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Boom or Bust

Will Bali Tourism Boom with Arrivals Over Christmas & New Years 2012-2013?

(12/14/2012) Whether or not Bali will be filled to overflowing with tourists over the Christmas – New Years holiday period 2012-2013 remains to be seen and could depend, in large part, on whether or not Bali welcomes a bumper crop of domestic travelers.

Internationally, Bali will end the year with a record number of foreign tourists. An estimated 2.8 million foreign tourists will have visited Bali in 2012. At the same time, the growth in foreign tourists to Bali is slowing with single digit monthly growth recorded where once double-digit development was the norm.

With the U.S. economy, teetering at the edge of a fiscal cliff, and European economies generally in to doldrums, the flood of European arrivals over the holidays may be post-diluvium in proportions.

A flood of another kind, however, will affect occupancy rates at major hotels and villas: the torrent on new hotel rooms from new hotels and villas who have rushed to open in time for the holiday rush. Reflecting this trend is that rooms appear to be generally still available at many hotels; the readiness of many hotels to drop the mandatory Christmas and New Year’s dinner;  and daily torrent of email reminders of special rates available over the holidays.

A Domestic Situation

Whether or not Bali booms with tourists over the 2012-2013 holiday period will depend largely on the number of domestic tourists that flock for a year-end retreat on the island.

Airport authorities are expecting a 30% increase in domestic arrivals with domestic carriers expected to lay on additional flights to meet demand. The number of daily flights landing at Ngurah Rai Airport will increase to 305 per day, up from 298 during “normal” flight periods. This translates to an average of 13 flights every hour handling 35,000 domestic and foreign passengers every day.

Concerning, however, is the fact that Ngurah Rai Airport authorities say they have yet to received any formal requests for additional flights from the domestic carriers serving Bali.

On the plus side for those hoping domestic tourism will buoy a holiday rush is the general strength of the Indonesian economy, among the most robust in the region. But, at the same time, changes in tax laws that have removed a burdensome “fiscal exit tax” that now means that other international destinations in the region offer less expensive holiday options than Bali to the large Indonesian domestic market.

Will Bali have a busy holiday period? Stay tuned, this may prove to be interesting.