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Where is Bali Property Heading?

Where is Bali Property Heading?

Where is Bali Property Heading?

There is a lot of exposure about Bali and its tourism developments, as well as property and uncontrolled developments. There are a lot of critiques and arguments coming up to stop hotel developments and villa developments in certain areas. Even some argue there is a price war going on between hotels and resorts. And we all agree that these issues are serious aspects and need to be addressed properly, as they possess a threat to Bali’s future.

A Norwegian eco-warrior and writer, Arild Molstad, wrote a book that deals with tourism destroying cultures and nature. The book is called Where do we go before it’s too late: two faces of tourism, and one of the chapters is about Bali. He does, however, conclude with the fact that Bali is sustaining its culture much better than most other places. We all know that what attracted the first tourist to Bali was its unique culture and people, not the ‘great’ lifestyle. And this must be kept in some way, but how?

We all need to realize that Balinese and Indonesian culture is indeed a mixture of many cultures; Indian, Chinese, Arab, and European. I was some time ago shown an article dealing with above issues written in the 1930s. So, it’s not a new topic. Everyone somewhat involved in Bali, living here, coming here, has an opinion on the threats and dangers, but no one has a solution; all actions and reactions are based on protection and a rather subjective view of these issues.

Let’s look at some interesting facts and historical aspects of what goes on. And some of these aspects may not be to everyone’s liking, but it’s all meant to highlight issues for a better future for us all.

Land is being bought up at high speed for developments and investments. The Balinese complain that they soon may be without land on their own island and that their ancestors (leluhur) are upset. But hold on, what Balinese are we talking about?  Mainly the mainstream of Balinese that came from Java and what was left of the Majapahit Kingdom. This is 300 to 350 years ago. How did they obtain the land from the Balinese here at that time; the Bali Aga? By way of force, driving the Bali Aga into the mountains. Some will argue this was a long time ago, but it happened not much after Captain Cook discovered Australia. At this stage, at least the takeover has some financial gain attached to it in at least the short term. And it is no secret that some Balinese gain tremendously on these land speculations too. Bali Aga are also originally tribes out of Taiwan, so are they really Balinese?

What about the Bule Aga (expats who have been here for 20 to 40 years) complaining that this must stop, and that we should reduce the number of expats aiming to move to Bali? I suggest that those who have been here the longest should leave and give their spot to others, as there is no monopoly on a spot and it is simply not fair to not allow others to experience what they have. The fact is that all these changes have happened through history many times, the only difference is now it happens a lot faster.

The economy of Bali is driven 82% by tourism and property development. The average economical growth is less than most other Indonesian provinces. There is no industry or natural resources to dig into. So, how can anyone even suggest a stop on developments and tourism?

Balinese culture is in many views attached to farming and a deeply rooted way of life called Tri Hita Karana. This should be preserved, but does it mean that Wayan and Made for their entire lives have to work the rice fields in the traditional way, and not be allowed to work themselves out of a life that might not be the easiest? Does it mean that the Balinese culture cannot evolve and change? Even Parisada (Balinese Religious Board) discuss these things now quiet openly.

Some people say the market growth has slowed down. Last year expat arrivals to Bali grew from 2.97 million to about 3.2 million, a growth of about 7.5%. Domestic arrivals grew from about 6 million to almost 7 million, a growth of about 15%. If one takes this growth of 1.2 million arrivals, and say they all stay in double rooms, with an average stay of about four nights, divide the number of rooms needed per night by hotels with an average of 250 rooms, we come to the fact that Bali needs 30 new hotels every year to keep up with this growth.

What about the price war? What price war? The fact is shown by any serious international and domestic consultancy groups stating that the average occupancy and room rate as well as average spending is at the same level, and in many cases going up. If someone builds a low-end hotel, with a terrible location, no concept, no management, no structure to it, what else does one have to compete with but price? This is what happens; the low end cannot keep up with the market, and I would argue this is good for the market and Bali’s future. How can a moratorium on hotels be executed? If Wayan has a hotel built on a tourism zoned land, and is doing well, and Made next door wants to do the same but he is not allowed, how can this be?

In 2015, several ASEAN and SEA treaties with free flow of capital and labour will kick in, so the only way that Bali and the Balinese, including expats living here, can keep up with everything is to provide the best possible service at the best possible price, which is again, good for Bali. A protective mindset is not possible in these days of globalization.

Some people say it’s all to do with a corrupt government. And this is partly true in the past. But it also has to do with a corrupt market with investors, domestic and expat alike, that do not want to follow regulations, pay taxes or think long term. I dare to say that the government of Bali and Indonesia changes a lot faster than the market, and that is good for Bali.

So, what is the solution to all this? First of all what should be a priority, and is for the government, is infrastructure and garbage. Then all of us need to come together with solutions, not just critics, long term solutions, realizing that what happens cannot be stopped, but we can decide where we take the Balinese tourism market. We need to focus on words like ‘eco’, ‘upmarket tourism’, ‘better zoning’, etc. Everyone doing villas, resorts, restaurants, shops, whatever it is; we all gain from it, and it’s our responsibility to drive this in the right direction. I personally think Bali will find its way, and will still be that unique place that touches us all so deeply in many different ways.

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