The occupancy paradox
Between January and October 2025, Bali received 5.892 million foreign visitors, up 10.99% on a year earlier. Hotel occupancy for 2025, however, fell to roughly 70%.
In October 2025 the room occupancy rate (TPK) was 64.57%. That was 3.60 percentage points lower than in September.
What Colliers says
Ferry Salanto, head of research at Colliers Indonesia, links the gap to changing traveller preferences. He says unregistered villas offer lower prices and more space. That directly eats into revenue at licensed hotels.
Because these properties avoid taxes, they can keep rates lower. Licensed operators carrying a full tax burden face uneven competition.
The article gives no exact count of unregistered villas. The Colliers view rests on occupancy and arrival trends.
Other factors
Weak domestic demand also played a part. Government budget cuts removed many MICE events (meetings, incentives, conferences and exhibitions) that traditionally filled city hotels.
One proposed fix is to bring unregistered villas into the formal system. Market players believe this would help licensed hotels regain market share.
Why it matters for villa owners
More tourists do not automatically mean higher occupancy for every property. Guests are spread across hotels, licensed villas and unlicensed villas. Price gaps often come down to some operators not paying tax.
That is why authorities have stepped up licence checks on booking platforms. If the drive works, price pressure from the grey segment could ease. For now, the Colliers view describes a market with a sizeable share of unlicensed supply.