Bali governor plans crackdown on Airbnb-style rentals over lost revenue and declining hotel occupancy
Governor Wayan Koster plans to halt Airbnb-type accommodation in Bali, citing weak regional revenue contributions and thousands of unlicensed units. Tourism groups warn that foreign-run rentals distort the market and reduce local economic benefits.
- Governor Wayan Koster plans to stop Airbnb-style accommodation in Bali, citing low contribution to regional revenue and widespread unlicensed operations.
- More than 2,000 unlicensed hotels and villas and an estimated 16,000 online-listed units are flagged for enforcement.
- Tourism stakeholders say foreign-run rental schemes distort the market and reduce hotel occupancy despite rising visitor numbers.
INDONESIA: Bali Governor Wayan Koster has announced plans to stop Airbnb-type accommodation in the province, arguing that such operations do not contribute adequately to regional revenue (PAD).
According to statements delivered at the fifteenth regional meeting of the Indonesian Hotel and Restaurant Association (PHRI) Bali on 3 December 2025, the governor said the proposal would soon be formally submitted.
Koster stated that digital-based accommodation platforms have affected regional revenue, especially from hotel and restaurant taxes.
He noted that tourist arrivals have risen, yet occupancy rates among PHRI-affiliated hotels have not increased in tandem.
According to him, this imbalance reflects the expansion of unregulated and untaxed accommodation marketed online.
Koster said there are more than 2,000 unlicensed hotels and villas across Bali requiring enforcement.
He called on tourism stakeholders to cooperate with the provincial government in ensuring that accommodation contributes to Bali’s economic structure.
Governor: unregulated Airbnb-type rentals undermining regional revenue & hotel occupancy
In his remarks, he argued that Airbnb-type activity does not fully support Bali’s local economy.
He added that illegal and non-compliant operators would face firm action.
According to PHRI Bali Chair Tjok Oka Artha Ardana Sukawati, the association currently has 378 registered accommodation members. He noted that this number is far below the estimated 16,000 units marketed online through short-term rental platforms.
He explained that foreign nationals are among those operating such units.
Some reportedly rent local houses and re-lease them as short-term accommodation through digital platforms.
He said this practice undermines the relationship between rising visitor numbers and regional revenue or occupancy levels.
Short-term rental surge blamed for weakening hotel earnings despite rising tourist arrivals
Data from the Regional Office of the Directorate-General of Treasury (DJpb) for Bali showed that, by October 2025, regional revenue realisation reached Rp 15.3 trillion (about US$985 million), or 71 percent of the Rp 21.5 trillion (about US$1.38 billion) target.
The figure reflects a 9.58 percent year-on-year increase.
Local tax revenue contributed Rp 12 trillion (about US$772 million) to the total regional revenue.
Of that amount, Rp 7.13 trillion (about US$459 million) came from the tax on specific goods and services (PBJT), which grew 14.76 percent annually.
The tax includes food, beverages, hotels, arts and entertainment.
Koster said many private houses and villas are rented by foreigners at low prices.
He stated that such properties avoid taxation and place licensed hotels, which comply with tax obligations, at a disadvantage.
He said data on these properties has been collected and proposals for enforcement will begin in 2026.
He emphasised that provincial authorities and tourism industry stakeholders must act collectively.
He reiterated that the issue is not solely a government responsibility, but one requiring cooperation across Bali’s tourism sector.
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