New hotels mushroom in Bali despite economic crisis

New hotels mushroom in Bali despite economic crisis

By I Wayan Juniarta

DENPASAR (JP): Despite an economic crisis, businesspeople are
still eager to invest their money in Bali's hotel and tourism
industry.

In the past five months, there have been soft openings for at
least three new hotels, two boutique hotels, the Nusa Lembongan
Resort on Nusa Lembongan island, the Balangan in Jimbaran and the
three-star Alam Kulkul Resort in Kuta.

Regardless of the current economic and political situation,
which has, more or less, affected the arrival of foreign and
domestic tourists to the island, data from the Ministry of
Tourism, Arts and Culture's provincial office shows that so far
this year, about 20 domestic companies and 18 foreign firms were
granted licenses to build new hotels and resorts in all parts of
the island, such as Jimbaran, Ubud and less-popular spots like
Kerambitan, Jatiluwih, Bedugul in Tabanan regency and Nusa Penida
island in Klungkung.

When all the planned projects are completed, Bali will have an
additional 10,000 hotel rooms. At present, Bali has about 1,022
hotels with 31,372 rooms.

The opening of new hotels has added the number of hotel rooms
in the province, said I Gde Wiratha, chairman of the Bali's Hotel
and Restaurant Association's chairman.

I Gde Wiratha, said that while the opening of new hotels has
added to the number of hotel rooms in the province, "many old
hotels have also contributed to the increase of accommodation
because they have also built additional rooms and facilities."

Dwi Yani, a writer and observer of the tourism and hotel
industry, said that the expansion of old hotels had aroused
concern among businesspeople and government officials.

"Hotel owners and other people in the tourism industry should
actually optimize their existing hotel facilities rather than
expand or add new rooms," complained Dwi Yani.

He also stressed the importance of improving their services
and increasing their hotel rates.

"Some of the hotels set up official room rates at US$150 per
room, but in practice, they can discount this up to 70 percent.
Many hotels sell their rooms from only $18 to $50 a room. This is
very unhealthy business."

Wiratha, on the other hand, is still optimistic that the
weakening hotel industry will regain its golden age in the coming
years.

He predicted that Bali still needed another 15,000 rooms by
2003 with 7 million visitors expected to arrive on the island.

Wiratha is also confident that the occupancy rates of hotels
in Bali will remain very high, compared to other regions in the
country.

"Up to the present, the occupancy rates of three-star hotels
in Bali still reaches 60 percent. There is a slight decrease in
non-star hotel's occupancy rates because of the current conflict
between Indonesia and Australia," Wiratha said.

The number of Australian tourists has dropped slightly from
287,733 visitors in August to 234,780 in September.

Evie Dhiani, marketing manager of the newly opened Nusa
Lembongan Resort, is also hopeful, saying that the occupancy rate
of her hotel has already reached 60 percent since its soft
opening last July.

"We have set up s specific market segment as we only focus on
frequent visitors. Most of these visitors already know Bali and
they prefer to stay at comfortable and quiet hotels which respect
their guests' privacy," she said.

Located on a remote island about one-and-a-half hours from
Benoa harbor, the Lembongan resort's room rates are between $200
and $500. The hotel will be officially opened in January next
year.

Owners and operators of other hotels, including The Balangan
and Alam Kulkul Resorts have also showed optimism.

The Balangan hotel, opened in early September, offers its
guests fantastic panoramic views of the Jimbaran hill, while Alam
Kulkul resort in Kuta boasts as being an environmentally friendly
hotel.

However, the collapse of the hotel business in Candi Dasa,
Karang Asem, East Bali and the quiet tourist activities in Lovina
in Buleleng, North Bali, has given discouraging signs to the
island's tourism industry.

The expansion of hotel rooms in Bali will not necessarily
attract more visitors to the island.

This expansion projects could also pose serious ecological
problems, including water problems.

It requires 260 liter of water per second for 31,000 hotel
rooms in Bali, equivalent to the amount of water needed by
250,000 villagers to irrigate 1,980 hectares of rice fields.

No wonder many people, environmentalists in particular, are
always suspicious over the plans to build new hotels and resorts
in Bali.

The basic question is whether the profits taken from the hotel
industry could compensate the possible environmental damages
which will likely last forever.