BALI HOTEL MARKET Summary & Recommendations - Colliers International
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COLLIERS QUARTERLY HOTEL | BALI | Q3 2018 | 3 OCTOBER 2018
BALI HOTEL MARKET
Summary & 2018–2021E
Recommendations Q3 2018 Full Year 2018 Annual Average
Multiple earthquakes, including a > The typical market composition in Bali will still
powerful and shallow 7-magnitude being dominated by those seeking for leisure,
tremor, struck Lombok in July and whilst the corporate and business-related
August. The earthquakes were also felt Demand market will be complementary. Regarding the
on the neighboring resort island of composition of tourists’ nationalities, those
Bali, but there were no reports of within the Asia-Pacific region will continue to
damage. The tourism sector in Bali has compose the biggest market in Bali. Thus far,
been quite stable thus far. The there is no specific target number of inbound
summer holiday and school holiday tourists to Bali. However, looking at the 2018
have underpinned the tourism market statistics, the government of Bali targets 7.5 to
in the island. The number of inbound 8.0 million inbound tourists in 2019.
tourists is quite consistent in
maintaining the overall hotel > By the end of 2018, Bali expects to see
occupancy in Bali. The island will another 999 new rooms, consisting of 354
continue to host several big national
five-star hotel rooms and 645 four-star hotel
and international events, mainly in Q4
rooms. From 2019 to 2021, Bali will have
2018.
Supply 2,134 additional rooms (1,572 five-star hotel
In order to promote the tourism rooms, 424 four-star hotel rooms and 138 141 rooms 2,086 rooms 4,220 rooms
business in Bali, any stakeholder three3-star hotel rooms).
should support positive campaigns
through any forms of media,
particularly social media. In the
currently tough market competition,
we think that hoteliers can harness the
power of social media by endorsing
public figures in social media channels
to produce content about the hotel
where they stay.COLLIERS QUARTERLY RETAIL
HOTEL ||| MARKET
SECTOR JAKARTA
BALI | |2018
| Q3 Q32018
Q2 2018 | DD
3 OCTOBER
| 3 |OCTOBER 20182018
MMMMMM 2018
> The year-end outlook for Bali’s hotel market
is quite bullish given several upcoming big-
scale events that will be held in the island.
Furthermore, Bali will generally be flooded
with tourists who will spend the Christmas
and New Year holidays. Occupancy is
predicted to increase by 4.8% at the end of
2018 to 73%, mainly fuelled by several
Occupancy events to be held in Q4. Up to the end of 70% 73% 73 – 77%
2020, we anticipate a mild increase in
occupancy rate that will reach around 75-
76%. Despite a possible increase in the
number of inbound tourists, the existing and
upcoming supply should intensify a more
competitive atmosphere for hoteliers.
> The ADR is predicted to reach USD111 by the
end of 2018. More pressure in the hotel
competition would lead to an adjustment in
room rate, because hoteliers will generally
prioritise occupancy performance. Given
Room Rate attractive packages or room prices are not
something new, we see that this will USD108 USD111 USD111-USD113
continue to apply in the midst of a
competitive market. Having said that, we
considerably think that room rate will be
quite steady in 2019 and would only be
corrected mildly in 2020 to USD112
Source: Colliers International Indonesia – Research
2COLLIERS QUARTERLY RETAIL
HOTEL ||| MARKET
SECTOR JAKARTA
BALI | |2018
| Q3 Q32018
Q2 2018 | DD
3 OCTOBER
| 3 |OCTOBER 20182018
MMMMMM 2018
Supply Hotel Project Cumulative Supply
Two new hotels started operating during Q3 including one 4-star hotel in
Canggu ad and one 5-star hotel in Ubud. Bali is expecting to see more hotel
projects completion in Q4 this year with 999 rooms.
In the meantime, we have not seen any new hotel development in the Kuta
area, probably due to the scarcity of land. The two hotel projects in the
pipeline that will be built in Kuta will be located on the former location of
Harris Resort Kuta. All in all, however, the supply pipeline in Bali will still be
largely concentrated in the southern part of the island.
Hotel Room Cumulative Supply
Source: Colliers International Indonesia - Research
Tourism
In 2018, the monthly tourism market in Bali performed the best compared
to the previous years. Since February this year, the number of tourist arrivals
through the airport has already exceeded last year’s figures. During the
summer holidays, Bali was flooded with tourists. The top three countries
producing income for the tourism industry include China, Australia and
India..
Source: Colliers International Indonesia - Research
3COLLIERS QUARTERLY RETAIL
HOTEL ||| MARKET
SECTOR JAKARTA
BALI | |2018
| Q3 Q32018
Q2 2018 | DD
3 OCTOBER
| 3 |OCTOBER 20182018
MMMMMM 2018
Number of Tourists coming through Ngurah Rai Airport the Banjar sub-district. They plan to keep the area simple and to preserve
the nature and culture of Bali.
