Bali Hotel & Hotel Residences February 2018

Overview

Bali’s Developers diverge from traditional property offerings, as domestic demand hits plateau – pipeline hotel residences focus on upscale and luxury properties. “As Bali’ Ngurah Rai International Airport closed down due to the volcano eruption of Mount Agung, the island is experiencing one of its quietest high seasons for tourist arrivals. This has significantly affected not only the hotel performance, but also the broader real estate market, which was already shouldering a slowing absorption rate due to supply and demand imbalance.

BALI’S HOTEL NEW SUPPLY

High competition has pushed developers to diverge from traditional product offerings to other alternatives such as vacation ownership and timeshare. Recently, Marriott Vacation Club International and the developer of Swiss-Belhotel Arjuna have launched their units into the market.

Another trend is the shift to international hotel affiliation, as hotel residences seek to widen their target demand to include foreigners while the domestic segment continues to show slow recovery.

With new and rebranded properties presently commanding higher price premiums and lower-tier projects exiting the market, the built-up sales price has risen from the previous year. That said, the increased price points have yet to make up for the declining transaction volume across the market.

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