Despite moratorium, investment in hotels grows
Wasti Atmodjo. The Jakarta Post, Denpasar - 02/12/2011
Despite the prevailing moratorium on the development of new hotels in southern Bali, the flow of investment to the hotel industry has significantly increased, financial institutions have reported.
“Up to September the loans we provided for individual and corporate investors in the process of constructing new hotels have increased by 137.1 percent compared to the ones we disbursed in a similar period last year,” said Indonesia State Bank (BNI) regional head Johnny R. Tampubolon, adding that the loans amounted to Rp 521 billion.
“That’s the loans disbursed through this regional branch only. This branch has a credit ceiling of Rp 15 billion (US$57.83 million). It means that individual and corporate investors who need more than Rp 15 billion would likely go to the central office, and we have no information on the amount of loans provided by the central office to hotel investors from this region,” he stressed.
Earlier this year, Bali Governor Made Mangku Pastika announced the moratorium on the development of new hotels in southern Bali, which covers Badung, Denpasar and Gianyar, following the findings of a government survey that said the region was experiencing a room oversupply problem. Pastika also hoped that the moratorium would divert investment flow to the island’s poorer regions in the east, north and west.
The moratorium was vehemently opposed by the political leaders of the regions, including the regents and mayor. The political tug of war apparently had no impact on the actual pace of hotel development, with new hotels, condotels, apartments and villas continuing to spring up along the region’s shorelines and lush paddy fields.
In terms of the construction sector, Tampubolon pointed out the significant increase of 66.1 percent or Rp 130.2 billion on the amount of credit provided to lenders.
He attributed growing investment in hotel development and the construction sector to the central government’s policy of accelerating development in Bali, West Nusa Tenggara and East Nusa Tenggara.
“The central government has also prioritized the development and promotion of tourism in east Indonesia. Given this setting, the flow of investment to tourism facilities in this region will keep increasing,” he stressed.
Similar information was presented by Indonesia Central Bank (BI) Denpasar office head Jeffry Kairupan.
“The tourism industry is quite dominant in Bali with general trade, hotels and restaurants’ share of the total economy of the island reaching 32.7 percent,” he said.
Out of a total of Rp 28 trillion financial loans injected by banks and other financial institutions into the island’s economy, most were absorbed by the general trade, hotels and restaurants sector.
“The interest of the investors in building hotels in Bali is still very high,” he said.
The fact that Bali was the main gateway for tourism in East Indonesia and that 98 percent of foreign tourists visiting the region arrived through Bali’s Ngurah Rai International Airport would further stimulate that interest, he added.