Hotel owners in Bali are set to raise their room rates by up to 15 percent to offset the government’s planned fuel price increase.
Bali relies heavily on tourism for revenue and jobs, and hotels on the island are bracing for their operational costs to go up along with the fuel prices.
The chairman of the Bali chapter of the Association of Indonesian Hotels and Restaurants (PHRI), Tjokorda Oka Artha Ardhana Sukawati, said hotels would have little choice but to raise room rates to cover the higher operational costs.
“The increase is really basic. The hike will range between 10 and 15 percent,” Tjokorda said on Tuesday.
Perry Markus, secretary of the PHRI in Bali, said the room rate increases of 10 to 15 percent had been calculated based on typical operational costs.
“Energy costs make up 30 percent of a hotel’s operational cost and we’re only increasing rates by half of that,” he said.
Perry said the government’s plan to raise fuel prices would affect tourist arrivals.
“Past experience showed there was a slowdown of around six months before it began to pick up again,” he said.
Tjokorda said hotels that had already signed contracts with travel agencies locking in room rates would feel the pinch.
Many hotels have contracts with agencies that run until the end of the year.
“Visitors who come on their own will get the new rates,” he said.
The government plans to raise fuel prices starting in April, which will force hotels in Bali to raise rates during the low season.
Tjokorda, who is also the head of Gianyar district, said budget hotels would suffer a serious blow from the fuel-price hike.