The Bali chapter of the Association of Tourism Intellectuals (Ikatan Cendekiawan Pariwisata Indonesia – ICPI) is raising alarms that accommodation development in Bali is following an unclear path. This lack of clarity is reflected in the uncontrolled new growth in starred hotels and city hotels.
The chairman of ITCP-Bali, Putu Anom in Denpasar on Wednesday, October 15, 2014, said that at one time new development of starred hotels were confined to a specific areas where luxury hotels could compete with each other, but now inexpensive city hotels stand side-by-side with starred hotels and a resulting unhealthy level of price competition.
Anom continued: “I city hotels with their low prices now have hotels in elite or resort areas, surely stealing market share from higher priced starred hotels.
Anom also criticized authorities allowing city hotels to be built in village locations. Such hotels, typically built in a minimalist style, sell rooms at lower prices than existing accommodation providers operating as small boutique properties, inns and home stays, The established businesses owned by local residents, are forced to sell at low, non-viable rates in order to retain market share.
Anom wants the government to create specified zones for low-cost city hotels and separate zones for starred hotels. Moreover, the ITCP chairman wants local stakeholder organizations, such as the Indonesian Hotel and Restaurant Association (PHRI).
Separately, Ketut Ardana, the chairman of the Indonesian Association of Tour and Travel Agents (ASITA), blames the current building book in accommodation as the reasons that occupancies are declining at starred hotels in Bali. In the effort to sustain their businesses, local hotels drop their rates. The final result of this process, argues Ardana, is that Bali gets transformed as a cheap destination
Ardana, like Anom, want the government to tighten the licensing process for new hotels and look beyond the simplistic goal of increasing the tax base.