Bali received Record Number of Tourists, but Hotel Occupancies are down

Jun 2nd 2007

Total foreign arrivals during the first four months of 2007 totaled 472,082 -  an improvement of +38.38% over the same four months in 2006 and the strongest start to any year on record

Comparing arrivals by residence for Bali's top four source markets and China for the first four months during the past years, it emerged that:

• Japanese arrival figures have recovered completely, improving +57.53% in the first for months of 2007 (107,254) as compared to the same period in 2006. Japanese arrivals during the opening months of 2007 performed at near-record levels.

• Australia arrival numbers, while improving +56.65% for January-April 2007 as compared to 2006, still lag some -35.49% behind the first four months of 2005.

• Taiwanese arrivals finished the first four months of 2007 +9% better than the same period in 2006. A closer look at Taiwan's arrival patterns suggests recovery in that market is mirroring the pattern following the 2002 terrorist attack. All things being equal, expect strong performance ex Taiwan in 2007 and 2008, said balidiscovery.com

• South Korea logged in the strongest opening on record for Bali arrivals, totaling 38,636 for the current year.

• The People's Republic of China may prove itself to be a "sleeping giant" in terms of Bali arrivals. Better flight connections and easier visa access saw 22,263 mainland Chinese visitors come to Bali in the first four months of 2007, up from a near-zero base just 7 years ago. Expect a 100% year-on-year improvement from this market for 2007.

Where have the tourists gone?

Despite these encouraging statistics, recent surveys carried out by the Bureau of Statistics (BPS) and Bank Indonesia (BI) in Bali nonetheless confirmed that while the quantity of tourists visiting Bali is increasing dramatically, the overall quality of those tourists is on a sharp decline.  Increasing competition among accommodation providers, which now include hundreds of private villas and new resorts, has made the current lack of quality embodied in current arrival numbers even more apparent.

The survey, conducted in January 2007, showed many starred hotels in Bali are running with occupancies at less than 50%, a fact underlining the dramatic over-supply of rooms facing the Island.

The BI and BPS surveys also showed that there have been fundamental changes in the complexion of inbound tourism to Bali. Much of the growth in arrival numbers can be credited to the advent of low-cost carriers serving short-haul markets in the Asia-Pacific region bringing visitors who spend less and stay for shorter duration than their long-haul counterparts from Europe and the Americas.

While the Bali-based survey suggested an average overall length-of-stay (LOS) of 9.87 days, this figure is down markedly from the 11.71 day LOS recorded just a few years ago. That the actual length of stay may be even lower is suggested by the overwhelming preponderance of Bali visitors who opted for a 7-day visa-on-arrival as opposed to the next alternative of a 30-day visa. This is consistent with other results from the survey which showed that North Asian and East Asian visitors are staying on the Island for only 6.83 days while ASEAN visitors spend an even shorter period of 5.10 days in Bali.

Overall, 55.20% of all visitors to Bali stay less than 7 days.