Bali’s rates on the uptrend

BUOYANT inbound traffic is driving hotel rates in Bali skywards, despite limited airlift and a slew of rooms set to flood the market by 2014.

Research by property consultancy Knight Frank shows that Bali will have 10,466 new hotel rooms by 2014. As many as 3,922 of these rooms – or 37 per cent – will be operational by the second half of 2012.

“Hotel rates in Bali have been on the rise even with additional supply underway. There is at least a 10-20 per cent increase (in rates) every year,” said Richard Vuilleumier, managing director of Panorama Tours Malaysia.

Conrad Bali raised its rates by eight per cent in 2012, and is targeting a 10 per cent increase next year, according to director of sales Caroline Chrysdy, who noted that average occupancy was about 78 per cent this year.

Likewise, board member of The Seminyak Beach Resort & Spa, Herdy D Sayogha, said the hotel plans to raise room rates to US$308 in 2013, from this year’s US$270.

Although rates are set to rise further, some hoteliers in Bali feel that a meatier increment could be had, if not for the wave of hotel developments. Sayogha said: “Most hotels in Bali should be able to raise their rates, but the incoming developments mean that rates are not increasing as much as they should.”

Vuilleumier said huge inbound traffic from Australia, Vietnam, China and Japan were keeping demand strong in Bali. “Rates are on the uptrend because there is more demand than supply – construction of additional hotels takes time. Direct connections may be insufficient, but visitors also have the option of flying via Jakarta,” he added.

Moreover, the domestic market has evolved into a force to be reckoned with. Domestic bookings grew 20 per cent a year over the last two to three years, said Gede Parmita, corporate director sales & marketing, Paridiso Bali Hotel, attributing the dramatic growth to the middle-class boom and the strong Indonesian economy in recent times.

“In fact, the domestic segment now generates about 40 per cent of our annual bookings, compared to just around 10 to 20 per cent five years ago,” he said.

Paridiso Bali Hotel intends to raise rates for locals by 10 per cent in 2013, compared to just eight per cent for overseas markets.

Nyoman Santiawan, vice chairman of Rama Hotels & Resorts, which operates seven properties in Bali, said room rates were expected to rise by five to 10 per cent in 2013 despite new room supply, mainly due to the flourishing domestic market.

But Santiawan said not all hotels would be able to hike rates. “Those in the main tourist strip will have more leeway than those off the beaten track,” he said.

Additional reporting by Linda Haden

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