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Stopping the Building Craze in Bali

Efforts Underway in Several Areas to Freeze New Hotel Developments in Bali. Hotel Association Calls for Destruction of Illegal Villas.

(9/20/2010) The provincial government of Bali continues to weigh implementing a moratorium or complete freeze on the construction of new hotels in the regencies of Denpasar, Badung and Gianyar.

According to Beritabali.com, the renewed interest in the moratorium follows a call from the Bali chapter of the Indonesian Hotel and Restaurant Association (PHRI) for an end to new hotel projects in Bali.

On September 16, 2010, Bali's governor Made Mangku Pastika told the press that the plans for a moratorium on new hotels in Badung, Denpasar and Gianyar was also based on the fact that the number of available hotel rooms in these three areas has far outstripped demand. By closing new investments to hotels in Bali's south, the governor hopes to equalize and fairly distribute the development benefits of tourism in Bali by encouraging future investment in the more distant regencies of Buleleng, Bangli, Karangasem and Jembrana.

Pastika said that if academic and technical reviews now underway support it, his office would send a letter to the Minister of Culture and Tourism and the Investment Coordinating Board (BKPM) to close investment to new hotels in the three southernmost regions of Bali.

Pastika explained, "we can stop the new hotel investment via a request from the Ministry of Culture and Tourism and BKPM." Pastika also expressed the hope that the applicable regents would support the moratorium.

Pastika did not rule out the possibility that plans for a moratorium on new hotels could also be embodied in a provincial law.

According to data provided by the PHRI, Bali is over-supplied with a total of over 56,000 hotel rooms. Perry Markus, Secretary of the PHRI in Bali, quoted in The Jakarta Globe, estimates there are at least 17,000 unregistered and illegal hotel and villa rooms in Bali.

Call to Get Tough

Beritabali.com, in a separate report, quotes Markus as calling for a tough crackdown on illegal villas in Bali, saying the time has come to shut down these illegal operations.

Blaming the illegal hotel and villa operations in Bali as being at the root of poor occupancies, Markus accused illegal villas as ruining Bali's international tourism image by oftentimes providing poor service and creating unhealthy price competition.

Markus said the government must show courage and take firm measures by closing illegal accommodation providers including the demolishing of illegal villas and bungalows. "It now all depend on the government who are in control, will they only bring these businesses into line and will they go as far as tearing them down?" asked Markus.

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