TRIBUN-BALI.COM reports that many working in the Island’s tourism accommodation sector are complaining that despite strong foreign tourist arrival numbers, hotel occupancies are on the decline.
For January-February 2025, foreign tourist arrivals totaled 1,013,700, originating from 20 countries.
So, where are these foreign tourists staying in Bali?
Suspicions abound that many foreign tourists are staying at homestays and villas, sometimes managed and marketed by international brands.
The chairman of the Indonesian Hotel and Restaurant Association (PHRI), Tjokorda Oka Artha Ardhana Sukawati (Coke Ace), identifies villas and homestays as a form of accommodation, which historically first emerged in Ubud Village during the 1950s. Over time and in response to changing market conditions, villas and homestays have developed into a popular and much-in-demand form of tourist accommodation in Bali.
Coke Ace, from Ubud, explained on Wednesday, 16 April 2025, that the provincial administration has created regulations governing the operation and management of homestays and villas. From an economic perspective, Cok Ace says the private villa and homestay sectors are important to the local community and development.
Economically, said Cok Ace, this is a form of business that is very helpful to the community and is an example of community-based tourist development.
Over time, many homestays that outside interests have acquired are no longer owned or managed by the local community.
Commenting further, Cok Ace said that foreigners who deviate from or do not embrace the concept of community-based tourism are flourishing, supported by international networks and large capital. In some instances, these accommodation operators have become predators abusing small people-based businesses. Meanwhile, large hotels suffer even though they are fully licensed and regular taxpayers.
Many homestays and villas in Ubud, Sanur, and Kuta compete, stealing bookings from legitimate large hotels.
“But when homestays enjoying lower tax rates are luxury villas, their existence does disturb large licensed hotels. Cok Ace says all players, great and small, must follow the rules and regulations regarding licensing, spatial planning, market segments, and rates. According to the PHRI Chairman, this is needed to help balance supply and demand dynamics.”
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