Koster Issues Ultimatum to 8 OTAs, Threatens Action Against Unlicensed Accommodations

Bali Governor Wayan Koster has disclosed that he recently summoned eight major online travel agents (OTAs) to address the proliferation of unlicensed accommodations and the resulting loss of local tax revenue. He stated that the provincial government has demanded these digital platforms take responsibility for the sustainability of local tourism and threatened strict action against those that continue to promote unlicensed villas. “I called in the eight OTAs, I sat them down at Jayasabha. These are the ones marketing tourism services in Bali, including those unlicensed villas being marketed worldwide,” Koster said during the groundbreaking ceremony for the South Ring Road (JLS) project in Pecatu, South Kuta, Badung, on Monday (27/7/2026).

The regional government is highlighting the existence of tens of thousands of commercial dwellings in the Badung area operating without official permits and failing to pay local taxes. Digital business practices that lack a physical footprint in Bali are considered detrimental to regional revenue from the tourism sector. Koster noted that the Bali Provincial Government has also requested all accommodation booking platforms to comply with licensing regulations and help maintain the local tourism business climate. As a result, the strict policy has begun to elicit a response, with platform providers now requiring business permits for listed properties. “Now they are starting to inform their customers to take care of their permits. If not, they won’t handle it and won’t market it anymore,” Koster explained.

Amidst a decline in foreign and domestic tourist arrivals due to soaring airfares, the provincial government has recorded a unique trend in the accommodation industry. Despite a 4 percent drop in international visitors and an 11 percent drop in domestic tourists, occupancy rates for star-rated luxury hotels in the Badung area have surged significantly. “The number of tourists has decreased, but the occupancy rate for star-rated hotels has gone up. Luxury hotels in Kuta are now at 80 to 90 percent occupancy,” the Buleleng-born governor stated. Koster concluded that the increase in star-rated hotel occupancy and the rise in hotel and restaurant tax (PHR) revenue indicate a shift in tourist behaviour towards registered accommodations. He expressed confidence that the crackdown on illegal villas through digital distribution channels would further optimise regional tax receipts.