Horwath publishes its study on the Bali hotel market

DENPASAR- According to Horwath HTL, Bali is now receiving over eight million foreign visitors per year, thanks to growth rate averaging 13% growth annually between 2004 and 2011.
Prospects for Bali’s tourism and hotel industries are more positive than ever,especially as Bali airport expansion is supposed to be completed before the hosting of the APEC summit next October.  The new airport expansion promises to support Bali’s ability to bring in more tourists.
Based on Indonesia’s Central Bureau of Statistics (BPS) figures, there were more than 22,000 hotel rooms available in Bali by the end of 2011. In 2012, more than 3,400 additional hotel rooms entered the market. Subsequently, another 4,700 rooms are slated for opening in 2013, and a further 4,100 rooms from 2014 to 2016. Accordingly, more than 12,000 new rooms are expected to enter the market by the end of 2016.
The enourmous increase of hotel room supply between 2012 and 2013 is in anticipation of international events; the largest and most high profile of APEC Summit planned in 2013.
Nearly half of the new hotel supply is expected in West Bali. Even though a hotel development moratorium has been in effect in Badung, Denpasar and Gianyar Regencies since January 2010,development projects in these regencies continue unabated. Most are associated with development permits issued prior to the moratorium. Hoteliers in Bali are asking the government to limit supply additions as they are concerned about an over-supply of hotel rooms on the island, as well as the drain on an already stressed infrastructure.
As previously noted, hotel occupancy for rate B and C hotels is already declining due to the increased supply. Bali hoteliers learned from the difficult times between 2002 and 2007 and most hotels are looking to build their rates, instead of occupancy: all segments of the market indicate increased, ADR levels.
Existing hotels currently have the luxury to focus on selective markets by means of optimizing yields, as opposed to the shotgun approach in attempting to attract the general market that prevailed in the past.
Hotel developers traditionally have the tendency to build in the Western and Southern parts of Bali, primarily due to the proximity to the airport. These investors learned early on that if they develop further away from the airport in more isolated areas, these hotels are more susceptible to downturns as the island experienced in 2002 – 2007.

Sourced: TravelDailyNews