Bali, Hi… Market on the Precipice

W Resort Entrance
W Resort Entrance

Just back from Bali on business trip. What have I to report?

The big impression is that it's a tourism destination on the precipice – development, population growth, mass tourism and poor infrastructure the biggest threats – but it's still a great place for a certain type of holiday.

Following are some quick thoughts:

  • The traffic is as bad as everyone says. Unless you're out and about by 8am you will get caught in a traffic jam. For example, it's only 5km to 6km between Kuta and Seminyak but the journey can easily take 30 minutes at an average speed of around 10 km/h.
  • Hotel development is out of control and the number of rooms being built far outstrips tourism growth. The local media is full of complaints from local operators. "The number of hotel rooms in Bali has increased by 20% (to 80,000) while tourist arrivals have only increased by 9% – it's very unbalanced," Rai Suryawijaya, local Chairman of the Indonesian Hotels and Restaurants Association told the Bali Post last week.
Westin looking to Kuta 404 x 303
Cranes on the Horizon looking from Seminyak toward Kuta
  • An unbelievable amount of money is going into some of the new hotels. The most opulent by far is The Mulia, a 500 room resort at Nusa Dua. It's shiney, hard, expensive surfaces on a huge scale. Excessive some might say. Other new properties include the Sheraton at Kuta and The Stones Resort, managed by Marriott, next to the Pullman on the beach at Legian. The Sheraton's part of the Beachwalk shopping complex while The Stone's is built back from the beach around a central pool and dining space.
Mulia 403 x 213
The opulent Mulia at Nusa Dua
  • Pricing and distribution is a mess. There's no discipline in terms of pricing and it will only get worse as more supply comes online. For example I bought a room and breakfast package at the very comfortable Pullman Legian on Wotif for AUD132 a night – significantly less than it was being sold for on the Accor site. This deal was also much cheaper than other sites. The same haphazard pricing was evident at many other properties.
View from the Pullman Legian one sunny morning
View from the Pullman Legian one sunny morning
  • A lack of product differentiation – why should I stay in spot A instead of spot X? – adds to the confusion. Bali has most definitely been commoditised and this is a problem. The fact is now that due to all the development, distinctions that used to exist no longer do. The traffic in tourist Bali is crazy everywhere so the only peaceful retreat can be found inside the larger resorts, on the beach and away from the street. All other places feel … familiar. Kuta/Legian/Seminyak – same, same, same.
  • The new airport can't open up quick enough. It still looks very much unfinished but is supposed to open by the APEC meeting in October, as is a new road bridge connecting the airport area with Nusa Dua.
  • Bali is still cheap to eat, drink, shop and get around. A nice meal can be had for less ┬áthan $10, beer is around $2.50 while t-shirts are around $5. A driver and van costs $50 for 10 hours.
View from Impossibles on the Bukit Peninsular
Middle of the day at Impossibles on the Bukit Peninsular
  • Airfares can be expensive relative to other Asian destinations from the Australian east coast – up to $1300
  • The touts on the beach at Kuta and Legian aren't so obvious – and it's a great beach, something I'd forgotten, especially when the wind is offshore and the sun is setting.
Sunset over Legian
Sunset over Legian

In summary, Bali is under pressure and its future as a long-term quality tourism destination uncertain. But for now it's still a great place to take a holiday!

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    2 thoughts on “Bali, Hi… Market on the Precipice”

    1. Thoroughly enjoyed reading your article, and I must say you are right on the money. We returned to the island "paradise" after 27 years and it took us 3 days just to get over the shock. Kuta, Legian and Sanur are definate No nos – for us the mountains still hold some of the Bali magic and we discovered the ideal place in a village called Nunkuning in Ubud. We stayed in amazing accommodation – and its just a short walk through the Monkey Forest to the hussle and bussle of Ubud. Oh yes we bent to the tourist route with white-water rafting and a visit to the zoo but we were able to venture further afield to visit places we had not been to before and yes, it is possible to discover a little of the "real Bali".

    2. Very well written article and certainly correct. The worst development i have seen is all the city hotels (basically block hotels) with hardly any gardens, just four floors of rooms. They are great if you just want a cheap room for the night but is this what Bali should be allowing? You can stay in these 3 star places for less than $50.00 a night with breakfast.

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