Developing new Bali’s

Indonesia wants to develop 10 new Bali’s. Problem is, investors still can’t get enough of the real one.

Mount Bromo, East Java, Indonesia

With 15 million arrivals expected this year, and 20 million by 2019, Indonesia believes the need to spread tourism beyond Bali has become more critical.

As pointed out by tourism minister Arief Yahya, of 34 provinces in the country, Greater Bali gets 40 per cent of international arrivals, Greater Jakarta 30 per cent and Riau Islands 20 per cent.

Mount Bromo, East Java, Indonesia

The 10 new destinations the ministry hopes to nurture as new Bali’s are Lake Toba (North Sumatra), Tanjung Kelayang (Belitung), Tanjung Lesung (Banten), Kepulauan Seribu (Jakarta), Borobudur (Jogjakarta-Solo-Semarang, Central Java), Mount Bromo (East Java), Mandalika (Lombok), Komodo National Park (East Nusa Tenggara), Wakatobi National Park (Southeast Sulawesi) and Morotai (North Maluku).

It’s been a long try. The government has, for instance, given a Special Economic Zone status to places such sa Tanjung Lesung, Mandalika and Morotai, enticing investors to develop infrastructure there. But, take Lombok’s Mandalika project – fact is, it has not taken off in over a decade.

While players such as AccorHotels, Archipelago International, Santika Indonesia and Sahid Hotels have entered some of these destinations, a hospitality investment conference held in Jakarta last May revealed that many investors still see Bali and Jakarta as fertile grounds.

Kevin Wallace, managing director Asia-Pacific of Dream Hotel Group, said: “I don’t think Bali is saturated. Tuban and Sunset Road perhaps yes, but we are looking at Pecatu and Canggu – beautiful up there.”

MNC Land, which has a huge project on a 110ha land near Tanah Lot temple, also believes Bali is still feasible. In partnership with Trump Organization, it is redeveloping the former Pan Pacific Nirwana Bali Resort in Tuban into a “six-star” hotel and redesigning the golf course there.

Ivan Casadevall, MNC Land’s deputy COO hospitality, said: “We are going into Bali but way out of where everything is happening. The toll road is not even close to start being built. It takes a little bit of longterm vision.”

But Indonesian travellers actually do look for new destinations in the country. Erastus Radjimin, CEO of Artotel Indonesia, said: “For Indonesians, especially my (millennial) generation, we are bored with Bali. It is interesting to see what is being promoted in these 10 destinations.

“However, at the end of the day, it will be back to infrastructure development, which is more important than promotion (at this stage). When you have good infrastructure, everybody will start coming in, we will see good asset value – the developers will automatically come.”

Matt Gebbie, director of Horwath HTL Pacific Asia, said there are clients, mostly Indonesians and some mainland Chinese, that are looking for destinations other than Jakarta and Bali. But most are small-scale investments.

Gebbie said: “The islands around Bali (such as Lombok and Labuan Bajo, gateway to Komodo Island) are talked about more, but plots that have been sold are small.”
Wallace questioned if it was not wasteful to spend money opening as many as 10 new destinations. “Why not choose just three or four and do those well?”

Better still, focus on the domestic market, he added. “I think the real game here is where the Indonesian market wants to go, how to stop them from going to Singapore,” he said.

Samudra Hendra, owner of Milestone Pacific Hotel Group, Indonesia, which operates hotels in many cities in Indonesia, said he focuses on business rather than leisure hotels and goes “where new infrastructure developments are, even if those are in destinations like Purwokerto, Tegal or Cilacap (Central Java)”.

“I will rush and open a hotel there and make money, well, at least until others follow,” he said.

Hiramsyah S. Thaib, team leader of the acceleration for the development of priority tourism, Ministry of Tourism, said infrastructre development isn’t the responsibility of the ministry alone.He said the transport ministry and airport authorities are developing airports, while the public works ministry has worked with the World Bank for a loan to develop roads. Indonesia’s financial institutions too are providing loans for hostels and homestays, while the education ministry is lending its hand on human resource training.

Citing an example, he said Silangit Airport near Toba was reopened last year declared an international airport last month.

Travel time between Jakarta and Toba has been cut down to two hours with a direct Jakarta-Silangit flight, served by Garuda Indonesia, Sriwijaya Airlines and Lion Air. Then it’s only less than an hour’s boat ride to Lake Toba.

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