investments

Prospects of the Bali hotel market

Avoiding mass tourism and remote work are the main trends that will change the hotel business, as well as the resort real estate market in Bali
The head of Jimbaran Hijau Putu Prianta has spoken last week about the prospects of the Bali hotel market and about the company's plans for the near future. This is the largest developer on the island with 270 hectares of land on Bukit between the Four Seasons and Ayana hotels. Here is what Mr. Putu said:

While many Bali hotels were closing until better times, they took and launched the most expensive hotel on the island - Raffles, which is designed for the local HNWI (extremely wealthy gentlemen) market.

Bali faces a shift from mass tourism to more sustainable tourism. A new generation of tourists will strive for boutique hotels that provide guests with a special experience with a focus on health and wellness.
The main segment that will start the recovery is premium and everything that is tailored for wellness
The main segment that will start the recovery is premium and everything that is tailored for wellness. Then there will be a story about remote work with expats as the main driving force and only at the very end mass tourism.

The company will soon introduce new hotel and residential projects on its territory.
On the one point, our views with Mr. Putu completely coincide: avoiding mass tourism and remote work are the main trends that will change the hotel business, as well as the resort real estate market in Bali.
For example, the consequences of this trend would be:
1
The quality of demand is growing
Declining attractiveness of anthill hotels and increasing demand for boutique hotels.
2
Demand for uniqueness
Reduced demand for boring typical design villas and increased interest in designer properties.
3
Redistribution of demand
Falling prices in inflatable areas and rising in areas with a clear master plan.
What buyers of real estate in Bali want as a passive investment:
1
Quality assets;
2
Top locations;
3
Protected tenure schemes;
4
Stable cash flow;
5
Asset value growth.
What developers offer:
1
So-so assets;
2
So-so locations;
3
Grey ownership schemes.
This is primarily due to a conflict of interest. The goal of the development company is to maximize profit by selling its properties at a higher price at low costs. Therefore, somewhere they have to either overpromice, or to cut costs, or not to tell you everything.

Therefore, do not forget to do your own analysis before buying. So that your investment thesis fits to reality first and only then with what the seller tells you.
Alexander Sokovykh
Co-founder Asai Capital Group
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