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.
The number of domestic tourists seems to be increasing drastically, especially on weekends or public holidays, which is simply noticeable due to the increased traffic on the island. However, high sales and satisfied business owners are only seen for a short time, if at all, and in isolated niches that had already specialized in the domestic tourism business before the pandemic.
Most of the sales in hotels and restaurants is generated in the high-priced segment, which is more geared towards the international market. Domestic tourists tend to spend significantly less than international vacationers. The business with domestic tourism, which is reflected in Europe in particular by double-digit percentage growth in sales and occupancy and is therefore currently working better than before the pandemic, unfortunately does not work in Bali for this reason.
Cautious Optimism. Challenging Times.
Recently, however, Bali has been welcoming international tourists again. The hoped-for sudden onslaught, especially from Australia, has not materialized so far. Business owners are still optimistic, however, and are slowly trying to prepare themselves for a relatively normal business with healthy growth. However, this brings with it a number of challenges:
- Shortage of staff – 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.
- Digital Channels – Almost without exception, hotel and restaurant operations have either been severely scaled back or completely shut down. And with it the digital infrastructure. Websites were no longer maintained due to the loss of critical resources and content is often orphaned. Connections to Online Travel Agents (OTA) may still be functional at best. However, the people who fed these and other critical systems with up-to-date information are no longer there. We see an immense risk for hoteliers here in particular, since staff are difficult to find due to the specially required skills.
- Pricing – book five stars, pay hostel price! In particular, high-end accommodations were (and still are) 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 operational costs can be covered. The price chaos is now perfect and the market for tourists is absolutely non-transparent. There are currently 5-star accommodations 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. You can get 5-star villas monthly for a price that you would have paid per day before the pandemic. The challenge now is to carefully allow prices to rise again to a level that is normal for Bali and to ensure a certain degree of market consistency. With the help of the right marketing strategy, this goal can be achieved in a reasonable period of time. As a top destination with facilities in the luxury segment, high prices are easy to justify. Top quality and the Bali brand deserves a price tag to match. The island of the gods is simply the wrong address for cheap holidays. This should basically be the marketing message you are giving to the world. Nobody is to blame for experiencing Bali before the market has recovered and prices have settled back down to normal levels. So do that quickly because the situation will most likely change soon.
- Flexible systems – A modern IT application should be adaptable to business processes. In many systems this is not the case. Especially due to the pandemic, businesses are forced to adapt their business models and develop new business opportunities. Even the hotels in the high-end price segment have tried to at least market food online since there are no in-house guests. 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. A situation unthinkable for many hoteliers before the pandemic. Now the flexible marketing of packages and activities is a MUST and indispensable.
With our partners, we developed tailor-made, digital solutions for these challenges which
- Create relief for hoteliers
- Increase direct bookings
- Increase digital visibility
- Save costs
- Are future-proof
If you find yourself here and we have aroused your interest, we look forward to hearing from you.