Bali likely to increase hotel rates

Driven by the growing number of foreign visitor arrivals, hotel operators in Bali are likely to increase room rates in the near future, an association chairman said.

Ida Bagus Gede Sidharta Putra, chairman of the Indonesian Hotel and Restaurant Association Denpasar chapter, said higher room rates would be applied in the next few months following increasing demand from foreign tourists visiting the resort island.

He said the decision to increase rates was also driven by the strengthening Rupiah against US dollar, as well as the rising minimum wage both at the regional and provincial levels.

“Bali remains one of the favorite destinations for foreign tourists. In fact, the island sees rising arrivals each year,” he said, citing results from the recent ASEAN Tourism Forum. “The year 2010 marked the highest hotel occupancy on record, even in periods outside the peak season.”

He added that hotels under his management, the Santrian Group, saw overbooking last year. “This is the main reason we plan to increase room rates.”

As most hotels apply US dollar rates, the rates are also affected by the weakening value of the currency against rupiah lately, which decreased profit margins. At the same time, expenses for electricity, water, food and employee salaries continue to increase.

Sidharta said the room rates might rise between seven to 20 percent depending on the policies of each hotel.

Bali Hotel Association executive director Djinaldi Gosana said the association would support the plan to increase room rates and had no authority to intervene.

“It is the authority of each hotel management. The hotels have their own considerations, and we will support them,” he said.

Each hotel has a different target market and offers distinctive services to make their guests feel comfortable, he added.

Sidharta said the new tariff would be valid for six to 12 months, depending on the contract between hotels and their clients.

Particularly for his hotels, the new tariff would be applied starting October. He said he was optimistic that more expensive rates would not decrease demand, saying that most of his guests are repeat customers.

— JP/ Wasti Atmodjo