The Central Government pushes its target to have 20 million inbound
tourists to Indonesia in 2020, with Bali as still the main destination.
However, Ngurah Rai International Airport is suffering from overcapacity. In
the meantime, Banyuwangi’s Bliimbingsari Airport is being targeted by the
government to become a low-cost carrier international.
Performance
Two other events that could attract visitors to come to Bali are
Soundrenaline 2018 and the 7th Maybank Bali Marathon 2018.
The month-to-month occupancy performance is quite predictable in Bali, as
the holiday pattern has not changed. In the first two weeks of October, the
IMF-WB annual meeting is expected to drive the hotel business in Bali,
especially Nusa Dua and the surrounding areas. Thus, the Q4 outlook for
Source: Bali Provincial Tourism Agency Bali’s hotel market should be brisk, especially approaching the holiday
season, which has always been harvest time for Bali’s tourism industry..
Bali expects to see big events that could help lift the tourism industry. One
such event is the IMF-WB annual meeting. In anticipation, the government is Monthly Average Occupancy Rate (AOR)
working on the upgrade of the airport, including the addition of two rapid
exit taxiways (for a total of four), apron extension from 53 parking stands to
63 parking stands, additional 30 check-in counters in the international
terminal from 96 units to 126 units, and other additional facilities. Another
infrastructure project is the new underpass to reduce congestion in
Denpasar City.
Infrastructure development in Bali is quite progressing, primarily to
anticipate the increasing number of inbound tourists. This includes the plan
to build a new airport in the north Bali area. However, due to several
considerations, the plan is now being postponed, but not cancelled. The
underlying things are the concerns over the capacity of the existing Ngurah
Rai Airport and the need to distribute the gravity of development in Bali, not
to merely focus on the southern areas.
Related to the North Bali development, the Regency of Buleleng has
announced that they will not grant building permits for new hotel
developments wishing to build in the traditional village areas of Munduk in Source: STR
4COLLIERS QUARTERLY RETAIL
HOTEL ||| MARKET
SECTOR JAKARTA
BALI | |2018
| Q3 Q32018
Q2 2018 | DD
3 OCTOBER
| 3 |OCTOBER 20182018
MMMMMM 2018
The pattern of ADR in Bali in 2018 has so far been in the general trend line.
The hotel market has been in a very competitive environment, fuelled with
adequate inbound tourists. The exiting supply has reached more than 50,000
rooms, excluding villas, hostels or any other types of lodging that invigorate
the accommodation market. On the other hand, the local market is also very
important for Bali’s hotel industry and has been proven to support the
island’s economy during hard times.
Instead of adjusting room rate, maintaining the AOR performance is likely
the utmost priority for many hoteliers, which therefore pushes the ADR to
decline.
Monthly Average Daily Rate (ADR)
Source: Colliers International Indonesia - Research
5Primary Authors: For further information, please contact: Nurul Yonasari Ferry Salanto Senior Manager | Research | Indonesia Senior Associate Director| Research | Indonesia +62 21 3043 6728 +62 21 3043 6730 nurul.yonasari@colliers.com Ferry.salanto@colliers.com About Colliers International Group Inc. Colliers International Group Inc. (NASDAQ: CIGI) (TSX: CIGI) is a top tier global real estate services and investment management company operating in 69 countries with a workforce of more than 12,000 professionals. Colliers is the fastest-growing publicly listed global real estate services and investment management company, with 2017 corporate revenues of $2.3 billion ($2.7 billion including affiliates). With an enterprising culture and significant employee ownership and control, Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide, and through its investment management services platform, has more than $20 billion of assets under management from the world’s most respected institutional real estate investors. Colliers professionals think differently, share great ideas and offer thoughtful and innovative advice to accelerate the success of its clients. Colliers has been ranked among the top 100 global outsourcing firms by the International Association of Outsourcing Professionals for 13 consecutive years, more than any other real estate services firm. Colliers is ranked the number one property manager in the world by Commercial Property Executive for two years in a row. Colliers is led by an experienced leadership team with significant equity ownership and a proven record of delivering more than 20% annualized returns for shareholders, over more than 20 years. For the latest news from Colliers, visit our website or follow us on
