Bali Hotels Seeing Increased Demand

Bali's hotels are seeing increased demand despite broader concerns about what seems to be an endless stream of new rooms coming online.

In a new report released by leading hospitality firms Horwath HTL and C9 Hotelworks, figures show the overseas arrivals though August 2014 surged 14% year-on-year. By the end of 2014 international passenger arrivals though Ngurah Rai Airport are expected to eclipse a record 3.8 million.

Speaking on the trend, Matt Gebbie of Horwath HTL said, "Bali hotels in many cases are weathering the storm of new supply, admirably holding rates and taking a small hit on occupancy. Individualism, management and product quality at every price point are more important than ever."

While overseas sentiment remains strong, the base tourism market for Bali remains that of South East Asia's largest economy - Indonesia. In 2012 and 2013 approximately 68% of visitor arrivals were from the domestic sector. While the country hosted 8.8 million international travelers last year, on a far more compelling scale were domestic hotel stays, which exceeded 200 million.

Viewing domestic consumption as a lead economic indicator has also pushed through to the island' property sector.

C9 Hotelworks Managing Director Bill Barnett said, "Over 80% of resort residential sales in the market are to Indonesian buyers. Developers of hotel branded residences have picked up that the mix of yield-motivated investment buyers are also driven by the desire of personal usage in hospitality projects, hence the robust pipeline of condominium hotel projects though out South Bali."

"Moving into 2015 Bali is looking at a mass-market strategy backed by the Indonesian government announcing visa waivers for five countries - China, Japan, Russia, South Korea and Australia," Mr Barnett added. "It's a pointed market pivot as it recognizes the potential of both the island's core business and the leading emerging markets. At mid-year 2014 over 90% of visitors to Bali came from Asia Pacific source markets. While the Eastern European initiative is clearly aimed to take a share of Thailand's substantial Russian travel trade."

As for the future of South Bali, Mr Barnett points out "There is an expanding halo effect from the existing critical mass of destination visitors and recently improved infrastructure that is now expanding into Lombok, the Gili Island, Sumba and Flores. Not only is tourism seeing expanded demand in these areas, but property developers are starting to recognize that opportunities are on the rise to tap into a Greater Bali economic picture."