TO DISCUSS YOUR PROJECT OR LEARN MORE ABOUT OUR SERVICES:

  • This field is for validation purposes and should be left unchanged.

Bali Room Rates Hit The Skids

Category: Hotels, Posted:23 May 2016 | 21:08 pm

Over the past few days I have been in Bali and despite the sunshine many hoteliers are shedding tears over declining room rates.

Clearly the hardest hit is the bludgeoning budget and economy sector and smaller off-beach boutique properties.

Prior to arrival I scanned a number of popular OTA’s and was amazed at the rate offerings in the trendy Seminyak area at the entry point of the market where rooms in regionally branded offerings were often as low as USD18 and within the USD20-40 a night band, it was indeed a buyers delight.

From a hotel developer standpoint once you take out the OTA commission it’s hard to understand what is left on the table that could even come close to covering operating expenses much less cover bank loans.

Driving around, the signs of stress are evident as properties are re-branding or changing affiliations after shortly lived management agreements. Talking to hotel staff it’s not uncommon to hear of delayed salaries or cost cutting.

There is a defined market shift with China becoming an increasing influence on arrivals and that is worsening the rate drift. Does it sound familiar Phuket?

One of the growing issues in Bali though is the prominence of taxi mafias and it’s not uncommon to see signs in Canggu, Legian and Seminyak that say Uber, GrabTaxi and Go-Jek are not welcome.

Though from a travelers perspective metered taxis are plentiful and the welcome sign of the Bluebird chain is evident most places.

Bali and Phuket remain yin and yang but the quick urbanzing trend is startling, as is the overbuilding of budget, economy and midscale hotels that all appear to be cast in the same nondescript model. Same, same but no different in any significant way.

For now value-seekers in Bali certainly are getting bang for their buck and for hotel owners, the grail is now turning from a fading hope of holding rates to simply stabilizing cash flows.

Oversupply, followed by the changes in geographic sources of business are the real disruptors in 2016.

 

Other News

Read more

Mind the Gap – Keep People Inspired Event in November

Category: Hotels|Tourism, Posted:22 Oct 2022 | 08:50 am Keep People Inspired (KPI) is the second in a series of Mind the Gap Learning events. The focus of the event is on inclusiveness in hospitality, spanning Phuket’s hotels, tourism and service industries. Inclusiveness is a key element of businesses that rely heavily on human resources and is in effect all about people, whether they […]
Read more

Japanese Luxury Brand Hoshinoya Heads To Niseko

Category: Hotels|Real estate, Posted:14 Oct 2022 | 17:42 pm Leading Japanese hotel operator Hoshino has inked a deal for a luxury resort in Niseko with developer Zekkei Properties. Located in a prime ski-in and ski-out location in Upper Hirafu Village, the 62-unit hotel and residence property will be named Hoshinoya Lodge Niseko. With one of Hirafu’s best locations, the site was formerly occupied by […]
Read more

Phuket and Beyond, A Brief Friday Hotel Update

Category: Hotels, Posted:14 Oct 2022 | 10:24 am In Phuket, Wyndham Vacation Resorts has signed a deal to manage the 50-key Zenmaya Oceanfront in Kalim. The property will be under the Trademark Collection by Wyndham. There are synergies for the hotel given it is located across a main coastal road from the Wyndham Grand Phuket Kalim Bay. Regional carrier Myanmar Airways International (MAI) […]
SiaJai logo

Thailand's Leading Homecare Marketplace