COLLIERS QUARTERLY HOTEL | BALI | Q3 2018 | 3 OCTOBER 2018
BALI HOTEL MARKET - APPENDIX
Newly Operating Hotels during 2018
Hotel Name Starred Rating STR Chain Scale Rate Location Region #Rooms Opening Time
Radisson BLU Bali Uluwatu 4-star Upper Upscale Class Jl Pemutih Uluwatu 240 18-Jan
The Element Ubud 4-star Upscale Class Jl Andong No 88 Ubud 152 18-Mar
Fairfield Hotel 4-star Upper Midscale Class Jl Sri Rama No 8, Legian Legian 162 18-May
Artotel Haniman Ubud 4-star Undefined Jl Jatayu, Desa Tebasaya Ubud 22 18-Jun
Eastin Hotel Residence 4-star Upscale Class Jl Munduk Catu Canggu 119 18-Aug
Marriott's Bali Nusa Dua Gardens 5-star Upper Upscale Class Kawasan Pariwisata Lot SW1, Nusa Dua Nusa Dua 79 18-Jan
Como UMA Canggu 5-star Luxury Class Jl Pantai Batu Mejan Canggu 119 18-Feb
Renaissance Bali Resort & Spa Uluwatu 5-star Upper Upscale Class Jl Pantai Balangan Uluwatu 207 18-Mar
Capella Ubud 5-star Luxury Class Jl Raya Bhisma Ubud Ubud 22 18-Aug
Source: Colliers International Indonesia - ResearchCOLLIERS QUARTERLY RETAIL
HOTEL ||| MARKET
SECTOR JAKARTA
BALI | |2018
| Q3 Q32018
Q2 2018 | DD
3 OCTOBER
| 3 |OCTOBER 20182018
MMMMMM 2018
Newly Operating Hotels during 2018
Project Completion
Hotel Name Starred Rate STR Chain Scale Rate Location Region #Rooms
Status Time
Under
YELLO Hotel Kuta Beach 3-star Undefined Jl. Pantai Kuta, Kuta Kuta 138 2020
Construction
Under
The Himana - Mercure Bali Jimbaran 4-star Upper Midscale Class Jl Uluwatu II Jimbaran 209 2018
Construction
Under
Swiss-Belresort Jimbaran 4-star Undefined Jimbaran Jimbaran 273 2018
Construction
Under
Swiss-Belresort Arjuna (condotel) 4-star Undefined Jl Raya Arjuna Legian 163 2018
Construction
Under
Aloft Seminyak 4-star Upscale Class Jl Batu Belig 228 Seminyak 80 2019
Construction
Under
Aloft Bali Kuta 4-star Upscale Class Jl. Pantai Kuta, Kuta Kuta 189 2019
Planning
Under
Tjendana Lifestyle Resort & Beach Club 4-star Undefined Jl Raya Seririt - Singaraja Lovina 55 2019
Construction
Under
Jumeirah 5-star Luxury Class Pecatu Indah Resort Jimbaran 104 2018
construction
Jl Telaga Waja No. 05, Lingkungan Tanjung Under
Samana Condotel 5-star Undefined 250 2018
Terora, Kelurahan Benoa Benoa construction
Under
Hyatt Regency Bali 5-star Luxury Class Danau Tamblingan, Sanur Sanur 375 2019
construction
Under
The Apurva Kempinski Bali 5-star Luxury Class Jl Raya Nusa Dua Selatan, Sawangan Nusa Dua 475 2019
construction
Under
Shangri-La's Nusa Dua Resort & Spa 5-star Luxury Class Kompleks BTDC Nusa Dua 246 2019
construction
Under
Kimpton Resort Nusa Dua 5-star Upper Upscale Class Jl. Nusa Dua (Ex Amanusa Villa) Nusa Dua 50 2019
construction
Under
Waldorf Astoria Bali Uluwatu 5-star Luxury Class Bukit Pandawa Jimbaran 96 2020
construction
Under
Solis Ubud 5-star Luxury Class Jl Raya Bhisma Ubud Ubud 108 2020
construction
Under
Swissotel Bali 5-star Upper Upscale Class Jl Pantai Pandawa Kutuh Jimbaran 170 2020
construction
Source: Colliers International Indonesia - Research
2Primary Authors: For further information, please contact: Nurul Yonasari Ferry Salanto Senior Manager | Research | Indonesia Senior Associate Director| Research | Indonesia +62 21 3043 6728 +62 21 3043 6730 nurul.yonasari@colliers.com Ferry.salanto@colliers.com About Colliers International Group Inc. Colliers International Group Inc. (NASDAQ: CIGI) (TSX: CIGI) is a top tier global real estate services and investment management company operating in 69 countries with a workforce of more than 12,000 professionals. Colliers is the fastest-growing publicly listed global real estate services and investment management company, with 2017 corporate revenues of $2.3 billion ($2.7 billion including affiliates). With an enterprising culture and significant employee ownership and control, Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide, and through its investment management services platform, has more than $20 billion of assets under management from the world’s most respected institutional real estate investors. Colliers professionals think differently, share great ideas and offer thoughtful and innovative advice to accelerate the success of its clients. Colliers has been ranked among the top 100 global outsourcing firms by the International Association of Outsourcing Professionals for 13 consecutive years, more than any other real estate services firm. Colliers is ranked the number one property manager in the world by Commercial Property Executive for two years in a row. Colliers is led by an experienced leadership team with significant equity ownership and a proven record of delivering more than 20% annualized returns for shareholders, over more than 20 years. For the latest news from Colliers, visit our website or follow us on
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