Hotel rates continued to increase in Bali despite a growing imbalance between supply and demand. But the good times are almost certainly coming to an end with increasing evidence that 2013 will finish soft for hoteliers, according to the latest Bali Hotel Update from C9 Hotelworks and Horwath HTL.

“With a massive increase in supply there are going to be gong to be both occupancy and rate pressures in Bali over the coming years,” the reports says.

“Market wide, Bali hotels have shown consistently great rate growth, 8% annually on average between 2008 and 2012.

But occupancy “has fluctuated, struggling with the high amounts of new hotels opening on the island.

Occupancy fell below 70% for the year to June 30 – down 4% – while average daily rate increased USD5 for the same period to just above USD150.

Combined this has driven Revenue Per Available  Room down USD3.

“It is expected that this negative trend will continue to the end of 2013.”

And beyond…

“Looking ahead to 2014, Bali should see further solid increases in arrivals from established and emerging markets, but the demand pace is likely to be outstripped by further large increases in supply.

“It is important now (that hoteliers) remain strong on rates and tailor new supply to fill market gaps rather than using a scatter gun approach to development.”

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