Bali Room Oversupply – NusaBali reports that growing evidence of a surge in tourism properties in Bali being offered for sale does not necessarily indicate a sluggish tourism industry. Conversely, soft demand and lagging hotel occupancies highlight an oversupply of rooms that has been building for several years. The logical consequence is an inevitable price war—a situation tourism industry observers expect to worsen and escalate into an indeterminate, endless price conflict.
I Gusti Agung Rai Suryawijaya, Chairman of the Badung Chapter of the Indonesian Hotel and Restaurant Association (PHRI), views this phenomenon as a signal that requires government attention, particularly because accommodation supply continues to grow while Bali’s market capacity to absorb more rooms remains limited.
According to Agung Rai, random data collated with the Bali Tourism Office reveals that properties frequently listed for sale are villas that have already been built and are currently in operation. “It’s true that many villas are for sale. However, most of those being sold are villas that have already been constructed,” Agung Rai said on Wednesday, 30 September 2026.
He emphasized that property sales cannot simply be interpreted as a sole indicator that Bali’s tourism business is in trouble. For example, most hotels listed on the market remain operational, with occupancy rates above 60 percent, and some even reaching 75 percent.
In Agung Rai’s view—based on his 43 years of experience in hotel operations—an occupancy rate above 60 percent is still considered healthy. Under these conditions, hotels can still generate profits for owners, provide income for employees, and meet their tax obligations.
Consequently, Rai related, the reasons owners sell their properties vary. Beyond internal shareholder decisions, Agung Rai suspects that some owners are merely testing the market to gauge their assets’ value. He also dismissed the notion that these property sales are directly linked to any slump in foreign tourist arrivals. He noted that foreign tourist visits remain relatively stable. State Statistics Agency (BPS) data show that Bali received 3.90 million foreign tourist visits between January and July 2026. In July alone, visits reached 697,809—a 15.34 percent increase compared to June. However, BPS data also indicates that cumulative foreign tourist visits to Bali from January to June 2026 fell by 2.42 percent compared to the same period in 2025, dropping from 3.28 million to 3.20 million visits.
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Agung Rai said the biggest pressure on hotel occupancy in Bali is currently coming from the domestic market. He estimates that domestic tourist visits in September will decline by approximately 15 percent. According to him, this is driven by factors such as high airfares, fewer government-organized meetings, and national economic conditions.
Meanwhile, the international market remains a key pillar of support. Agung Rai noted an average of around 22,000 foreign tourist arrivals per day across 43 flights. He also highlighted plans for additional flights from China, a new TransNusa route to Melbourne, and more direct charter flights from Moscow.
Agung Rai highlighted another issue affecting Bali’s hotel sector is the very rapid growth of accommodation supply. He warned that if the construction of hotels, villas, condotels, guesthouses, apartments, and other forms of accommodation continues to expand without regard for market capacity to absorb new rooms, business competition would become increasingly fierce.
“If the development of tourism accommodation continues unchecked like this, it will have a detrimental effect on the future of tourism. It will trigger a price war,” he said. According to Agung Rai, a price war will have a ripple effect. When prices are driven down, business revenues are likely to fall as well. A drop in revenue could, in turn, impact the service charges paid to hotel employees.
Ultimately, tax revenues will also suffer. Therefore, he believes Bali’s future strategy should not focus solely on increasing the number of rooms and accommodation units. “In my view, it is better to raise prices than to increase our supply,” he asserted.
Agung Rai urged the government and all stakeholders to study Bali’s carrying capacity to determine the limits of tourism growth. He proposed a three-to-five-year evaluation and restructuring process, including the option of a moratorium on accommodation development in areas where supply is already excessive.
He specifically highlighted the Sarbagita area—comprising the Denpasar, Badung, Gianyar, and Tabanan areas of Bali—as requiring attention and future control of accommodation development. Agung Rai also noted that the carrying capacity of Bali’s I Gusti Ngurah Rai Airport should act as a natural limiter on the growth of visitor numbers to Bali.
Agung Rai estimates that foreign tourist arrivals hover between 7 million and 7.5 million annually, while domestic tourists account for approximately 9 million to 10 million travelers. Given these conditions, Agung Rai proposed maintaining accommodation occupancy rates at around 90 percent before the government permits any further expansion of accommodation development.
“Only when the regional occupancy rate in Bali reaches 90 percent should we selectively open the tap again to allow the opening or construction of new tourism accommodation,” he said.
