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Hyper Inflation Hits Bali Hotels

Author: Bill Barnett. Category: Hotels. Posted: 4th May 2013

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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.

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