Why Hospitality Assets in Bali have Defied COVID Economic Slump

Bali named among top post-pandemic destinations

As one of Asia’s top travel destinations, Bali boasts everything nature has to offer, from the sprawling expanse of sandy white beaches skirting the islands, scenic lakes, gorgeous waterfalls, and iconic rice fields to sacred temples. 

Therefore, it is no surprise that Bali has topped the list of most searched post-pandemic destinations by Indonesian and international travelers. 

The travel industry has been hit hard by COVID. Before that, tourists were flocking to Bali all year round. Astute property investors and international home buyers cashed in on this phenomenon, snapping up properties all over Bali with great enthusiasm, and this effect has continued despite the coronavirus pandemic. 

Construction activity has also defied any downward trend, fueled by investor confidence that pent-up travel demand will be a leading factor in the recovery of Bali’s tourism sector. “Although the SARS outbreak in 2003 caused Bali’s foreign visitors to decline by 22.8%, the number recovered by 48% in the following year with occupancy rates and supply of hotels increasing as well,” as explained by Leonard Tay, head of Research at Knight Frank. 
Here are other key reasons why investors are betting big on Bali in the post-pandemic world:

$500bn Rupiah being invested to spur domestic tourism in Indonesia

To stimulate domestic tourism in Indonesia, the Indonesian government has granted 443 billion rupiahs to airlines in the form of discounts for flights to local tourist destinations such as Bali. Some 100 billion rupiahs are also being allotted for promotional activities to spur domestic tourism. 
In addition, the government has launched a joint holiday program called “Cuti Bersama,” or collective leave, to prolong holiday weekends and encourage 4 -day weekends. This has translated into significant increases in search volume for domestic tourist destinations such as Bali, Lombok, and Yogyakarta. 

In fact, since restarting domestic tourism at the end of July 2020, Bali has seen an increase of more than 100% in domestic arrivals. 
Although most would expect the most significant source of Bali tourism to be international visitors, the island received 10.7 million domestic arrivals in 2019, a much higher figure than the recorded 6.3 million international arrivals. Total revenue generated by domestic arrivals in Bali in 2019 was almost equivalent to the US$8 billion contributed by international tourism. 
Bali plans to re-open to international tourists as early as June 2021 
On 26th March 2021, the Indonesian Minister of Tourism officially announced the opening several “Green Zones” in Bali. The plan is to vaccinate the entire community within these zones to ensure safe travel for vaccinated tourists by June or July 2021. The government is also reportedly creating travel bubbles with various countries to boost tourism, such as China, the Netherlands, Singapore, the United Arab Emirates, and other Middle Eastern countries, on the back of the government’s success in controlling the coronavirus outbreak in Bali. 
One thing is for sure – Bali is a popular hotspot for tourists, which is unlikely to change, even in the far future. 

Canggu, the surfing mecca and cooler underground alternative to its neighbor, Seminyak

Most investors seeking to invest in property in Bali would have probably heard of Seminyak or Kuta, famous tourist haunts known to be thrumming with nightlife. Venture up north from Seminyak, and you will find Canggu, a slice of heaven nestled amongst terraced rice paddies and fronted by beaches with waves perfect for surfing.

Many things make Canggu irresistible, from the green juice bars and the arty aesthetic galleries to the local warungs and hideaway hotels. Not too far down the road, city-slick restaurants, co-working spaces, and a thriving coffee scene have sprung up over the years, creating the perfect marriage between the surf scene and the coastal community.

Once a largely rural area away from the tourist-laden areas, Canggu is now capturing the attention of many hungry investors due to its rapid development and stellar location. This up-and-coming area offers all the amenities that Seminyak and Kuta have, with a touch of tranquility that the other two bustling locations lack. 
For that reason alone, construction activity has been most pronounced in Canggu where property boom has seen land value increase 40% – 50% in the last 10 years, driven up by strong interest from foreign investors. 

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