home » news

Badung insists on inviting hotel investors (20/04/2012)

Badung regional administration is aggressively inviting investors to develop tourist-related facilities, including hotels, as long as they meet the existing regulations and requirements.

Regent Anak Agung Gde Agung told reporters on Thursday that the administration would abide by any regulation regarding hotel and tourism investments, including a moratorium on hotel construction.

“But, to date, there is no regulation stipulating a hotel moratorium and therefore, we [Badung regency] still encourage investors to develop tourist related accommodation and other business enterprises,” the regent said.

In fact, Bali Governor Made Mangku Pastika issued a Governor Instruction in early 2011 to implement a moratorium on new hotels in southern Bali, an area that encompasses the island’s three richest regions: Badung, Denpasar and Gianyar.

The moratorium was aimed at tackling the problem of oversupply — up to 85 percent of the island’s 55,000 hotel rooms are located in the southern region — as well as guiding the investment flow to other regions in Bali. The rising number of new hotels in Bali was increasing competition, a senior government official has said.

In 2011, Bali received 2.7 million foreign and four million local holidaymakers. The island is expecting to lure more than 3 million foreign tourists through to the end of 2012.

The new hotel developments have so far had little impact on occupancy rates. The Bali office of the Central Statistics Bureau has recorded no complaints about declining hotel occupancy rates due to the mushrooming of hotel developments.

The occupancy rate remained stable thanks to the island receiving a higher number of visitors this year, the office stated, but warned that the situation would be different if the number of new hotels kept increasing while the number of visitors stagnated due to a contracting economy or other factors.

Meanwhile, Gde Agung elaborated that the tourism sector had been the major economic backbone for Badung regency, the richest among the island’s nine regencies and one mayoralty. The regency’s total revenue (PAD) reached Rp 1.38 trillion (US$150.42 million), higher than its target of Rp 1.15 trillion in 2011. Around 80 percent of total revenue originated from the tourist sector, including hotel and restaurant taxes.

The regent said that investors had to provide spacious parking lots and other supporting facilities. He also urged developers to include Balinese traditional architectural styles when designing and building any new hotels, villas or condotel (mixed-style condominium hotel buildings).

“We will not complicate the issuance of permits if all the requirements are met,” added Gde Agung.

However, he encouraged investors to make way for development projects in the regency’s northern part.

“We want to develop the northern part of the regency, which also has great tourism potential.

Based on data from Badung tourism office, there are 37,000 rooms in starred hotels, non-star hotels, villas and other facilities.

Cok Raka Darmawan, head of Badung Tourism Office, explained many hotels are being constructed throughout the regency. “Some of the investors applied for the permits some years back, while there are also ongoing renovations of old and dilapidated hotels,” said Darmawan.

IB Ngurah Wijaya of the Bali branch of the Indonesian Tourism Association, complained that Bali was already over supplied. “We support the hotel moratorium initiative. We hope that there are no conflicting interests between provincial and regional administrations.”