Bali, Indonesia Sentinel — Hotel occupancy rates in Bali dropped significantly by up to 20% in early 2025 due to Illegal accommodations. This case happened despite a steady influx of domestic and international tourists in Bali.
The finding was stated by Indonesian Hotel and Restaurant Association (PHRI) Bali. PHRI reported that from January to March 2025, hotel occupancy rates fell between 10% and 20%, far below the 60–70% average recorded in 2024.
Perry Marcus, Secretary General of PHRI Bali, noted that the trend was unexpected given the rising number of visitors. “Typically, during January, February, and March, we expect occupancy to rise,” Perry said. “Instead, we’re seeing a clear decline, between 10% and 20%.”
Perry attributed the sharp drop to the increasing of illegal accommodations in Bali, such as residential homes converted into hotels and villas. While this illegal accommodation was unregistered, Perry added that these accommodation also didn’t pay taxes.
He explained that the initial suspicion arose from the mismatch between the rising number of tourists and declining hotel stays. “We eventually discovered that these tourists were staying in illegal accommodations,” he said.
Perry emphasized that the problem is not new. PHRI has been warning about the threat of illegal lodging to Bali’s hotel industry for over 15 years. The situation forces hotels to slash prices in an effort to stay afloat.
Many tourists are drawn to illegal accommodations due to their personal connections with property owners or the appeal of greater privacy and luxury amenities, Perry added. “Facilities are excellent, comparable to registered hotels, and in some cases, they even offer better privacy,” he said.
PHRI estimates that there are thousands of illegal accommodation units across Bali, some owned by foreign nationals operating through local nominees.
Perry warned that failure to address the issue could lead to widespread land conversion, endangering Bali’s agricultural areas and eroding regional tax revenues.
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Rizki Handayani Mustafa, Deputy for Industry and Investment at the Ministry of Tourism, said authorities are currently assessing the exact number of illegal accommodations in Bali, stressing the need for accurate data before taking further action.
Meanwhile, Bali’s Head of Tourism, Tjok Bagus Pemayun, said a monitoring team, led by Governor Wayan Koster, has been formed to oversee legal accommodations. “We are finalizing the team’s tasks and working mechanisms. Please wait for the outcome,” Pemayun said.
(Raidi/Agung)
