Hotels and restaurants in Bali face the possibility of losing revenue due to the central government’s budget efficiency policy, which reduces the ability of ministries and institutions to hold events and rent hotel facilities.
The Chairman of the Indonesian Hotel and Restaurant Association (Perhimpunan Hotel dan Restoran Indonesia or PHRI) Bali, Tjokorda Oka Artha Ardana Sukawati, explained that hotels in the Nusa Dua, South Kuta, and Badung areas, in particular, are likely to be the most affected by the recent budget efficiency policy. Sukawati observed that hotels in the Nusa Dua area and its surroundings have so far been regular venues for events held by government ministries and central institutions.
Sukawati also noted that many sectors in Bali, beyond hospitality, would feel the impact of the budget cuts implemented by the central government. In addition to hotels, restaurant businesses that usually cater for ministerial events would be affected as well.
“It would have an impact everywhere. The domino effect would be extensive,” said Sukawati to the press on Thursday, 13th February.
Additionally, the Deputy Chairman of PHRI Bali, I Gusti Ngurah Rai Suryawijaya, remarked that the impact of the government’s budget efficiency policy is already being felt by the hotel sector in Bali, as several previously booked meetings have been cancelled.
“Many [were cancelled], especially hotels whose MICE [Meetings, Incentives, Conventions, and Exhibitions] facilities had already been booked, such as hotels in Nusa Dua, Jimbaran, Kuta, Legian, and Sanur,” Suryawijaya previously told the press on Tuesday, 11th of February.
Suryawijaya also noted that other hotels outside Bali have started experiencing the impact as well.
“Almost all areas such as Bandung, West Java, Surabaya, Jakarta, and Bali [whose hotels] had been booked, [but] were finally cancelled because of the limited budget,” he added.
The recently authorised budget efficiency policy is outlined in Presidential Instruction Number 1 of 2025 concerning Spending Efficiency in the Implementation of the 2025 State Budget and Regional Budget. Commission II of the House of Representatives (Dewan Perwakilan Rakyat or DPR) has also approved changes to the budget allocation ceiling for several government ministries and institutions for 2025.