance of permits for new hotels, condotels and villas in Bali, accommodation providers are reporting lower-than-usual occupancies during the typically peak season of July-August.

DenPost reports that while hotels and villas can typically expect to average 80% or higher occupancies during these months, many companies are reporting much lower occupancies than last year.

The chairman of the Bali Villa Association (BVA) for Badung regency, Gede Sukarta, on July 24, 2014, confirmed that occupancies have declined significantly. “Actually, the expectation is that in the month of July occupancies can hit 85%, but the fact is that hotels are generally averaging only 60% occupancy. Meanwhile, villas are averaging 65-70%,” said Sukarta.

When asked the reason for lower levels of occupancy at accommodation providers, Sukarta blamed the increase in new hotels and villas in Bali and a tendency for domestic tourists to now take their holidays abroad.

Sukarta said occupancy levels are running around 15% lower than projected during the July-August peak season. He called on the government to undertake an aggressive promotional program in key overseas markets.

He also highlighted the problem of security as having a deleterious effect on occupancy levels in the regency of Bandung, including the fraud practiced by many moneychangers against visiting tourists.

Also commenting was the chairman of the Indonesian Hotel and Restaurant Association (PHRI) for Badung, Agung Rai Surya Wijaya, who pegged hotel occupancy at 63%, blaming the government’s failure to control the number of new rooms coming onto the market.

Rai Surya estimates that the overall growth in both domestic and foreign tourists to Bali is 9%, a number outdistanced by a 13-14% annual growth in new rooms coming onto the marketplace.

He urged the urgent implementation of rules governing the construction of new hotels, requiring minimal use of land and discouraging the building of low-cost hotels.

He warned that overbuilding results in lower rates, less taxes paid to the regency and lower wage levels for the Bali residents working in the hotels.