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70% of Bali Villas Illegal

More on the Ongoing Crackdown on an Estimated 458 Illegal Villas Now Operating in Bali's Badung Regency.

(7/10/2007) Tempo Interaktif reports that an estimated 70% of villas in Bali operated commercially do not have the required permits and licenses. In the Regency of Badung, where most villa development is centered, only 253, or approximately 35%, of the 711 villas recently surveyed can be considered legal operations.

The Head of the Government Tourism Service for Badung Regency, Made Subawa, told Tempo that illegal villas were causing losses in local tax revenues and that his office was now involved in an "intensive crackdown" on illegal villas.

A memorandum issued in May by the Regent of Badung, A.A. Agung, gave an absolute deadline of August 29, 2007 for completion of the "fast-track" registration and legalization of wayward villas without fear of undue sanctions. That same memo underlined that some illegal villas, such as those built in designated green zones, would not be legitimized and would eventually be slated for demolition.

Subawa said that the illegal villa owners were generally taking advantage of the current grace period, with 2-3 villas completing the application process each day. The Badung tourism boss is confident that the current process will result in substantial increases in local hotel and restaurant taxes, worth an estimated Rp. 250 billion (approximately US$28 million) in 2006.

Current regulations allow simple registration of villas with less than 5 rooms to gain certification as "tourism cottages" or "Pondok Wisata."

The Chairman of the Bali Villa Association BVA, Ismoyo S. Soemarlin, has stated his support for the Badung Regent's campaign to rationalize the registration of commercial villas.

Ismoyo is also hopeful that the formal registration of villas will allow an eventual standardization of service standards among villa operators.

Ismoyo told Tempo that while many operators of illegal villas claim their villas are private residences, it is relatively easy to track down those villas being operated commercially via their promotion on the Internet and through the first-hand observations of local banjars.

The BVA Chairman said that the growing demand for villa accommodation in Bali makes regulations to control this sector increasingly important. Research carried out by the BVA shows that occupancy rates at villas continue to climb, with an estimated 25% of all foreign visitors expected to stay at villas in 2007.