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.