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Bali Legislators Protest Tune Hotels Entry into Local Market

Tune Hotels Poor Environmental Policies and Destructive Pricing Policies Labeled Bad for Bali by Local Lawmakers.

(12/28/2009) Following accusations leveled by Kuta residents and widely reported in the Bali press that the newly opened Tune Hotel on Jalan Ciung Wenara in Kuta was contaminating ground water with fuel oil [See: A Discordant Tune], the two low cost hotels in Bali affiliated with AirAsia have come in for more sharp criticism, this time by local legislators who question both the hotel's environmental practice and its destructive impact on the market mechanism.

Quoted in Bali Post, I Wayan Puspa Negara, a member of the Badung House of Representatives (DPRD-Badung), alleged that a second Tune Hotel in Legian was "of a five star standard" but offering prices as low as Rp. 230,000 (US$23) a night which compete with locally owned and operated "Melati class" hotels. Said Puspa Negara: "The Tune Hotel is five star class, but is selling at prices cheaper than Melati class properties. That is what you call unhealthy competition. Whatever the reason for this, even in the name of promotion, this is unacceptable. Five star hotels should not sell below a minimum promotional price of Rp. 500,000 to Rp. 600,000."

Balinese tourism leaders are concerned that the low price approach of Tune Hotels - who brand their properties as "no-frill" hotels, will destroy Melati hotels owned by local businesspeople and destroy the normal market mechanism. "Don't let the foreign investment sector run riot and destroy local investments in the process," said Puspa Negara.

For at least the Tune Hotel operating at Jalan Ciung Wenara, Puspa Negara is calling for their operating permits to be withdrawn for violations of local environmental standards until such a time as the owners are prepared to obey local rules.

Another member of the DPRD-Badung, A.A. Anom Guamanti, said the Tune Hotel has also violated the coefficient zoning rule which requires 40% of any building project's land be kept open to for gardens can absorb rain water that replenish ground water reservoirs.

Both legislators are calling on the Badung Tourism authority and the Indonesian Hotel & Restaurant Association (PHRI) to take firm action against Tune Hotels in Bali to halt violations of the law.

In year's past, Melati class hotels were the more-or-less exclusive preserve of local entrepreneurs, offering low investment and minimum regulated access to the indigenous investors. Over the past several years, however, rules for low-cost accommodation providers have been manipulated creating loop holes for foreign investors building seeking to build low cost hotels or luxury villa developments.

Related Articles

[Two Tune Hotels Set to Open in Bali]

[Air Asia to Build Pay-as-You-Go Hotels in Indonesia]

[Editorial: Out of Tune in Bali]