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Bali is Choking on its Own Success

Senior Tourism Leader Warn That Survival at Stake in Baliís Current Oversupply of Accommodation

(8/17/2012) Bali Daily (The Jakarta Post) quotes a Bali tourism industry veteran, Anak Agung Gede Rai, blaming declining occupancy rates of between 60 and 65% on the uncontrolled growth in hotel rooms.

Moreover, Rai says the state of lowered occupancy among Bali hotels has rendered the hotel business “quite unprofitable” and, as a result,  threatens the very survival of many members of the hotel industry.

Rai, who manages at Masari Villa and once served as the President Director of the Bali Tourism Development Corporation (BTDC), says an excess of rooms in star and non-starred hotels, and villa segments have contributed to an over-supply of accommodation that is depressing both hotel rates and occupancies.

The senior travel professional expressed his dismay that Bali, despite strong arrivals, was actually experiencing a business downturn. He said that average occupancies of at least 70% were needed for most hotels to remain profitable and be economically sustainable.

The rate war now underway, according to Rai, makes business survival for hotels in Bali problematic.