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Bali Hotel Room Rate Competition and Holiday Season

June 26, 2013 Corporate No Comments Email Email

The first peak season in Bali has passed, and the next one is due at the end of year 2013. To further attract guest rate, new hotels and condominium-hotels in Bali have taken steps in facing competition by offering special prices, discounts and promo rates.

Many of these new hotels apply lower default room rates than standard rates in the hospitality market in Bali. While this sounds good for both tourists and Bali’s tourism climate, this may not bode well in the future.

Indonesian Travel and Tourism Association (Asita) noted that room and accommodation rates competition in Bali have stepped into unhealthy territory. During holiday season, many people do market speculation by buying lots and building hotels to try to gain profit. In popular areas such as Kuta and Denpasar, many new city hotels offer room rate as little as IDR 200,000 ($20) per night during holiday season, which ruins normal market for room rates in Bali. Some of these people are not locals, but visitors from different areas in Indonesia that wanted to get quick profits in holiday season.

Room rate competition in Bali has become major cause of recent problems such as traffic jam in popular spots like Denpasar, Kuta and Legian, and unhealthy competition environment among hotels and accommodation services. Many complained that Sunset Road has quickly turned into a boulevard, ruining the authentic beachside spot atmosphere in that popular tourist magnet.
However, managers and owners of respectable hotels may not have reasons to worry about the situation.

According to Marvin Sitorus, Owner at Daftar Harga Hotel (, hotel owners that apply low room rates often do not balance them with quality of services. “They only care about inviting as many guests as possible, but do not put much attention to details of services. Also, when guests come to a hotel in Bali, usually they expect to see authentic traditional elements in the details of building, and these hotels often don’t have them because they must build as quickly as possible. Guests will complain, and they give bad reviews to those hotels.”

Respectable hotels may have strong points in term of customer service against these new hotels, but that does not mean that they do not feel the impact. Recently, numbers of visits to Bali are reduced significantly because of traffic jam and low quality hotels. Now, tourists usually have only three to seven days of visitation periods in Bali, while during the 90’s, they could reach up to three weeks per visit. Every year, hotel owners and managers find decrease in their visitation numbers while new hotels built by speculators appear. This creates serious impact for respectable hotels that operate with long term business plans.

To stop this unhealthy room rate competition during peak and holiday seasons, Bali regional government has planned to apply new law related to standardized hotel room rate. This new law is also expected to stop uncontrollable hotel building that happens every holiday season and reduce problems related to tourism and infrastructure in Bali Province.

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