Gianyar chose to take a different path in its tourism development by officially banning the construction of increasingly-popular condominium hotels, known as condotels, and apartment facilities in the regency known as the resort island’s cultural mecca.
“We have decided to ban the development of condotels or apartments in our region. The policy was made to control physical development, as well as protecting our local entrepreneurs,” Gianyar Regent Anak Agung Oka Artha Ardhana Sukawati, said.
Condotels and apartments are currently the hottest items in the market for tourist developers and investors in Badung and Denpasar. Building condotels and apartments has also provided them with a legal way to navigate around the moratorium on new hotel development in southern Bali, issued by Bali governor Made Mangku Pastika in early 2011. Badung, Denpasar and Gianyar are the three richest regions in Bali and most of their wealth comes from tourism.
Sukawati said there was a valid concern that the development of condotels and apartments would marginalize local entrepreneurs in Gianyar. “Most of the investors in condotels and apartments bring with them lots of capital, and they are mostly coming from outside Bali. This could pose powerful competition for our local entrepreneurs. That’s why we prefer to ban that kind of investment in Gianyar,” he said.
Unlike Badung and Denpasar, where a growing number of tourism facilities are owned or operated by non-local companies, Gianyar’s hotels are mostly owned by local companies or entrepreneurs. The regency’s tourism crown, Ubud, is a perfect example. In this small town, a large majority of starred and non-starred hotels are owned by natives of Ubud, including the influential Ubud royal family, to which Sukawati belongs.
Gianyar regency now has around 7,000 hotel rooms, most of which are owned by local entrepreneurs.
Separately, former Bali Tourism Board chief and local tourism businessman Bagus Sudibya highlighted the possible negative impact of the ongoing boom in condotel and apartment development.
He pointed to the fact that many locals have been sidelined after selling their land to property developers. Bagus urged the administration to issue a bylaw that regulates local residents’ land ownership.
“Instead of easily offering their land for sale, they can offer their land for rent. An administration regulation is needed to support this,” said Bagus, citing the urgency of implementing the build-operate-transfer (BOT) system for land, which allowed the land to be returned to the locals after a certain concession period has been completed.