Sunny days ahead for Bali holiday villas

DENPASAR (Bali): The allure of enjoying one's holiday within a luxurious villa — complete with personalised service — has proved too strong for tourists to resist. As a result, the tropical island has seen a surge in the number of private villas built especially to cater to the affluent market who are not shy about their demands and are willing to fork out large amounts for the extra perks.

The island's tourism growth — it saw an 11% rise in the number of tourist arrivals last year — and Indonesia's skyrocketing economic expansion are also propelling discretionary investment in luxury hotel-branded villas, according to regional hospitality consulting firm C9 Hotelworks' latest research report, the Bali Hotel Branded Villa Update.

International hospitality brands that have jumped onto the bandwagon are W Bvlgari, Banyan Tree and Alila. Companies such as Elite Havens and the new upstart Marketing Villas Ltd headed by former AsiaHotels.com co-founder Jon Stonham are also gaining a significant share of luxury rentals, said C9 Hotelworks managing director Bill Barnett in a statement on Wednesday, July 20. It is estimated that some 222 private pool villas and 1,000 upscale villas currently grace the island.

Local interest in privately-built villas has also been positive, with many wealthy locals mainly from Jakarta stimulating transactions across the island, Barnett added. According to a global wealth report by financial institution Credit Suisse, Indonesia has over 60,000 US dollar millionaires in what is Southeast Asia's largest economy.

A luxury private villa in Bali invariably features a swimming pool, sun deck, semi-open living environment, fully equipped kitchen, exclusive bathroom facilities and air-conditioned bedrooms. It makes a great option for families with children or a romantic sanctuary for couples and honeymooners who place a high value on personal space and privacy,

Branding and integration with international management have been cited as the key tool to the success of such properties. The figures speak for themselves: The combined annual occupancy figure of such holiday villas can rival those of an upscale hotel, said Barnett.

The report also revealed the majority of inventory as one-bedroom units, followed by two-bedroom units, representing 63% and 12% respectively of the total. The top favourite locations for such villas are Seminyak, Bukit and Uluwatu. It also noted an unprecedented flood of condohotels into the market with 4,000 to 5,000 units currently in development or in the planning stage.

On the marriage between hotels and real estate, Barnett said: "Non-traditional accommodation such as private holiday villas and estates are increasingly becoming a competitive factor in the mainstream accommodation industry."

Going forward, Barnett is cautiously optimistic about Bali. "Maintaining market equilibrium remains a poignant, yet unanswered question. At the back of my mind lagging infrastructure and future oversupply will most likely create volatility," he said. Nevertheless, key infrastructure expenditure leading up to APEC 2013 in Bali is setting the stage to stimulate demand in both the hospitality and property sectors.