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Minister: Freeze New Accommodation in Denpasar & Badung

Over Supply of Accommodation Reaches Critical Stage in Bali.

(4/28/2007) Indonesia's Minister of Culture and Tourism, Jero Wacik, recently told a business meeting in Bali that the construction of new accommodation in Badung and Denpasar must come to an end with current rooms on offer far exceeding market demand.

Quoted in the Indonesian-language BisnisBali, Wacik said, "stop the building of tourism accommodation in Badung and Denpasar." He said the Government must stop giving new permits for new accommodation in these two areas of the island as the current over-supply in rooms is creating unhealthy competition. Moreover, according to the Minister, the hundreds of unlicensed villas are increasing stealing a share of the hotels' business resulting in the anomaly of lower hotel occupancies in the face of growing tourist arrivals numbers.

The Minister urged investors to build new accommodation in Singaraja, Karangasem or Negara, but not in Badung or Denpasar.

Separate Demand for Island-Wide Halt to More Accommodation

In separate comments, the Head of the Indonesian Chapter of the Indonesian Hotel and Restaurant Association (PHRI). Ir. Tjok Oka Artha Ardhana Sukawati said new accommodation development should be halted across the Island.

According to Sukawati, the "real" occupancy level of Bali hotels now averages around 30%, meaning Bali has a 60% over capacity of rooms. He went on to explain that based on an estimated 52,000 available rooms in Bali, one can extrapolate an annual availability of 18 million available room nights against an estimated current demand of 3.8 million room nights.