Hotel business in Bali: one of the best hospitality industry



Hotel business in Bali: one of the best hospitality industry

In recent years, Bali has become a tourist magnet, receiving millions of visitors from all over the world. However, not everyone comes to the island just for vacation. The growing demand not only supports the island's economy but also stimulates the development of the hotel sector. Find out more about why it is worth investing in the hotel business in Bali, how to open your own hotel and how much profit you can make by investing in tourist real estate in Bali

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Breathtaking landscapes, diverse culture, vibrant atmosphere, unique climate, amazing nature, mountains, beaches, surfing and diving make Bali a magnet for travelers from all over the world. 5+ million international tourists and 11+ million domestic travelers visit this Indonesian island every year. Visitors come here from Australia, USA, Great Britain, Singapore, France and many other countries of the world.

High demand is contributing to the development of the hotel sector in Bali. Currently, the hospitality industry in the region is actively growing, which creates additional opportunities for international businessmen and investors.

Why should you invest in the hotel business in Bali?

The main advantage of Bali compared to other resorts is that the tourist season here lasts all year round, travelers arrive on the island constantly.

The cost of living is quite adequate, especially against the background of prices in Europe.

Also, the hotel market on the island is just developing, currently only 15,000 rooms in 5-star hotels and 18,100 rooms in 4-star hotels are available in Bali. Most of the highly rated hotel rooms in Bali are located in Badung Regency. In total, there are only 46,300 rooms in classified hotels on the island.

The average occupancy of hotels during the year in Bali is 65-80%.

High demand and low competition create ideal conditions for running a hotel business in Bali.

How to open a hotel in Bali?

Many foreigners are thinking about starting their own hotel in Bali, because such an activity allows you to combine living in this heavenly place with additional income. However, opening your own business on the island can be quite difficult, because Indonesian legislation has certain peculiarities.

Before starting to build your own hotel, you should analyze the following factors:

- location and size of the land plot;

- the percentage of land that is allowed to be used for construction;

- predicted number of rooms;

- the type of accommodation you plan to open in Bali: B&B (bed and breakfast), small hotel, full-fledged comfortable complex, etc.;

- possible legal restrictions, because most areas in Bali have different local laws and zoning rules, for example, because of the dense population in some places, building bans have been imposed.

At the second stage, choose the type of future hotel:

1. Pondok Wisata is a bed and breakfast hotel with less than 5 rooms, the most budget option, but it can only be opened by local individual entrepreneurs or companies. Foreigners are not allowed to legally own this type of property in Bali.

2. Melati Hotel (non-star hotel) is a small non-star hotel that can be opened by a foreign investor, provided that at least 33% of the shares of the establishment will be owned by an Indonesian shareholder.

3. Hotel Berbintang (3-star, 4-star and 5-star hotel) - accommodation establishments of this type must have at least 25 rooms. In addition, additional infrastructure should be built at the hotel - a business center, a restaurant, a swimming pool, wheelchair access and other standard hotel amenities. A foreigner has the right to own 100% of shares.

The third step is to check the capital requirements

When registering a business in Bali, you must undertake to invest 10 billion rupiah (that's almost 650 thousand dollars) in the country's economy for a certain period of time or to attract investments of this amount.

The fourth stage is to prepare the documents

An approximate list of documents for opening a hotel in Bali: company deed, main license, legalized proof of residence, taxpayer identification number, labor report, business certificate, etc. If your hotel has a restaurant that sells alcohol, you will need to obtain a liquor license as well. In addition, several other licenses may be required: environmental and hygienic, etc.

Given Indonesia's complex legal framework and high capital requirements, quite often international businessmen choose not to build their own hotel, but to invest in apartments or part of a hotel under construction or already built.

How much profit can you get from investing in tourist property in Bali?

Bali's tourist real estate market has one of the highest returns in the world, averaging 15% per annum, excluding housing price increases. For comparison, the average yield of this type of real estate in other countries is 5%.

It is also important to note that:

- The annual increase in the value of tourist real estate is 15–20%.

- The cost of rent on the island also increases by 15-20% per year on average.

- Purchased real estate can be repaid in 5-6 years.

How to find the perfect hotel property investment location in Bali?

When choosing real estate for investment, it is necessary to carefully look for a developer, it is better that he has international work experience. It is also important to pay attention to the type of real estate, location and existing infrastructure.

A profitable investment option in Bali is the purchase of premium apartments, in particular in the ANTA Residence Canggu complex from the reliable international developer ANTA Group.

ANTA Residence Canggu is a 5* hotel complex with a unique infrastructure, located in one of the most popular areas of Bali - Canggu, 7 minutes from the ocean. This is a complex of premium apartments, in which everything is thought out to the smallest detail for a perfect vacation.

The infrastructure of ANTA Residence Canggu includes:

- jungle roof-top (a bar with a jungle on the roof);

- tropical infinity pool with ocean view;

- world-class restaurant and coffee shop;

- underground parking with your own bicycle;

- coworking;

- personal golf cart transfer to and from the beach;

- a children's area with a babysitter;

- surfing school;

- SPA beauty salon;

- smart gym;

- venue for events on the roof.

According to experts, the amount of net profit from the sale of apartments purchased in Bali during the construction phase will be 44% in three years. When renting real estate, you can return the investment in 5-6 years. Therefore, Indonesia, in particular the island of Bali, is a promising destination for hotel business.

Useful expert advice

Anton Taranenko is the founder and CEO of Visit Ukraine and Visit World online platforms and the owner of the international development company AntaGroup:

The hotel business in Bali is developing at a remarkable pace. Here you can find hotels of all levels, ranging from simple guest houses on the beach to luxury resorts with all possible amenities. 

The development of the hotel industry in Bali is an important component of the island's tourism infrastructure. A large number of jobs are created thanks to this industry, as new hotels and apart-hotels, various villas and bungalows are being built on the island very actively, and courses and educational institutions for future hotel professionals are being opened.

The tourism and hotel business has become the main source of income for local residents and the foundation for infrastructure development on the island. Thanks to its exoticism, comfort and natural luxury, Bali continues to attract tourists from all over the world. 

Undoubtedly, the hotel business in Bali is a profitable investment and business option. If we consider real estate in Bali for successful investments, the most profitable option is to invest in premium apartments in apart-hotels. These are apartments or studios that are part of a hotel. Owners of such apartments combine the opportunity to live in an apartment with hotel services and, if desired, receive passive income from renting out apartments 

Our company ANTA Group is currently creating a modern 5-star hotel complex with a unique infrastructure on the main street of Changgu - Batu Bolong, 7 minutes from the Indian Ocean. 

ANTA Residence Canggu includes 113 apartments with modern renovation, quality furniture and appliances. It combines all possible services: a restaurant, a coffee shop, a coworking space, beauty and spa salons, an event hall for parties and concerts, a gym, and a surf school. You can choose from 5 options of apartments starting from $135,000 thousand and with an area of 38 m². 

For the comfort of apartment owners, the international hotel operator Ribas Hotels Group will provide comprehensive management.

Turkey also has an attractive real estate market where you can get a high return on investment. Most investors prefer to buy business-class apartments in Turkey, because such an investment is a good option, both for living and for investments. Read more about the advantages of investing in real estate in Turkey here.

Daria Rogova, Head of Insurance at Visit World

To move, travel or work safely in a new country, you will need health insurance. You can apply for an extended policy on our website here.

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More articles on the topic: 

Reasons for choosing global investment: the power of international investment.

Global Investment Opportunities: Where to Look for the Best Deals?
Investing abroad: how to invest in foreign markets.

Comparison of investment instruments: pros and cons of investing in real estate.

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