Hello, I am Dea from the PR team at Bukit Vista. One of our PR initiatives is to provide our community with the latest insights into Bali market conditions for 2024 in the Round Table Talk. Our aim is to empower our partners to make strategic decisions that enhance their competitiveness and operational success.
To this end, we held a Round Table Talk dinner on December 10th with strategic partners including Pak Nengah, owner of Maharaja Residence; I Wayan Agus Sudiantara, Owner of Villa Serenity; and other esteemed partners such as Dinda & Sumiati, managers of Villa Pondok Dahayu and Belle Isle, Pak Rio Oka from Bingin Sun & Moon, and Liga, owner of Villa Bahagia. Together, we discussed potential strategies and shared valuable market insights to effectively navigate the upcoming year.
Navigating Bali Market Conditions in 2024: Turbulence at Year’s End
During our strategic dinner, we discussed the year-end market conditions in Bali, noting the current turbulence in the property management sector marked by rapid and unpredictable changes impacting occupancy rates, revenue, and operational stability. A significant shift is the transition from long-term rentals to short-term options, driven by a notable decrease in Russian tenants due to the Ukraine conflict and the rising appeal of other Southeast Asian destinations. This shift has led to an 80% drop in Russian occupancy, pushing more properties into the short-term rental market.
Supporting this observation, recent data highlight the profound impact of the two-year lockdown from 2019 to 2022, famously described as “the worst thing to ever happen to Bali tourism.” According to the data platform Statista, Bali welcomed 6.28 million foreign visitors in 2019, but by 2021, numbers plummeted to just 1.07 million, dropping to nearly zero with only 20,000 visitors in 2022. Despite these challenges, a new market emerged during the pandemic, comprising digital nomads, wealthy Russian and Ukrainian war refugees, and expats. This group began to settle in Bali, some even starting development companies and purchasing land to build apartments and villas.
With the end of the pandemic and the onset of “revenge travel,” a surge of visitors arrived in Bali, many with long-term plans. Driven by displacement from the Ukraine war, the Russian resident community in Bali peaked at over 100,000, absorbing numerous villas and properties with long-term, upfront rental payments.
Bayu, our CTO at Bukit Vista, highlighted significant trends affecting Bali’s property market during our strategic discussion. He noted, “Additionally, the decline of digital nomads, who are being replaced by AI in remote tech jobs, is reducing the demand for long-term rentals and contributing to an increased supply of short-term properties.” Bayu also pointed out that developers are launching large-scale projects post-COVID-19, such as apartment complexes and eco-villages, which are further saturating the rental market with new offerings.
However, by November 2024, the long-term rental market for durations of 6–18 months began to shrink rapidly, potentially disrupting short-term rental prices. The largest website for long-term rentals, Rumah123, now primarily lists expensive options, yet the inventory—about 85,000 listings—continues to grow. Additional indicators from the Tourism Department suggest a shift from residential to tourism travel, and motorbike rental partners report a decline in long-term rentals since April, with only short-term rentals in demand. Buckwheat sales, a proxy for the Russian resident population, have also dropped since December 2023, with a slight recovery observed in July.
These factors collectively indicate that the increasing supply of short-term rentals, along with newly constructed properties, is expected to flood the Bali vacation rental market. While demand, as indicated by rising airport arrivals, continues to grow, the surge in available properties will likely affect daily rental rates.
During the conversation, Pak Rio, the owner of Sun & Moon Bali, echoed sentiments about the shifting market dynamics. He expressed that he had anticipated these changes, recognizing them as a significant yet under-discussed issue within Bali’s property market. Pak Rio stressed the importance of strategic adaptability among property owners to navigate these challenges effectively.
This perspective was also supported by Bayu and Wayana from Bukit Vista, highlighting our professional insight and proactive strategies to address such market shifts. We have already implemented strategic measures for our partners at properties like Bingin Sun & Moon. Pak Rio noted that despite the turbulence, Bingin Sun & Moon remains a highly prospective property, consistently generating bookings and ROI, fulfilling Bukit Vista’s promises outlined in our business plan.
Adapting to Bali Market Conditions: Effective Strategies for Stability
During a crucial roundtable discussion focused on navigating market turbulence, Pak Nengah of Maharaja Residence and representatives from Bukit Vista, including Bayu, the CTO, delved into the essentials of strategic business planning. Acknowledging the unpredictability of Bali’s tourism market, Bayu emphasized, “We’re focusing on the long game,” outlining how Bukit Vista is positioning properties like Maharaja Residence to manage effectively through various market phases. This involves not just surviving but excelling during both peak and off-peak seasons by implementing unique and dynamic strategies tailored to each property, by our tailored Business Plan, aiming to secure a spot within the top 1% of the market.
Pak Nengah, aligning with this strategy, requested an updated business plan specifically tailored for periods of market turbulence and sought projections on the duration of such phases to set realistic expectations. In response, Bukit Vista acted promptly, providing him with the necessary documentation and insights through the BVGO platform. This initiative culminated in Pak Nengah expressing satisfaction with the strategic support received, highlighting the value of the insights which, although familiar to seasoned hoteliers, proved beneficial for newer attendees at the session.
