Hyper Inflation Hits Bali Hotels
With Indonesia reeling in political gyrations over the rollback of the government's fuel subsidy, Bali hoteliers are increasingly concerned over mounting hyperinflation
I was on the resort island this week and many executives are talking about harsh double digit rises to hotels two largest expense items – labor and energy costs.
At the same time the government is moving toward nation-wide cuts on electricity and the highly publicized fuel subsidy program which cost a reported USD23 billion annually.
For hotels, trying to offset the surging costs by raising room rates looks to be doubtful given a large-scale influx of new hotel rooms.
On the hotel investment front, a global decrease in coal prices which has been magnified by China's reduced consumption is creating some waves by developers who are active in both natural resources and hospitality assets.