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A Critical Over-Supply of Hotel Rooms in Bali

Chairman of BTB Claims Many of Bali's Current Problems Can be Traced to Too Many Hotel Rooms Chasing Too Few Tourists.

(1/27/2007) Tempo Interaktif reports that Bali currently has a severe over-supply of hotel rooms contributing to increasingly unhealthy competition among the Island's hotels.

The Chairman of the Bali Tourism Board (BTB), Bagus Sudibya, told Tempo that average occupancies stand at only 30%, covering an estimated 52,000 hotel rooms used by the 3,000-4,000 tourist who arrive from overseas every day and stay for only 4-5 days.

The BTB Chairman estimated that many hotels can only cover their operational costs when occupancies reach 40%. Faced with urgent needs for cash, Sudibya explained, many hotels are discounting their rates together with the level of service extended to visitors.

A Coming Social and Ecological Crisis?

Sudibya warned of growing sociological and ecological damage in Bali. New Hotels, including villas, are typically built in residential areas putting land use pressure on local populations who sacrifice productive acreage to meet demands "for the perfect view." This development is being undertaken with little regard to the carrying capacity of local water and electrical supplies.

The Head of the Bali Tourism Authority, Gede Nurjaya, said that while Baliís Governor has issued a circular memo to local regents forbidding the construction of new hotel projects. "Unfortunately, many have ignored the Governor's order," lamented Nurjaya.