Illegal Accommodation Loses Official Hotels In Bali, Occupancy Drops By 20 Percent

Titi Banda Statue In Denpasar Bali (VOI)

DENPASAR The Indonesian Hotel and Restaurant Association (PHRI) Bali suspects that the decline in hotel occupancy in the midst of the high number of tourists is due to the rise of illegal accommodation.

"Data shows that the occupancy rate has indeed decreased compared to the number of arrivals, especially foreign tourists. After we searched, it turns out that many of these tourists are staying in illegal accommodation," said Secretary General of PHRI Bali, Perry Markus, quoted from Antara, Tuesday, April 29.

Perry said the average hotel occupancy since early 2025 has decreased by around 10 to 20 percent. In fact, under normal conditions, hotel occupancy in Bali reached 60 to 70 percent of the total 150 thousand available rooms.

PHRI Bali found that there were housing converted into inpatient accommodation, resembling hotels or villas, without official permission. This finding strengthens the suspicion that the spread of illegal accommodation is the cause of the decline in hotel occupancy rates.

In addition to disrupting tourism data, illegal accommodation is also considered detrimental to registered business actors, because the operations of these illegal places are not accompanied by the obligation to pay taxes.

"This really hit us. With the occupancy down, like data from the Bali Hotel Association, many hotels finally survive by selling rooms below normal prices," said Perry.

He explained that this illegal accommodation generally started from houses owned by local residents which were then rented out to tourists. However, in many cases, foreign tourists actually take other tourists to stay overnight, even by charging higher rates.

In addition, illegal accommodation was also found which is managed by foreign nationals using the name of Indonesian citizens to apply for ownership permits.

According to PHRI Bali, the main difference between legal and illegal accommodation lies in the level of privacy offered. Illegal accommodation generally provides a higher level of privacy, while the facilities and prices offered are not much different from legal accommodation.

Perry stated his belief that the allegation was accurate, considering that PHRI Bali also matched data from the Bali Investment Office and One Stop Integrated Service (DPMPTSP). The data shows that in 2023 hotel construction is still high, but in 2024 there will be a shift in dominance to housing development.

Responding to this issue, Deputy for Industry and Investment of the Ministry of Tourism and Creative Economy, Rizki Handayani Mustafa, said that his party would study more deeply.

He also highlighted the role of a digital ordering platform that is considered to facilitate the rental of illegal accommodation, although until now there has been no definite data regarding the amount.

"Our goal to meet at this time is to agree on joint steps between the government and all relevant parties. We must move based on data, so that strengthening the database will be a priority," said Rizki.