HOTELIERS in Bali have been urged to be creative and cautious in their adjustment of rates for next year amid the hotel boom there.
According to the Bali Hotel and Branded Residences Update recently released by C9 Hotelworks and Horwath HTL, Bali will welcome 6,000 additional rooms this year, of which 4,000 rooms have already opened. While occupancy is down by four per cent, hotels have kept their rates steady.
C9 Hotelworks managing director Bill Barnett said: “New hotel rooms are opening at a faster pace, requiring developers and hoteliers to become increasingly creative to safeguard profitability.”
Indonesia’s domestic market continues to be the driving force behind Bali’s tourism fortunes – Indonesians account for 80 per cent of arrivals to the island – but growth is slowing, he added.
Barnett highlighted that while the burgeoning room supply in Bali is expected to outpace demand, it is important for hotels to “remain strong on room rates and tailor new supply to fill market gaps rather than using a scatter gun approach to development.”
Drawing a parallel to the closely connected real estate market, he said: “Indonesian buyers represent over 80 per cent of Bali’s property transaction market, but there are warning signs that sales pace is shrinking and the looming issue is that once guaranteed returns roll off, investors may see yields shrink.”
According to Barnett, one key segment to watch are the luxury hotel villas by brands such as Rosewood, Raffles, Fairmont and Jumeirah, which are progressively entering the market and have the potential to attract foreign buyers.
Separately, Sofitel is scheduled to open its first Indonesian hotel in Nusa Dua on December 20. Offering 17 villas, 22 suites and 376 rooms, the property has one of the largest meetings and function facilities in Bali, featuring a Grand Ballroom that can accommodate up to 600 guests theatre style.
