Bali's Push to Regulate Unlicensed Tourist Accommodations

Indonesia's Ministry of Tourism has initiated a campaign to bring thousands of unlicensed tourist accommodations in Bali, Yogyakarta, West Nusa Tenggara, and West Java into compliance with legal standards. Operators were given a deadline of March 31 to register their hotels, guest houses, villas, and homestays. This move aims to enhance service quality, protect visitors, and foster fair competition. Failure to comply could result in delisting from major online travel platforms such as Airbnb and Booking.com.

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Despite the government's intentions, many operators face significant bureaucratic hurdles. I Gusti Agung Ngurah Darma Suyasa, the coordinator for the Tourism Business Licensing Audit programme, noted that only 12,277 lodgings were registered with the Balinese tourism agency, while around 18,000 accommodations were listed online. The gap indicates a substantial number of unregistered lodgings that need to navigate a complex regulatory landscape. Operators like I Kadek Adnyana, who manages multiple villas, reported difficulties related to the Indonesian Standard Industrial Classification codes and the necessity of obtaining multiple permits from various agencies, which can take up to a year.

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To achieve compliance, lodging operators must fulfill 36 requirements, including basic operational protocols for emergencies and adherence to local customs, such as using Balinese script in property names and wearing traditional attire on specific days. The Bali government has introduced a "coaching clinic" to assist business owners in understanding and meeting these requirements, although many operators still express concerns about the feasibility of the compliance process.

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Kadek, who is also the chairman of the Bali Villa Rental and Management Association, emphasized the need for a more gradual approach to enforcement. He suggested that immediate delisting could lead to significant backlash, particularly for those with existing bookings. He welcomed the regulatory efforts to address the chaos caused by illegal rentals, which he claims have resulted in substantial tax losses for both local and national governments. Kadek criticized foreign individuals who sublet long-term rentals as short-term accommodations, arguing that this practice undermines local communities.

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The Ministry of Tourism has been receptive to feedback from industry stakeholders, with discussions focused on simplifying the compliance process. Kadek highlighted the importance of a step-by-step enforcement strategy rather than immediate penalties, which could jeopardize the tourism sector's stability.

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While the Ministry of Tourism has extended deadlines to facilitate compliance, the effectiveness of these measures remains uncertain. Operators report a lack of synchronization between central and regional government requirements, complicating the registration process. The number of unregistered accommodations and the specific challenges faced by operators vary, indicating a need for clearer communication and support from authorities.

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• “We encountered issues related to the Indonesian Standard Industrial Classification codes, and we need to process further permits.” — I Kadek Adnyana, Villa Operator

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• “An immediate delisting from the platform would be difficult for us, as some villas could have already accepted bookings for a year.” — I Kadek Adnyana, Villa Operator

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• “My concern is primarily for the local population. They will become mere spectators in their own country, while foreigners exploit Bali through illegal practices. Every day, we spend perhaps billions, even trillions of rupiah to preserve our customs, only to be taken advantage of by irresponsible individuals.” — I Kadek Adnyana, Villa Operator

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