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An Oversupply of Accommodation in Bali

Bali Hotel and Restaurant Association Says 100% Oversupply of Rooms Sets the Stage for Unhealthy Price Competition.

(3/9/2010) The Bali chapter of the Indonesian Hotel and Restaurant Association (PHRI) views that the number of starred hotels, melati-class hotels, and tourism cottages in Bali far exceeds demand.

As reported by Beritabali.com, the total number of accommodation rooms in Bali is more than 55,000 - a number the PHRI thinks exceeds by more than twice the needed supply of 24,000 rooms.

The Chairman of the Bali PHRI Chapter, Cokorda Oka Sukawati, said the current supply of 55,000 rooms does not yet include villas and local inns (penginapan). Cokorda is worried that the current dramatic over-supply in tourist rooms will eventually result in a price war, reflected in the fact that many rooms in Bali are being sold for Rp. 150,000 (US$16) per night.

"The price is only an average US$15 (sic); all hotels have their own market. But hotels that have a price of US$800 could be reduced to US$200," explained Cokorda who also serves as the Regent of Gianyar.

Cokorda said the over-supply in rooms is most evident in areas such as Candidasa in Karangasem and Lovina in Buleleng. Hotels in this area, according to Cokorda are being sold with very low prices.