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s a tourism island containing thousands of villas, Bali will be the basis of a national pilot project on how to arrange and regulate the industry, according to Bali Villa Association (BVA) chairman Mangku Wayan Suteja.

The Tourism and Creative Economy Ministry has spent much of the past year preparing a draft regulation for villas, which includes the setting of standards of each facility and a licensing system.

It could become the country’s first regulation on villas.

The BVA is part of the team that has helped to create the draft regulation.

“The government is selecting Bali as the pilot project of this drafted regulation because various kinds of villas are being operated on the island. The regulation will raise our villas to international standards. The draft will be completed soon,” Suteja said recently.

Suteja, who himself is the operator of the Kunja villas in Seminyak, said that at the moment, many houses that have a swimming pool have already been described as villas to tourists and were rented out to visitors. The owners have never applied for licenses and they do not supply necessary facilities like security services.

As a result, there have been a number of crimes reported in villas rented by tourists that have been blamed on the lack of standardized security facilities.

Rented villas are regarded similarly to hotels, so they must have good-quality facilities and services, Suteja said, adding that it was urgent for villa classifications to be developed through regulation.

“The definition of a villa, in terms of the provided facilities and services, is crucial,” Suteja said.

Since its formation in 2006 as a division of the Hotel and Restaurant Association (PHRI), the BVA has only 73 members, despite the fact that thousands of villas are currently in operation in Bali.

“Most villas in the island are without permits. As they are not members of the BVA or PHRI, the government experiences loss of revenues. The situation also drives price wars among the villa operators,” Suteja said, adding that there has been little control of the security services in those unlicensed villas.

In 2010, the BVA collected data on villas in Badung regency and listed more than 700 in operation. This year, the BVA estimated that the number of unlicensed villas has risen to around 1,000, mainly located in Badung tourism spots, such as Petitenget, Canggu, Seminyak, Jimbaran and Nusa Dua.

The BVA is currently registering villas in the Gianyar regency and expects to complete that work soon. The villas being registered in Gianyar are found in the Ubud, Keramas and Ketewel areas.

The BVA has identified Badung, Denpasar and Gianyar as the main locations of villas.

Suteja said that the presence of villas as an alternative form of accommodation has grown since the 1990s. The types of buildings, facilities and services has varied. Standard villas are usually rented out for US$150 or more per room a night.

The Indonesian Hotels and Restaurants Association (PHRI) Bali chapter chairman Tjok Oka Artha Ardhana Sukawati, popularly known as Cok Ace, said the PHRI was completely in favor of the villa regulation.

“Many villas operate as starred hotels, although they offer no good facilities. Many others operate as cottages. The PHRI has yet to be able to classify them as a starred or non-starred hotel. It’s a specific business,” Cok Ace said.

Both Suteja and Cok Ace believe that a more detailed and tightened regulation may improve the image of accommodation facilities and services in Bali. The users of villas are mostly tourists from various European countries, Asia, Australia and locals.

Indonesia, specifically Bali, is currently facing tight competition against Malaysia and Thailand in this type of accommodation business.