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Blueprint for Disaster

PHRI Official Blames Government for Oversupply of Hotels; Wants New Hotels to Limit Time Validity for Special Price Offers

(8/13/2012) The secretary of the Bali chapter of the Indonesian Hotel and Restaurant Association (PHRI-Bali) has reminded hotels in Bali, particularly new hotels, to limit the validity period of special price promotions.

The secretary of the PHRI-Bali, Perry Markus, speaking at a tourism competency certification program in Kuta, Bali on Thursday, August 9, 2012, declared that special promotional prices in effect for more than one year at new hotels would eventually result in an unwanted price war among all Bali hotels.

Quoted by Bertiabali.com, Markus also called on the government to stop granting permits for new hotel developments in Bali.

Markus warned: “If were talking price competition, it is, in fact, the government that has created this situation. It is the government that grants licenses to new hotels. It the law of the marketplace that in periods of low demand and over supply the prices must go down. We’ve warned that there are enough hotels, but if new permits continued to be granted (by the government), prices will continue to fall.”

Perry Markus said the growing number of hotels in Bali has caused hotel occupancies to decline. He said proof of this situation could be found in observing that previously, during holiday high seasons the occupancy of hotels averaged above 80%. But, now, occupancy of many hotels during holiday periods averages below 80%.

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