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Seeking a Truce in Time of War

Bali Governor Calls for an End to Hotel Price War

(7/8/2012) Bali’s governor Made Mangku Pastika is warning Bali Hotels to immediately end an incipient price war, saying such activity will only serve to cheapen Bali’s tourism image and thwart efforts to recruit quality tourists to the island.

The growing range of cheap accommodation in Bali, according to the governor, is turning Bali into a mass tourist destination. Moreover, Pastika blames the lack of clear pricing standards for hotels is causing luxury hotels to be sold at prices that are too low.

‘For instance,” said Pastika to Bertiabali.com on July 6, 2012, “a 5-star hotel should not be sold below a specific price, 4-star hotels should have a set price, and the government could base its tax calculations on these set prices. For example a 5 star hotel could be US$400 dollar and if they sell it for US$200, then go ahead, the hotel will only suffer (a higher tax rate).”

Pastika also admitted that the increasing and uncontrolled construction of new hotels has also contributed to the current price war and the ever-declining cost of a room in Bali.

Data from the Bali Hotel and Restaurant Association (PHRI-Bali) estimates that Bali has 65,000 official hotel rooms.