The vice-chairman of the Bali chapter of the Indonesian Hotel and Restaurant Association (PHRI-Bali), Nyoman Suwidjana, has told Bali Post that the onslaught of new hotel rooms in Bali is far outstripping any increase in visitor numbers.
"The total number of rooms is tending towards oversupply and that is affecting hotel tariffs. This threatens the Bali tourism industry that is already underpriced, placing further pressure on pricing," said Suwidjana on Monday, January 20, 2014.
The PHRI official said the uncontrolled growth in new hotels in Bali is causing larger, new hotels to indulge in practices that steal existing market shares once enjoyed by small hotels, many of which are owned by local Balinese.
Elaborating further, Suwidjana said: "The local hotels have been operated from the beginning by local owners who have made many contributions to the growth of Bali tourism. Now the continued existence of hotels owned by local people is threatened with displacement by hotels owned by investors from outside Bali."
Suwidjana described the current market condition as the equivalent of "cannibalism."
This effect of unbridled hotel growth was confirmed by the Honorary Consul of Russia in Bali, Chairul Nuku Kamka, said visitors are now able to obtain discounts on every class of hotel in Bali.
Kamka called on the government to reduce the number of permits granted for new hotels. "It's pointless to have so many hotel rooms in Bali when many of those rooms remain empty. When rooms are empty, the hotel's management will be unable to provide for the welfare of their employees." he said.
The Russian Honorary Consul said permits for new hotels must be based on careful surveys on the number of tourist arrivals to Bali.
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