NusaBali.com reports the growing concern of the Bali Chapter of the Indonesian Hotel and Restaurant Association (PHRI-Bali) and the striking anomaly of increasing tourist arrivals against an 8% decline in hotel occupancies and a corresponding decline in tourism tax revenues.
The chairman of PHRI-Bali, Tjokorda Oka Artha Ardana Sukawati (a/k/a Cok Ace), speaking at the appointment of the Association’s new board for the period 2025-2030, on Friday, 23 January 2026, confirmed that the target of 6.5 million foreign arrivals for 2025 has been surpassed with a final count of more than 7 million visitors.
”Viewed statistically, visits increased by around 10.2 percent compared to the previous year. However, hotel occupancy rates actually fell by around eight percent,” said Cok Ace. The drop in occupancy directly impacts regional tax revenues. The PHRI chairman cited examples of regional tax revenues in several regencies/cities, including the Badung Regency, that fell short of targeted collections. From a target of around Rp. 9 trillion, realization was far below that figure. Bali’s tourism sector is facing its biggest challenges in the Island’s history. While tourist arrivals continue to increase, hotel occupancy and tax revenues are on the decline.
In the past, Bali has weathered multiple criseses, including global conflicts, the 1998 economic collapse, the Bali Bombings, the eruption of Mount Agung, and the Covid-19 pandemic. However, the current situation is proving especially problematic. “Previously, no matter how severe the crisis, we were still confident that tourism would recover within two to three years. Bali’s main assets, namely culture, people, and nature, were still strong. But now, those two pillars are starting to erode,” the PHRI chairman observed.
Coke Ace is perplexed by the statistical anomaly of the current situation. While tourists are arriving in record numbers, they apparently are not staying in starred hotels or using formal tourism services. Moreover, current business activities are not being optimally recorded. One factor highlighted is the rise in the number of unlicensed accommodation providers and villa rentals on digital platforms, many of which are not officially registered. The resulting situation creates unfair competition between the new “informal sector” and licensed hotels and tourism businesses.
The Bali Provincial Government is currently seeking to enhance regulatory oversight of Internet-platform-based accommodation businesses, ensuring all businesses are licensed and registered with tourism associations and that these properties contribute to regional tax collections. Tourism stakeholders remain hopeful that new policies to control digital platforms and crack down on illegal villas will improve the general community’s welfare and regional tax revenues.
This is taking place against a background of growing public resistance to tourism investment in several areas. This is being driven by the increasingly limited living space due to land conversion for villas and tourist accommodations. Environmental damage also represents a serious threat. Bali is estimated to lose nearly 1,000 hectares of productive land annually due to uncontrolled development, including villas with ambiguous use permits. If this situation is allowed to continue, Bali is feared to face an even more severe tourism crisis by 2030, not due to a lack of tourists, but due to declining environmental quality and evaporating local community support for tourism.
In response, the Bali Provincial Government is preparing control measures, including mandatory licensing for all accommodations now marketed through digital platforms and mandatory membership in tourism business associations. As unlicensed accommodation providers face being blocked from online platforms, industry players hope that these policies will be strictly enforced and that Bali’s tourism development eventually returns to prioritizing sustainability, environmental protection, and support to local communities.
Cok Ace highlighted growing public resistance to tourism investment in several areas. This is driven by the increasingly limited living space due to land conversion for villas and tourist accommodations. Environmental damage also poses a serious threat. It is reported that Bali loses nearly 1,000 hectares of productive land annually due to uncontrolled development, including villas with unclear permits. If this situation continues, Bali is feared to face a more severe tourism crisis by 2030, not due to a lack of tourists, but to declining environmental quality and local community support.
Meanwhile, Tjokorda Oka Artha Ardana Sukawati, better known as Cok Ace, has now been officially inaugurated for the fifth time as chairman of PHRI-Bali for the period 2025-2030. He pledges that his upcoming term will focus on improving the quality of tourism governance. Cok Ace stated that this inauguration marks an important moment to continue work on several unfinished tasks in Bali’s tourism sector, particularly in the wake of the COVID-19 pandemic.
”In terms of numbers, tourist visits have exceeded targets, even increasing by more than 10 percent. However, what is concerning is that hotel occupancy rates have actually fallen by around eight percent, and regional revenue from tourism has not yet reached targets,” said Cok Ace. The PHRI-Bali Chairman observed that this situation indicates an imbalance exists between the surge in visits and the economic benefits received by regions and formal tourism businesses. One cause is the proliferation of unlicensed accommodations operating through digital platforms.
Speaking at the PHRI-Bali inauguration ceremony, the chairman of the Indonesian Hotel and Restaurant Association (PHRI-Indonesia), Hariyadi B.A. Sukamdani, underlined the importance of improving the quality of Bali’s tourism destinations and services, given its position as a leading global tourism destination. Sukamdani noted that at various international tourism exhibitions, including the World Travel Market (WTM) in London, Bali remains the most frequently inquired-after destination by tourists and industry players. “If Bali’s quality declines, the impact will not only be on Bali, but also on Indonesia’s tourism image as a whole,” he said.
Nationally, PHRI encourages strengthening the accommodation permit verification system, including integration with the police foreigner reporting system and cross-agency collaboration, to ensure tourism businesses operate in accordance with regulations.
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