Volcano jitters spook Bali tourism

PHUKET, 7 February 2018: China jitters and buzz-killing travel advisories can alter hotel trading to boom, bust and boom yet again, says the latest report on Bali’s tourism.

The year 2017 was the best of times and the worst of times for Indonesia’s tourism icon Bali, according to the newly released Bali Hotel and Hotel Residences Market Report by leading consulting firms Horwath HTL and C9 Hotelworks.

For the first nine months of the year, the report says market demand climbed only to be undermined by global news headlines over Mount Agung’s volcanic activity in October, which in turn resulted in massive hotel cancellations.

As Bali sets a course to recover this year, the underlying story is not just about how big events can create enormous trading volatility in tourism markets.

Last year, both Bali and Thailand’s Phuket saw mainland China become their top source of international business. Between January to September, China visitors to Bali rose by a stunning 59% in year-on-year growth

In a reversal of fortune looking at the pre-volcano period the legacy Australia market declined, while on the other side of the board India shot up by 54%, the UK with 17% and Japan tallied up at 14%.

Talking about the crisis Horwath’s Indonesia-based Director Matt Gebbie said “the over-reliance on one-trick ponies, in this case Australian and Chinese segments, went from boom to bust after the volcanic media-frenzy created a travel advisory by Australia.

“It triggered cancellation of travel insurance and ensuring flood of lost business. This was compounded when China shut down flights to Bali, thereby killing off the fatted calf.”

Focusing on the current performance, C9 Hotelworks’ managing director, Bill Barnett notes: “The island is regaining momentum and trading by the second quarter of this year is clearly showing signs of widespread stability. Bali’s core domestic segment represents its most important source of business and numbers are up. The buzz killer of travel advisories remains inherent across the globe and the time between big events and recovery is increasingly become shorter and shorter.”

Summing up the future for Bali, the reality is that life under the volcano is the ‘new normal’. With over 12,000 new hotel rooms under development across the Island of the Gods, the ongoing rush of business from volume markets remains the rule rather than the exception here and in Southeast Asia’s other stressed out resort destinations, the report concludes.

To download the Bali Hotel and Hotel Residences Market Report https://www.c9hotelworks.com/downloads/bali-hotel-hotel-residences-2018-01.pdf