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Bali’s hotel supply declined by 0.8%, signaling a shift in villa preferences

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Bali has witnessed a subtle yet notable shift in its hospitality sector. Recent data in Colliers Quarterly Property Market Report Q3 2023 reveals a 0.8% decline in hotel room supply, with the current availability standing at 59,697 rooms as of the third quarter of 2023. Although seemingly insignificant, this reduction marks a profound change in the island’s tourism dynamics since 2019.

The COVID-19 pandemic’s stranglehold has undeniably impacted global travel and tourism, with Bali no exception. The health crisis has led to significant operational restrictions, forcing several hotels to downsize or cease operations. This contraction in the hotel sector is not just a numerical dip but a reflection of the pandemic’s disruptive impact on Bali’s once-thriving tourist industry.

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Tourists head to other regions in Bali

Despite these challenges, Bali continues to magnetize local and international tourists. The island’s enduring appeal has been a testament to its resilient hospitality sector, which is potentially on the brink of recovery. However, the narrative doesn’t end with mere endurance. The subtle decline in hotel room supply coincides with a perceptible shift in tourist accommodation preferences.

While Bali’s hotel industry was once predominantly concentrated in the Kuta-Seminyak belt, there’s been a noticeable expansion into other regions like Pererenan, Ubud, Canggu, and Uluwatu. This geographical diversification indicates not just the growth of Bali’s tourism sector but also a transformation in what visitors seek — a more holistic, immersive, and perhaps secluded Balinese experience. Consequently, there’s been a burgeoning interest in villa accommodations, offering tourists the privacy, space, and personalized experience often missing in standardized hotel stays.

Are villas the new tourist magnet?

The current tourism trends suggest that travelers increasingly opt for villas over traditional hotels. This preference could be attributed to the pandemic-induced need for social distancing, where villas offer a safer bubble than hotels’ communal spaces. Moreover, villas provide a home-away-from-home experience, with exclusive amenities and the luxury of solitude — a premium in the post-pandemic world.

Furthermore, the diverse hotel classifications catering to various tourist segments have seen a balanced distribution among 3-, 4-, and 5-star hotels. However, hoteliers cannot afford to ignore the growing villa market segment. The shift indicates a market ripe for investment, particularly those looking to own property abroad. Given the current tourism trends, investing in villas could yield high returns.

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Written by Matt Timmermans

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