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The Deepening Villa Crisis

Gianyar Joins Badung in Steps to Tighten Control on Villa Operations. Villas a Drain on Much-Needed Foreign Exchange.

(10/8/2007) Bali's Badung Tourism Office has 276 unlicensed villas in its cross-hairs as it moves closer to the promised final crackdown on illegal commercial villa operations in the Island's south.

According to the Bali Post, the Head of the Badung Tourism Service, I Made Sumbawa, said his office is working together with sub-district offices in contacting the errant villas and warning them of the looming dire consequences of their continuing refusal to operate in accordance with local laws.

If, according to Sumbawa, the villas are still unregistered on December 31, 2007 his office will commence the process of presenting three written warnings as a prelude to the sealing and close-down of the unregistered villas.

Current data indicate 711 villas exist in the Badung regency of which 229 are licensed, 300 are unlicensed and 182 used as private residences.

Villa Crackdown Now Spreading to Other Regencies?

In a separate report in the Bali Post, authorities in the Gianyar regency also appear to be taking the problem of unlicensed villas into hand. A recent raid carried out on 4 villas near Sukawati saw tourists staying at the subject locations rousted from their accommodation to receive an unscheduled visit by officials from tourism, law enforcement, and the Gianyar Regency.

The team issued formal summons to all villas found to be unlicensed, with some of the illegal dwellings unable to produce even basic building and water-use permits.

Gianyar officials estimate there are 420 villas in their regency, only 70 of which have operating permits.

Lost Foreign Exchange From Villa Operations

NusaBali reports that data from Bank Indonesia (BI) shows the number of visitors staying outside hotel settings during a Bali holiday has risen from 5.9% in 2005 to 10%in 2007. BI estimates that villa operations are costing Bali an estimated Rp. 3.2 billion (approximately US$348,000) each day in lost foreign exchange earnings.

The Chairman of the Bali Chapter of the Indonesian Hotel & Restaurant Association (PHRI), Tjok Oka Artha, complained that Bali's rising tourism numbers are not necessarily translating into a corresponding increase in hotel occupancy. The PHRI Chairman said that many guests are not staying in hotels and those who do are staying for much shorter periods of time than was the case in the past.

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