Bali Governor Announces Plan to Ban Airbnb-Style Rentals Amid Rising Concerns
Denpasar, December 3, 2025 — Bali Governor Wayan Koster has revealed plans to impose a ban on Airbnb-style short-term rentals throughout the island, citing concerns over illegal operations, diminished local government revenue, and adverse impacts on the traditional hotel industry. The announcement was made during the 15th Regional Meeting of the Indonesian Hotel and Restaurant Association (PHRI) held in Denpasar.
Addressing the Impact on Local Economy and Hotels
Governor Koster emphasized that while tourist arrivals to Bali have been increasing steadily, hotel occupancy rates, particularly among PHRI-registered establishments, have not experienced similar recovery. He attributes this disparity largely to the proliferation of unlicensed digital accommodation platforms—such as homestays, villas, guest houses, and short-term apartment rentals—that evade contributing to Bali’s locally generated revenue (PAD).
“We will review this and submit a proposal to stop it,” Koster declared, underscoring that over 2,000 hotels and villas are currently operating without proper permits. “Airbnb does not fully support Bali’s local economy. Many of these units are illegal and pose significant challenges. We will enforce the rules strictly and uniformly. This responsibility belongs not only to the government but to the community as a whole.”
Calls for Regulatory Framework and Enforcement
PHRI Chairman Hariyadi Sukamdani supported Koster’s position, urging for clearer regulations on Airbnb-style accommodations at both national and regional levels. Drawing parallels with Singapore’s strict regulatory model, Hariyadi suggested that daily rentals should be legally categorized and regulated as hotels.
“In Singapore, short-term rental properties must be recognized as hotels,” he explained. “Apartments can only be rented with a minimum stay of three months. Moreover, local residents actively report illegal short-term rental activities, contributing to robust enforcement measures.”
The Singaporean approach reportedly maintains an average hotel occupancy rate of 78%, despite its comparatively high room rates. Hariyadi expressed hope that similar regulations could be adopted in Indonesia, particularly in Bali, where licensed hotels report occupancy rates hovering around 60% even amid rising tourist arrivals totaling 6.3 million in 2024. ### Challenges Posed by Foreign-Managed Rentals
Both PHRI and local officials highlighted concerns regarding foreign nationals managing many illegal rentals. These individuals reportedly lease local properties and market them as daily accommodations through international digital platforms without complying with accommodation standards or contributing appropriately to the local tax base.
“Such profit-sharing models facilitated by these platforms have posed challenges worldwide,” Hariyadi noted. Tjok Oka Arta Ardana Sukawati, PHRI Bali Chairman, added that this practice disrupts the local accommodation market and strains legitimate businesses.
Economic Impact and Revenue Data
Data from the Bali office of the Directorate General of Treasury indicated that Bali’s locally generated revenue reached Rp15.3 trillion (approximately $920 million) as of October 2025, achieving 71% of its annual target of Rp21.5 trillion. Regional taxes contributed the majority, amounting to Rp12 trillion, with Rp7.13 trillion derived from taxes on specific goods and services, including sectors such as food, beverages, hotels, entertainment, and the arts.
Looking Ahead
As Bali’s tourism sector remains vital to the island’s economy, Governor Koster’s administration is preparing a formal proposal to curtail unlicensed short-term rentals, aiming to bolster locally generated revenue and support the hotel industry. Stakeholders have called for collaborative efforts involving governmental agencies, local communities, and industry players to ensure effective enforcement and sustainable tourism development.
The proposed ban reflects broader concerns about maintaining Bali’s economic stability and preserving the integrity of its hospitality sector amidst evolving lodging trends worldwide.
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