Hotels see increase in occupancy rate

Throughout the peak season afforded by the Idul Fitri break, hotels in southern Bali continued to receive a flood of guests, although some acknowledged that the occupancy rate this time is not as high as in previous years.

Bali tourism experts were of the opinion that the island’s tourist-related businesses were being saved temporarily by the July to August holiday season in Europe and Australia. But the promised wave of incoming tourists will not last for long.

“From Aug. 18 [one day before Lebaran] to Aug. 21 [one day after Lebaran], we’ve seen about 80 percent occupancy, which is similar to our room occupancy during last year’s Lebaran break,” head of room reservations at Inna Grand Bali Beach Hotel, Ketut Sudana, told Bali Daily on Tuesday.

“However, the surge is not as good as four years ago, when we could actually turn guests away because we were already full booked,” said Sudana, adding that the island’s first five-star hotel, with a capacity of 523 rooms, nowadays only sees 60 to 70 percent occupancy during regular times.

Sudana partly blamed the situation on the rapid development of other hotels in southern Bali. “There are plenty of new hotels. They have had quite an effect on us,” said Sudana.

The InterContinental Bali Resort, which has 417 rooms, stated that the hotel had a 90 percent occupancy rate during this year’s Idul Fitri holiday. “There’s not much increase. Maybe only around 1 to 5 percent difference with occupancy during previous months,” said the five-star hotel’s front office secretary, Manik Wisnawa.

Newly opened in March, city-hotel Harris Hotel and Residences in Sunset Road, which offers 186 rooms, recorded up to 98 percent occupancy on the second day of Idul Fitri and afterward, which is much higher than the 60 percent recorded on regular days. The hotel has offered a room rate of Rp 755,000 (US$80) during Lebaran, which is only slightly higher than the usual Rp 615,000.

Bali Tourism Board head, Ida Bagus Ngurah Wijaya, and tourism expert Bagus Sudibya both separately expressed their concern about the temporary nature of the surge in guests and the predictable hotel price war after the holiday season comes to an end.

“It just happens that during this couple of months, the Europeans — our largest tourism market — are having their summer holidays, while the Australians are in their winter holiday. No wonder we are seeing more visitors. But just wait for a few months from now, we will see a decline,” said Sudibya.

Sudibya pointed out that the ideal occupancy rate depended on the hotel’s source of funds. If the hotel was established through foreign investment with yearly interest on the loan as low as 2 to 4 percent with a 10-year repayment period, a steady 70-percent occupancy rate would be sufficient. However, he pointed out that local investors did not get the privileges received by foreign investors. “Loans in rupiah could be charged at 12 to 13 percent interest per year, with a repayment period of only five years. That is discrimination against local businessmen, who in the end have to fight for a higher occupancy rate to get a return on their investment,” said Sudibya.

Wijaya, who cited that ideally, hotels in Bali should have a stable 60 to 70 percent occupancy rate, predicted, “After the holiday is over, we’ll be seeing more price wars among hotels in Bali.”

As previously reported, Bali has become a popular affordable, if not cheap, holiday destination. In comparison to other neighboring nations like Singapore, Malaysia and Thailand, rates for four- and five-star hotels in Bali are similar to one- or two-star hotels in those countries. A tourist in Bali can stay at a three- to four-star hotel for less than Rp 1 million ($106) per night.

According to last year’s records from the Bali branch of the Indonesian Hotels and Restaurants Association (PHRI Bali), Bali has a total of 2,260 starred hotels, 88.5 percent of which are in south Bali.

Both Wijaya and Sudibya also highlighted the urgency for the government to create a holistic master plan for tourism development across the whole island. “After implementing the moratorium [in early 2011] against new hotel development, it’s important that the government does not stand still and initiates thorough calculations to create the correct policy,” said Sudibya, who cited the need to recalculate the number of existing hotels and the number of rooms each one has, the price standards, the expected numbers of visitors within the coming decade, and the required infrastructure related to transportation, water, electricity and manpower.