Benefits of Inspired Investment by Bukit Vista in Turbulent Times
In the face of market turbulence, which can significantly impact property management and investment returns, adopting a inspired investment package approach has proven to be a game-changer for many property owners, including Pak Rio from Bingin Sun & Moon. During the dinner, Pak Rio shared with Inspired Branding package, he faced numerous challenges with staff performance and operational inefficiencies, exacerbated by the informal relationships that often developed between the owner and on-site staff. This led to complacency and inconsistency in service delivery, which ultimately affected guest satisfaction and property ratings.
Recognizing these issues, Pak Rio transitioned to Bukit Vista’s Inspired Investment package, which restructured the entire operational framework of Bingin Sun & Moon. Under this model, all aspects of property management, from guest services to maintenance and staff oversight, were centralized and handled by Bukit Vista’s experienced management team. This shift not only streamlined operations but also introduced standardized procedures and clear accountability for all staff members. The result was a marked improvement in operational efficiency and staff performance, ensuring that the property could maintain high standards even during periods of market uncertainty.
The success of the Inspired Investment implemented at Bingin Sun & Moon by Bukit Vista is not an isolated case. Similar challenges were faced by other properties under Bukit Vista’s management, such as Villa Bahagia and Serenity Villa. Both properties are part of Bukit Vista’s Inspired Investment package, which includes a 20% revenue sharing model, aimed at providing substantial returns to the owners while ensuring the sustainability of their investments.
At Villa Bahagia and Serenity Villa, the transition to Inspired Investment brought about a transformation in operational handling similar to that experienced by Bingin Sun & Moon. The impact of these changes was profound. Both Villa Bahagia and Serenity Villa experienced improvements in operational efficiency and staff performance, which in turn led to enhanced guest satisfaction and increased revenue.
The advantages of this transition became particularly evident during the recent market fluctuations caused by external economic pressures and changing tourist demographics. With Bukit Vista’s full-board management, Pak Rio was able to focus on broader strategic issues rather than getting bogged down in day-to-day operational challenges. This strategic focus allowed for better adaptation to the changing market, optimizing the property’s positioning and marketing to attract new customer segments. Moreover, the comprehensive management support provided by Bukit Vista helped stabilize the property’s revenue streams and enhance its resilience against the ongoing market turbulence, demonstrating the tangible benefits of a full-board management approach in navigating complex and uncertain market conditions.
Empowering New Property Managers: Insights from Bukit Vista’s Round Table Talk
This dinner provided an invaluable opportunity for our new partner-property manager, Dinda, to absorb knowledge from seasoned experts in the field, like Pak Rio and Pak Nengah. As a representative of Pondok Dahayu, Dinda shared the early hurdles she faced stepping into her role as a manager. Her challenges, particularly with unpredictable situations such as power outages, were met with empathetic advice from more experienced property owners. Pak Rio and Pak Nengah emphasized the critical role of effective communication in managing guest expectations and the importance of maintaining professionalism in the face of complaints. This guidance was instrumental in helping Dinda understand that while certain issues are beyond her control, her response to them could shape the guest experience positively.
Furthermore, the dinner acted as a platform for Dinda to learn about not taking guest complaints personally, which is a vital skill for anyone in the hospitality industry. The seasoned property owners shared their approaches to separating personal emotions from professional responsibilities, which helps in maintaining a clear head and focusing on solutions rather than getting overwhelmed by criticism. This advice was particularly poignant for Dinda, who is navigating her new responsibilities amid the dynamic and often stressful landscape of Bali’s property market. As a result, she rated the discussion a perfect 10/10, highlighting Bukit Vista’s exceptional flexibility and responsiveness to client and partner needs. Dinda praised Bukit Vista for providing constructive feedback that proved beneficial for both partner and guest.
Conclusion
The roundtable discussion facilitated by Bukit Vista focused on addressing the challenges of market turbulence and emphasized the need for strategic adaptability among property owners. Key takeaways included the benefits of transitioning to Inspired Investment to enhance operational efficiency and staff accountability, as well as customizing business plans to navigate fluctuating market conditions effectively. Post-discussion surveys reflected high appreciation for these insights: Pak Nengah rated the session possibly a perfect 10 for its relevant industry coverage and proactive strategies; Pak Rio gave an 8 out of 10, appreciating the clarity provided by the Bukit Vista Team and indicating that successful execution could raise his score; Pak Liga rated the session at 8.5, valuing the proactive strategies discussed to handle potential market turbulence. Overall, the session underscored the necessity of proactive management and strategic foresight in maintaining property competitiveness and stability in Bali’s dynamic real estate market.
Join our next Round Table Talk! Whether you’re a current partner looking to deepen your strategic approach or a potential partner interested in the Bali property market, this is the perfect opportunity to gain valuable insights and discuss real-time market dynamics with industry experts. Don’t miss out on enhancing your understanding and expanding your network. Register now to secure your spot and be part of the conversation that shapes the future of Bali’s property market!