Developing Problems and Solutions
Hotel Investors Gather in Bali to Explore the Future
The 2nd Annual Indonesian Hotel Investment Conference (IHIC 2014) was held at The Grand Nikko Bali Resort on Friday, June 6, 2014.
Sponsored by the Bali Hotels Association (BHA) and Horwath HTL, more than 130 key players in the regional hotel and accommodation property sector attend the one-day program of keynote speeches, break out session and a networking “power lunch” and closing cocktail reception sponsored byBir Bintang and Artisan Estate Wines.
An opening address by the former Minister of Tourism and Culture, I Gede Ardika provided an opening counterpoint to an otherwise very pro-development agenda of speakers.
Ardika opened the conference with a call for developers and local leaders to carefully consider both the cultural and environmental carrying capacity of Bali. The well-respected former minister challenged his audience to avoid steps and decisions that marginalize the Balinese. Quoted in Bali Daily (The Jakarta Post), Ardika said: “This is our challenge. Tourism practitioners in Bali should rethink whether the current model of development will continue to be tolerated. And local people should be aware [of whether] they wish to let their island be ‘destroyed’ like this.”
Ardika, who was born in Bali, warned that overdevelopment of Bali is surpassing the island’s land, water, food and resource sustainability. Adding: “Investors have to be integrated with the community [members], partnering with them, respecting each other and strengthening local identity. You are the ones on the front line of preserving the attractiveness of Bali.”
As the island has seen an unprecedented growth in new rooms, Ardika described how this has brought room rates under pressure, bringing Indonesia to the unenviable place of being the Southeast Asian country with the lowest hotel rates.
Also opening the conference was Wiryanti Sukamdani, chairwoman of theIndonesian Hotel and Restaurant Association (PHRI) and the Indonesian Tourism Promotion Board, who presented an overview of 288 hotels expected to be opened in Indonesia by 2016. Sukamdani said: “Of the total number, 67 hotels will be built in Bali. I have no idea where these 67 hotels will be built. We don’t have rice fields anymore. We have to preserve the natural landscape and the environment. When we build hotels, we need water, electricity, and food. . . This is a challenge for the tourism industry.”
Sharing PHRI data with the conference delegates, Sukamdani calculated in 2011 that there were 22,000 rooms for sale in Bali. She said that total increased to 25,400 in 2012 and in 2013 stood at 50,100 rooms. The PHRI chairwoman predicted the total would increase to 55,200 before the end of 2014.
These totals do not include the phenomenal increase in commercial villas that pay an increasingly role in Bali’s accommodation sector.
A total of 36 speakers and panelists presented their insights and views on a the investment outlook for Bali; a statistical review of the Indonesian Hotel Industry; the suitability of current development models; how to grow tourism while preserving the indigenous culture and the natural environment; challenges to building a hotel brand in Indonesia; recent innovations in smart design for hotels; the financing of accommodation projects; the challenges presented by social media, OTAs and new travel distribution networks; and the ins and outs of branded residences in Bali.