Bali is shifting its development focus. Six regencies have formally agreed to stop pushing large-scale hotel and restaurant development. Instead, their attention will turn to strengthening tourist destinations and preserving productive land.
Governor Wayan Koster announced that Buleleng, Karangasem, Tabanan, Jembrana, Klungkung, and Bangli have reached a consensus on this move.
“These six regencies have agreed to no longer encourage hotel and restaurant expansion, as long as the Hotel and Restaurant Tax (PHR) revenue from the three main contributing regions is shared more fairly. Let Denpasar, Badung, and Gianyar remain the business hubs for hospitality. We don’t want Bali to be exploited entirely,” Koster stated on July 28, 2025.
Denpasar, Badung, and Gianyar—known as the Sarbagita region—will serve as economic engines for the rest of the island. These areas generate the highest Regional Original Revenue (PAD) from hotel and restaurant taxes and have now committed to redistributing a portion of their income.
As a sign of commitment, the three regions have signed a Memorandum of Understanding. They agreed to allocate 10 percent of their total PHR income to support infrastructure development across all of Bali. The funds will be channeled through the Special Financial Assistance (BKK) scheme.
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“These funds will support repairs of provincial roads and other regional infrastructure through BKK. The total is around Rp700 billion. It reflects inter-regional solidarity,” Koster explained.
Distribution of these funds will take into account factors such as land area, population size, and the condition of existing infrastructure in each region.
Starting in 2026, the funds will be sent directly to district and city governments without going through the Bali provincial government.
“This money cannot be used for consumptive spending like buying cars or other goods. It must strictly go to productive development,” Koster emphasized.
He also stressed that the distribution process would be fair and unaffected by political affiliations. Karangasem Regency, for instance, will still receive a significant share despite its regent belonging to a different political party.
“This is about development justice, not politics. Karangasem will still receive a large portion. I know the council member from Karangasem, Bu Mas, will be fine with this because we are not playing favorites,” Koster added.
