A new proposal to introduce a $100 daily tourism tax to Bali in a bid to move upmarket will not work, tourism experts believe.
The proposal was made earlier this year by the head of the Bali Marginal Tourism Sector Alliance Wayan Puspa Negara who said introducing a $100 daily tax as seen in Bhutan would attract high value and high spending holidaymakers.
However, the proposal has been criticised by both tour operators and the Pacific Asia Travel Association (PATA) who have argued that any such move is unlikely to work, while also destroying key markets currently visiting the Indonesian island.
The latest concerns were sparked in February when Negara told local media The Bali Sun that more must be done to crack down on backpackers and other low-spending travellers who were just some of the 6.3 million international travellers to visit in 2024.
He added: “The way to filter [tourists] can be like the country of Bhutan [where] the number of tourists is limited.
“It’s time for Bali to move towards quality tourism by strengthening the quality of the destination and human resources, and this can be done with the local government policy.”
The comments come as the island’s Governor Wayan Koster, who suggested putting a cap on traveller numbers in 2023, launches a crack down on unruly tourists with a nine-point plan covering everything from the correct way to dress when visiting a temple to ensuring every international traveller pays the 150,000 rupiah ($10) Bali Tourism Tax Levy.
Meanwhile, construction of the North Bali International Airport could finally start in 2027, so giving tourism officials the chance to bring more travellers into the quieter north of the island with corresponding hotel developments focused on attracting luxury travellers.
However, Chic Locations partner David Kevan argues any efforts to move the island upmarket are a decade too late.
He says: “There should have been controls 10 years ago, to try and change it now will not work.
“That was when the large hotels really started to take off. We’re talking about hotels with 300 plus rooms and once one was approved there seemed to be eight or nine that came along in the next year.
“That was the opportunity to say let’s build some hotels but let’s make them boutique properties.”
Mid-market mass
Data released by the Bali Hotels Association certainly shows that the main growth in new hotels on the island, which numbered 124 in March 2025, has been in the mid-market range.
The number of hotels charging between $141 and $200 per night grew from 11 in March 2022 to 20 in March 2025, an increase of 81.8 per cent, while those charging $81 to $140 grew by 70.6 per cent to 29 in the same period.
This far outstripped the 27.3 per cent boost seen in the number of luxury properties charging $501 or more, bringing the total to 14, while the nine new hotels with a nightly room rate between $201 and $500 represented an increase of 64.3 per cent to 20 hotels.
While many of the high-end hotels cater primarily for luxury long-haul travellers, many of the cheaper properties are targeted at the much closer Australian market which can access Bali from Darwin with flights taking less than three hours.
As a result and according to the Bali office of the Indonesian Central Bureau of Statistics, the Australian market remains the island’s biggest, providing 1.15 million of the 4.75 million tourists who visited in the first nine months of 2024, 24.2 per cent of the total.
Although this market might not be the biggest spending or longest staying one, Kevan argues that it is key to the island’s fortunes.
He says: “The Australian market is their bread and butter cash cow that allows 80 per cent plus of other things to happen.
“Kuta might attract a downmarket Australian clientele but it provides a huge amount of business and they occupy restaurants and bars that many others would not.
“There’s absolutely no way that Bali could survive without its Australian travellers.”
PATA spokesperson Sam Collins agrees, adding: “They have built hotels for Australians and Chinese travellers and Bali cannot suddenly afford to lose these markets.
“They can’t just half the number of arrivals because of the tax revenues, while the impact on jobs would be phenomenal.
“The vast amount of these tourists cannot and will not pay $100. Bhutan has always been like that but for Bali it is too late.”
European woes
And Collins argues that even if Bali decides to target the luxury market, it is going the wrong way about it, especially after closing its three European tourist boards in Amsterdam, London and Germany two years ago.
As a result, he believes that despite receiving 1.3 million European visitors in the first three quarters of 2024, Bali could have got a lot more while rival destinations are now helping themselves to this lucrative market.
He says: “The luxury hotels want European tourists because such a high percentage of their holiday is the flight cost, they stay in high-end properties and book a long way in advance.
“Indonesia has always looked at Asian destinations like Thailand and Malaysia as places they aspire to be but they won’t put the support packages in place, especially for tour operators.”
Collins adds the decision to introduce the tourist tax in February last year on top of the $35 Bali Visa on Arrival which was introduced in March 2022 has also deterred long-haul travellers.
“$35 doesn’t sound like a lot but all the other countries [in Asia] are going the other way. Vietnam has now removed visa fees for new arrivals as they want to make it as simple as possible to enter the country,” he says.
Collins also argues that the lack of direct flights to Europe operated by national carrier Garuda Indonesia has caused further problems.
He adds: “They are reliant on other nation’s carriers and the capacity has not come back and you are paying a lot more to travel to Bali than other Asian countries.”
All of which means even if the Balinese authorities decide to follow the Bhutanese route, they will have a mountain to climb in order to make it effective.
Instead, Kevan believes the recent comments are typical of the Indonesian government’s approach to policy making.
“A lot of things in Indonesia are done to see if anyone complains and if they complain bitterly then they will reverse it,” he adds.
Whether or not this becomes policy remains to be seen, but the immediate facts show that a $100 daily tax is going to generate a lot of complaints should it be implemented.