Bali’s journey through the tumultuous landscape of global tourism and real estate markets has been nothing short of remarkable. The island, known for its unparalleled natural beauty and rich cultural heritage, has been a magnet for travelers and investors alike. In 2023, Bali’s tourism sector experienced a notable rebound, surpassing the peak performances recorded in 2019, according to the newly released Bali Hotel and Branded Residences 2024 report from Horwath HTL and C9 Hotelworks.
The resurgence in Bali’s tourism industry was largely fueled by the relaxation of COVID-19 restrictions, marking the first full year of recovery from the pandemic’s grip. This liberation unleashed a surge in demand, fueled by the pent-up interest accumulated during the prolonged period of travel restrictions. The Indonesian government’s Visa on Arrival (VOA) program, opened to 89 countries, played a pivotal role in attracting tourists to the island.
Domestic tourism remained a cornerstone of Bali’s visitor market in 2023, with nearly 10 million domestic visitors contributing significantly to the island’s sustenance. While the numbers remained relatively consistent throughout the year, ranging between 700,000 and 950,000 monthly, slight fluctuations were seen in February and March. Despite challenges, domestic tourism continues to be a driving force behind Bali’s resilience.
International arrivals to Bali in 2023 reached 5,273,258, falling short of pre-pandemic levels but showcasing a remarkable recovery, nonetheless.
The shifting dynamics of the foreign tourist mix were notable, with changes attributed to the slow recovery of Chinese tourism. However, markets like Australia, Korea, Singapore, and India have grown.
The top five foreign source markets for Bali saw Australia maintaining its lead, followed by India, China, the United Kingdom, and the United States. While Australia remained the largest international source market, India ascended to the second position in 2023, benefitting from the introduction of direct flights between Bali and India. Notably, Chinese tourism, once a dominant force, saw a decline, emphasizing the need for diversification in Bali’s tourism market.
As Bali’s tourism sector flourished, the island’s real estate landscape underwent a paradigm shift, as revealed by C9 Hotelworks in the report. Traditionally, Bali had focused on tourism rather than branded residences real estate development, distinguishing it from counterparts like Phuket and Koh Samui. However, the emergence of a growing number of branded and managed properties has signaled a new era in Bali’s real estate market.
Branded residences, affiliated with renowned hospitality brands, have gained traction among both local and international buyers. Despite regulatory constraints on foreign property ownership, Bali’s real estate market is expected to see a surge in demand for branded residences, driven by factors such as geopolitical events and lifestyle changes post-pandemic.
The shift towards branded residences reflected a broader trend of increased investment in Bali’s resort-grade real estate market. Domestic buyers, in particular, are seeking second or vacation properties, driving a substantial growth in hospitality-led property developments.
As traffic and land prices continue to be factors impacting developers, geographical movement is creating micro-communities located in prime areas such as Canggu/Berawa, Greater Nusa Dua, and Uluwatu. Recent emerging trends are pushing more projects into Uluwatu and Ungasan, signaling a noteworthy shift in market dynamics.
As prime sites in South Bali become increasingly scarce, there’s a noticeable trend towards investing in offshore island real estate. Islands like Gili Meno, Nusa Lembongan, and Nusa Penida are witnessing a rise in property development, reflecting a shift in investment focus towards these alternative locations. The newly opened Bask Gili Meno is a leading example of this push into island sites where much-coveted oceanfront and sea view property is still available.
Mixed-use projects have emerged as a focal point for both Indonesian and foreign investors, driving greenfield developments and diversification strategies among existing hotel properties.
In conclusion, Bali’s tourism and real estate sectors have undergone a transformative journey, buoyed by resilience and adaptability. With changing market dynamics and evolving consumer preferences, Bali presents compelling opportunities for investors keen on navigating the island’s dynamic landscape of tourism, hotels and real estate.
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