Beyond oversupply, the Badung Chapter of the Indonesian Hotel and Restaurant Association (PHRI) also identified legality issues with some of the properties being offered for sale. Agung Rai said he had received information from expatriate community members in Bali regarding properties built on land with problematic zoning status or lacking complete legal permits.
This situation becomes an even bigger issue when such properties are marketed via online platforms like Airbnb and Online Travel Agencies (OTAs). According to Agung Rai, accommodations listed on these platforms must comply with licensing regulations and possess a Regional Taxpayer Identification Number (NIB). He urged the government to find solutions for established businesses—including potential regulatory adjustments through Detailed Spatial Plans (RDTR)—that allow businesses now deemed ineligible to secure the necessary permits and complete tax registration despite being built on non-conforming land.
Agung Rai also believes that organized legalization could expand the local government’s tax revenue base from the tourism sector. Agung Rai views this approach as aligning with Bali’s tourism development direction, which prioritizes culture, quality, and dignity.
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Bali Airport to Canggu Water Taxi Project
NusaBali says the timeline for building a water taxi pier at Perancak Beach, North Kuta, remains uncertain. The project, designed to provide an alternative maritime transport route from Bali’s Airport to the Canggu area, is currently awaiting the completion of at least 14 separate studies.
This was revealed during a public consultation regarding the proposed water taxi pier held at the Tibubeneng Village Head’s Office on Friday, 02 October 2026. Attendees included Made Agus Aryawan, Assistant II to the Badung Regent; representatives from various Badung regional government agencies; Tibubeneng community leaders; and representatives from the Perancak Beach Fishermen’s Group. Community feedback gathered during the public session will inform further analysis before the final decision on the pier’s construction.
The 14 required feasibility studies cover socio-cultural and environmental aspects, technical specifications, and the project’s potential impact on community activities and nearby sacred sites. The findings will determine whether and how the project proceeds, including the pier’s final design and location.
Residents raised several important points during the meeting. One community concern involved the proposed pier location, which infringes on areas used for traditional and religious activities. Participants urged officials to consider access to local temples, existing community activities, and the potential for creating additional traffic congestion.
Dr. Liz Zeny Merry, M.H., M.M., Assistant for Connectivity Support Facilities and Infrastructure at the Coordinating Ministry for Infrastructure and Regional Development, stated that planning for the water taxi project is still in its early stages. The consultation aimed to gather public input while presenting plans for alternative transport connecting Ngurah Rai Airport to major tourist areas.
According to Liz Merry, rising tourist arrivals in Bali threaten to place an increased burden on the road network, particularly in Canggu and its surrounding area. Consequently, a water taxi service is being evaluated as an alternative connectivity option for tourism. However, she emphasized that the project plans are not yet finalized. At least 14 studies remain incomplete before any final decision on construction can be made.
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“We are still in the early stages. 14 studies remain to be conducted, covering socio-cultural, environmental, and technical aspects. These will form the basis for determining the pier’s design and location,” said Liz.
The Berawa Beach area was considered in the preliminary study because its ocean wave characteristics are milder than at other points along the coast. This condition was a key technical factor in selecting the site.
However, technical aspects are not the only consideration. The presence of sacred areas and local customary activities around Perancak Beach necessitates a comprehensive review of the development plan.
Liz emphasized that the project should not be viewed solely in terms of physical infrastructure and transportation needs; the impact on the local community and the environment must also be carefully weighed.
“We want to improve the tourism experience and find solutions to traffic congestion. However, the development’s benefits must outweigh its impacts. Therefore, all community feedback will be included in the study,” she asserted.
The development’s impact on coastal conditions is also a concern. One specific issue is the breakwater’s potential to alter sedimentation patterns, which the preliminary study includes.
Regarding the planning phase, Udayana University has been conducting a feasibility study for over six months, starting last year. After the feasibility studies are completed, the process will then move to preparing the Detailed Engineering Design (DED). However, completing the studies and DED does not automatically mean construction can begin immediately.
“Several follow-up studies still need to be finalized, including socio-cultural and environmental assessments,” she said.
Budgeting is another factor; Liz noted that the funding source for the construction has not yet been finally confirmed. The project may require collaboration between the central government, the Badung Regency administration, the community, and the private sector. As a result, she could not yet confirm when pier construction would begin. “This is still the initial stage of communicating with the public. We do not want this plan to remain merely a concept. However, if the study results indicate it is not feasible, we must accept that. We must ensure the development does not cause more harm than good,” Liz emphasized.
Main Article: Bali Room Oversupply
Main Article: Bali Room Oversupply
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