Update August 2022 / Bali Tourism 2022
Since March 2019, tourism in Bali has collapsed with the outbreak of the global pandemic like everywhere else in the world. Bali has successfully overcome many difficult challenges of the past, such as volcanic eruptions and the devastating Bali bombings in 2002 and 2005.
This time, however, the island’s economy and its residents have been hit particularly hard, with tourism directly responsible for over 50% of local GDP. The experts estimate that another 25% comes from business that is indirectly generated by tourism. These sources of income have dried up for more than 2 years. There are virtually no alternatives to tourism.
ISLAND TOURISM IS RECOVERING MORE SLOWLY THAN EXPECTED
Unfortunately, the opening for domestic tourism in mid-2021 did not lead to any relief for hoteliers, restaurant owners, excursion and wedding organizers, drivers etc. Now that Bali is fully open to tourism again, the effects of the global recession are being felt here too. In terms of recovery for the tourism sector, this is anything but conducive.
Nevertheless, there are positive economic developments. Thanks to the excellent infrastructure and above all the recently released visa, with which so-called digital nomads (people who can work from anywhere in the world via the Internet) can stay for 6 months and pursue professional activities, Bali has now an around 110,000 people strong expat community. Areas like Canggu, Ubud and Uluwatu in particular are thriving and villa rental prices are now close to pre-Covid levels.
And bookings in the high-end segment are also stable. There is uninterrupted demand, especially in the 5-star resorts, which enjoy an excellent reputation worldwide. A large part of this
Visitors are domestic travelers from other parts of Indonesia who are spending an extended weekend in Bali. Mainly from Jakarta, the capital and other big cities like Surabaya.
CAUTIOUS OPTIMISM. CHALLENGING TIMES.
One can ask why Bali is one of the most popular holiday destinations internationally: Beautiful beaches? Naturally. Good value for money? Absolutely. Compared to other destinations, however, Bali impresses above all with its incomparable hospitality and rich culture. So why do people come to Bali? Mainly because of the balinese people. And many of them are experienced, qualified masters of hospitality which have tragically had lost their jobs in the last two years. Hotel owners now face the challenge of finding and replacing good staff.
Bali residents agree that tourism in Bali will recover and perhaps even be stronger than ever. The only disagreement is when that will happen. Overall, a recovery phase of between 2 and 5 years is assumed.
What does this mean for hoteliers?
Shortage of staff
Hotel owners now face the challenge of finding and replacing good staff.
The Balinese have always been survivalists, able to adapt to difficult circumstances. Many who previously had “secure” jobs in tourism were forced to rethink and are now pursuing other activities. This means that many employees who had to be laid off during Covid are simply no longer available.
In addition, hoteliers shy away from risks and cannot guarantee long-term employment. And short-term commitments in unstable times are not attractive enough.
Almost without exception, hotel and restaurant operations were either severely reduced or completely stopped during Covid. And with it the digital infrastructure. Websites have often become unmaintained due to the loss of critical resources, and content is now often orphaned. Connections to online travel agencies (OTA) still work at best. However, the employees who fed these and other important systems with current information on a daily basis are no longer there. We see an enormous risk here, especially for hoteliers, since good employees are difficult to find due to the specially required skills.
Book 5 stars, pay hostel price! High-end accommodations in particular were (and still are in many places) forced to offer rooms and villas at dumping prices in order to win the battle for one or the other customer so that at least part of the operating costs can be covered. The price chaos is now perfect and the market for tourists is absolutely non-transparent. 5-star accommodation is currently available for the equivalent of less than 100 euros per night and at first glance the neighbor offers the same category for five times as much, for example.
A lot of tact is now required in order to be able to react strategically to price changes. Dynamic prices aligned with supply and demand and accepted by the customer.
We experience it again and again: As much as a hotelier would like it, forcing customers to accept prices with a crowbar doesn’t work! The medium-term strategy therefore aims to stabilize prices and allow them to rise again cautiously to a level that is usual for Bali, thereby contributing to a certain overall market consistency.
Smart hosplitality marketing
A modern marketing solution should be adaptable to business processes. Covid in particular is forcing companies to revise their business models and explore new opportunities. Even upscale hotels are trying to market food online to generate more sales. At the same time, attempts are being made to lure walk-in guests into the facilities with day passes for pool access and attractive on-site offers such as yoga classes, art workshops, spa therapies or cooking classes, etc. An unthinkable situation for many hoteliers before Covid. Now the flexible, individual marketing of packages and activities is a MUST and indispensable.
What we offer
Luckily we have suitable solutions for these challenges. We are happy to advise hoteliers free of charge and develop individual marketing strategies with solutions that fit your company.
An excellent way to meet the current challenges and at the same time reduce complexity is to use the Profitroom Hotel Booking Engine. See the benefits here.
In addition, we offer our clients the option of temporarily outsourcing digital marketing in order to implement a quick-witted strategy.
After the business has recovered and stabilized and you have hired the right employees, we can train them so that the know-how stays with you.
If you find yourself here and we have aroused your interest, we look forward to hearing from you.