Bali has always been a popular destination for travelers, thanks to its beautiful beaches, rich culture, and stunning landscapes. Hello, I’m Jason, a Business Journalist from Bukit Vista and I’m going to walk you through Bali Tourism update.
In 2025, Bali’s tourism sector remains resilient, with the island welcoming 5.9 million international tourists from January to October, marking an 11% increase over the previous year. Despite this impressive growth, an underlying issue is emerging: the rapid pace of new property developments is surpassing the rate of growth in tourist arrivals. This imbalance between supply and demand could pose challenges for Bali’s tourism and property markets moving forward.
Tourist arrivals have remained stable, reinforcing Bali’s status as a leading global travel destination. However, while international visitors continue to flock to the island, the supply of new properties—both residential and commercial—has surged at an even faster rate. By the end of 2025, many developments that were initiated post-pandemic have now been completed, significantly increasing the number of available accommodations and commercial properties. As a result, there is growing concern about the potential oversupply, particularly in the luxury hotel and commercial property sectors.
The effects of this rapid supply growth are becoming apparent, especially in Bali’s commercial property market. According to recent data from Bank Indonesia, the commercial property price index has slowed, with year-on-year growth dropping from 15.09% in Q2 2025 to 14.61% in Q3 2025. While the commercial property sector is still expanding, the pace of growth is not aligning with the steady but slower rise in tourism numbers, leading to an oversupply of retail and office spaces.
This discrepancy between supply and demand is causing market turbulence, as more properties compete for market share. With the rising availability of both hotel rooms and commercial spaces, and the growing preference for alternative accommodations like villas and private rentals, traditional hotel and commercial property demand is becoming more fragmented. The imbalance in supply and demand presents a significant challenge, requiring careful adjustments from property developers, investors, and tourism stakeholders to ensure sustainable growth in Bali’s economy.
This trend indicates that the commercial property sector is still expanding however, the number has outpaced the tourism trend growth. As more properties compete for the market share, it creates imbalance on the supply and demand. Hence, we have market correction.
Bali Tourism Boom: The Pre-COVID Growth and Rise of Digital Nomads
Before COVID (2014-2019), Bali tourism was booming with a high number of international visitors, digital nomads, and investors. The island became a top choice for travelers looking for beaches, culture, and affordable luxury. Many tourists preferred short-term rentals, increasing demand for villas and guesthouses. During late 2018, as remote work gained popularity, Bali became a top destination for digital nomads. The island’s coworking spaces, strong expat community, and affordable lifestyle attracted remote workers from around the world. Popular areas like Canggu, Ubud, and Uluwatu saw rapid growth, with busy hotels and high occupancy rates.
To keep up with Bali tourism demand, developers built new villas, hotels, and resorts across the island. Investors were confident that tourism would keep growing, leading to a property boom. The rental market was strong, with high prices and full bookings during peak seasons. Infrastructure improved, including better roads and a growing airport. Businesses thrived, and Bali became one of the most popular travel destinations in the world. Everything seemed to be on the rise—until the COVID-19 pandemic changed the industry overnight.
Bali Tourism Collapse: The Impact of COVID-19 on Travel and Hospitality
During COVID-19 (2020-2021), Bali tourism faced a historic collapse due to global travel restrictions. International arrivals dropped sharply, forcing many hotels, villas, and restaurants to shut down. With no tourists, rental occupancy plummeted, and businesses that relied on tourism struggled to survive. The usually bustling streets of Canggu, Ubud, and Seminyak became empty, and the local economy suffered a severe downturn.
The lack of visitors also affected the property market. Many construction projects were halted or delayed as developers faced financial challenges and uncertainty. With fewer buyers and renters, property oversupply began to grow, leading to an imbalance between available accommodations and demand. The once-thriving tourism industry was at a standstill, leaving Bali in a state of economic hardship, waiting for the world to reopen.
Post-Pandemic Rebound: The Recovery of Bali Tourist Demand
2022-2023: A Surge in Tourism and Development
As Bali tourism reopened in 2022, visitor numbers surged, fueled by pent-up travel demand. Digital nomads flocked to the island, seeking a remote work paradise, and key global events like the Russia-Ukraine war drove an influx of expatriates and refugees seeking stability. This heightened demand created a real estate boom, pushing developers to construct more properties. Optimism about Bali’s tourism growth encouraged aggressive investment, leading to a rapid expansion of hotels, villas, and co-living spaces.
2024: Record Tourism Yet an Oversupply Crisis Begins
By 2024, tourist arrivals hit an all-time high, with over 625,000 visitors in July alone, contributing to a total of 6.3 million for the year. However, despite this growth, the pace of property development outstripped demand. New projects initiated in 2022-2023 were now nearing completion, flooding the market with new accommodations. At the same time, economic shifts—such as mass layoffs and the rise of AI-driven industries—forced some digital nomads to return home, while the Russia-Ukraine war cooling down led to decreasing number of expatriates. Many long-term rental villas, facing declining occupancy, pivoted to short-term stays, further flooding the market.
2025: Oversupply and Market Turbulence
As early and mid-2024 construction projects finished, Bali entered 2025 with a fat property stock. New villas, guesthouses, and boutique hotels launched alongside a flood of former long-term rentals transitioning to short-term stays. However, tourism growth failed to keep pace with property expansion, creating an oversupply crisis. With fierce competition and price undercutting, many property owners struggled to maintain occupancy and profitability.
Conclusion: A Path Toward Sustainable Growth of Bali Tourism
Bali’s future success hinges on addressing the growing gap between tourist demand and property supply. While the island’s natural beauty and cultural appeal will always attract visitors, ensuring Bali remains a top destination and a profitable market for property owners requires careful planning and a focus on sustainability. To keep Bali’s tourism thriving, it is essential to balance supply and demand effectively.
As we approach the end of 2026, a market correction is becoming increasingly apparent. This is due to overdevelopment in certain areas, particularly in tourism hotspots like Canggu and Seminyak, where rapid property growth has outpaced actual demand. Although Bali’s visitor numbers are increasing, tourist preferences have shifted towards alternative accommodations, such as villas, short-term rentals, and boutique hotels, leading to lower occupancy rates in traditional hotels and commercial properties.
If this trend continues unchecked, excessive property development without a corresponding increase in demand could place downward pressure on occupancy rates and rental prices, particularly in commercial properties and less flexible accommodation types. This could create an oversaturated market by late 2026, leading to diminished profitability for property owners who have not aligned their investments with changing market conditions.
To avoid this, investors and developers must adopt a more strategic, data-driven approach. By focusing on sustainable property growth, targeting emerging visitor preferences, and avoiding oversupply, Bali can maintain its appeal as a sought-after destination. Moving forward, ensuring that development aligns with tourist needs—and not just market speculation—is key to maintaining Bali’s competitive edge while preserving long-term profitability for property owners.
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