The Decline in Hotel Supply in Bali Indicates Ongoing Investor Interest

A Hotel in Bali

Bali is witnessing a remarkable resurgence in its tourism sector after weathering the challenges imposed by the Covid-19 pandemic. The impact of the pandemic on Bali’s hotel industry has been substantial, leading to the closure of thousands of hotel rooms. This decline in available hotel accommodations was anticipated to intensify competition among hotels. However, the existing supply of hotel rooms in Bali hints at a continued interest from investors and the return of tourists, signaling a positive revival in Bali’s tourism landscape.

According to the latest report from Colliers for the fourth quarter of 2023, the period from 2020 to 2023 witnessed the addition of merely 817 new hotel rooms. Simultaneously, a significant reduction of 1,591 rooms occurred due to hotel closures, underscoring the ongoing challenges faced by the hotel industry in Bali.

The year 2023 marked an improvement in Bali’s hotel performance compared to the challenging years of 2020 to 2022. This upturn began in the middle of 2022, aligning with the relaxation of travel regulations. During this period, there was a notable surge in tourist visits, particularly from foreign countries, contributing significantly to the overall occupancy rates of hotels in Bali.

Despite not yet achieving full recovery, statistical data indicates a consistent increase in the number of both foreign and domestic tourists visiting Bali over the past three years.

The markets of Asia Pacific and Europe have played pivotal roles in shaping Bali’s international tourism landscape. Presently, these markets exhibit promising signs of recovery. Australia maintains a dominant position with a 50% share of the market, although predictions suggest that Australian tourists might opt for alternative destinations for their summer vacations in the year 2023-2024.

While tourists from key Asia Pacific countries such as Japan and China have not yet reached 50% of the recorded numbers from 2019, it is noteworthy that Bali’s primary market remains local tourists, contributing over 60% to the total number of tourists in Bali. The year 2023 stands out as a pinnacle in Bali’s performance, reflecting a specific revival, particularly in areas like Ubud and Kuta-Legian.