Hotels and restaurants in Bali are facing the threat of significant revenue loss due to the budget efficiency policy implemented by the central government.
Several sectors, particularly hotels in the Nusa Dua, South Kuta, and Badung areas, are expected to be impacted by up to 50%.
Impact on MICE Revenue
The Chairman of the Indonesian Hotel and Restaurant Association in Bali, Tjokorda Oka Artha Ardana Sukawati, also known as Cok Ace, explained that each hotel in certain areas has regular activities that serve as sources of income.
He gave an example of how hotels in the Nusa Dua area and its surroundings have been frequent venues for events organized by central ministries and institutions.
These hotels were able to increase their income by up to 20% from renting out facilities for Meetings, Incentives, Conventions, and Exhibitions (MICE).
As reported by DetikTravel, Cok Ace stated, “Many events are held in November-December, to the point where they run out of rooms.”
Cok Ace mentioned that many sectors would be impacted by the budget cuts carried out by the central government. In addition to hotels, he noted that restaurant businesses, which typically provide food for ministry events, would also be affected.
“This will have an impact everywhere, the domino effect will be long,” said Cok Ace, who is also a prominent figure from Puri Ubud.
Significant Challenges
However, Cok Ace emphasized that not all hotels and restaurants in Bali would feel the same impact. For instance, his hotels, which are not regular venues for events hosted by ministries or central institutions, would remain unaffected.
“I own four hotels, and I am not affected. Even if the budget is cut, it doesn’t matter because the government or ministries never use my hotels,” said Cok Ace.
The budget cuts are outlined in Presidential Instruction No. 1 of 2025 on Budget Efficiency in the Implementation of the 2025 National Budget and Regional Budget.
The Commission II of the Indonesia National Parliament (House of Representatives) has also approved the changes in the budget allocation ceilings for various ministries and agencies in 2025.
This decision was made following a meeting with several working partners of Commission II on Wednesday (February 12, 2025) in Jakarta.
With this policy in place, the tourism sector in Bali, especially hotels and restaurants, must prepare to face significant challenges in maintaining their revenue stability amidst substantial budget cuts.
Sources: DetikTravel, HarianHaluan
Image: via DetikTravel
