Hotel Sector BALI HOTEL. Hotel Supply. Quarterly Report Q Forecast at a glance. Starred Hotel. Accelerating success.

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1 Quarterly Report BALI HOTEL Q2 Accelerating success. Hotel Sector Ferry Salanto Senior Associate Director Research During Q2, seven new hotels (three 3-star hotels and four 4-star hotels) started operation. The additional new 1,186 rooms brought the cumulative supply of star-rated hotel rooms in Bali to 65,271. The very tight hotel competition in Bali brought the occupancy down by 1.5% to 59.98%. Meanwhile, the ADR dropped 3.3% to USD15.1 QoQ, apparently as the result of the competition to attract guests with attractive packages. Forecast at a glance Supply During H2, there will be 2,237 rooms from 5-star hotels, 3,212 rooms from new 4-star hotels; and 1,11 rooms from 3-star hotels. Demand Bali has targeted a total of 4.4 million visitors through I Gusti Ngurah Rai airport this year up 1% from 4 million visitors last year. Performance The increasingly competitive hotel market in Bali will likely result in the overall occupancy declining further. Hotel Supply Starred Hotel In Q2, seven new hotels three 3-star hotels and four 4-star hotels began operation in Bali. The first of the three 3-star hotels to open was Artotel. Located in Sanur area, this hotel provides 89 rooms. The two other hotels are Kila Infinity 8 Jimbaran by Aerowisata Hotels & Resort offering 18 rooms and Ibis Legian Street by AccorHotels with 16 rooms. As of Q2, there were 26,292 rooms available from 3-star hotels in Bali. Meanwhile, the four 4-star hotels include Hilton Hotels & Resorts, which opened its first upscale class hotel in Bali under the Hilton Garden Inn brand, providing 292 rooms. It is perfect for travellers since it is located within walking distance from Ngurah Rai International Airport. The second 4-star hotel is Novotel, which is also from AccorHotels. It is located within the Ngurah Rai International Airport compound and offering 214 rooms. Louvre Hotels Group opened another property in Bali, named Golden Tulip Jineng Tamansari, with 19 rooms. And finally, the fourth hotel is Nest Bali Hotel operated by Prasanthi, with 115 rooms. Bali now has a total of 21,358 rooms from 4-star hotels. There were no additional rooms for 5-star hotels in Q2. To sum up, 1,186 additional rooms, comprising of star hotel rooms and star hotel rooms have become available in Bali. By the end of, Bali will offer a total of 27,42 3-star hotel rooms, 24,57 4-star hotel rooms and 19,858 5-star hotel rooms.

2 Newly Operating Hotels up to YTD HOTEL NAME STARRED RATING STR CHAIN SCALE RATE LOCATION REGION ROOMS OPENING TIME Ibis Styles Pettienget 3-star Midscale Petitenget Petitenget 134 Q1 Artotel Bali Sanur 3-star Not define yet Danau Tamblingan Sanur 89 Q2 Kila Infinity 8 Jimbaran 3-star Not define yet Jl. I Gusti Ngurah Rai - By Pass Kuta 18 Q2 Jimbaran Bali Ibis Legian Street 3-star Midscale Jl Raya Legian Kuta 16 Q2 Total 3-star hotel rooms 59 Preference Hotel Seminyak / Tijili 4-star Not define yet Batu Belig Seminyak 12 Q1 Seminyak Ramada Sunset Road 4-star Midscale Sunset Road Kuta 271 Q1 Radisson Bali Tanjung Benoa 4-star Upscale Tanjung Benoa Tanjung Benoa 181 Q1 Radisson Bali Legian Camakila 4-star Upscale Padma Utara Legian 116 Q1 Hilton Garden Inn Bali Ngurah Rai Airport 4-star Upscale Ngurah Rai International Airport Kuta 292 Q2 Novotel Ngurah Rai 4-star Upscale Ngurah Rai International Kuta 214 Q2 Airport Golden Tulip Jineng Tamansari 4-star Upper Midscale Sunset Road Kuta 19 Q2 The Nest 4-star Not define yet Jl Pratama Tanjung Benoa Tanjung Benoa 115 Q2 Total 4-star hotel rooms 1,499 The Katamama Potato Head Boutique Hotel Source: Colliers International Indonesia - Research, STR Global 5-star Not define yet Jl. Petitenget Kuta 58 Q1 Total 5-star hotel rooms 58 Total star hotel rooms 2,66 Cumulative Supply of Starred Hotel Projects in Bali Cumulative Supply of Starred Hotel Rooms in Bali 35, 3, 25, 2, 15, 1, 5, 21 Q1 Q2 F F 218F 219F 21 Q1 Q2 F F 218F 219F 3-star 4-star 5-star Source: Colliers International Indonesia - Research 3-star 4-star 5-star Source: Colliers International Indonesia - Research 2 Quarterly Report Q2 Hotel Colliers International

3 New Pipeline HOTEL NAME STARRED RATING STR CHAIN SCALE RATE Holiday Inn Express Tuban 3-star Upper Midscale LOCATION REGION ROOMS project status Wana Segara Tuban 187 Under projected completion TIME Q3 Ivory Hotel Kuta 3-star Not define yet Padma Kuta 5 Under Q3 Kila Citialits Bali 3-star Not define yet Goa Gong Jimbaran 215 Under Q4 Ibis Style Bali Legian 3-star Midscale Padma Utara Legian 113 Recently operate as All Seasons Bali Legian Horison Hotel Kuta 3-star Not define yet Kuta Kuta 15 Under Jambuluwuk Hotel 3-star Not define yet Seminyak Seminyak 115 Under Grand Serela Hotel 3-star Not define yet Ubud Ubud 1 Under Prashanti Hotel 3-star Not define yet Jl Raya Kuta Legian 14 Deferred Premier Inn Hotel Benoa 3-star Economy Jl Pratama Tanjung Tanjung Benoa 2 Deferred Benoa YELLO Hotel Kuta Beach 3-star Not define yet Kuta Kuta 138 Design Stage Q4 218 Surf Hotel Citialits Jimbaran 3-star Not define yet Jl Pedati Banjar Badung 17 Design 218 Banusari Labuan Sait The Premier Inn Condotel 3-star Economy Jl Diponegoro Denpasar 99 Deferred 218 Tegal Alang 3-star Not define yet Jl Pujung Gianyar 6 Design Stage 219 Total 3-star hotel rooms 1,737 Preference Hotel Sanur 4-star Not define yet Danau Tamblingan Sanur 54 Under Golden Tulip Essential Legian 4-star Upper Midscale Legian Kuta 1 Under Swiss-Belresort Arjuna 4-star Not define yet Legian Legian 163 Under Swiss-Belresort Pecatu 4-star Not define yet Pecatu Pecatu 198 Under Four Points by Sheraton Bali - Seminyak 4-star Upscale Jl Raya Petitenget Seminyak 121 Opening Preparation Swiss-Belresort Jimbaran 4-star Not define yet Jimbaran Jimbaran 273 Under Indigo Hotel Seminyak 4-star Upscale Double Six Seminyak 289 Under Sthala Ubud 4-star Not define yet Ubud Ubud 145 Under THE HAVEN Bali Berawa 4-star Not define yet Seminyak Seminyak 61 Under The Eden Hotel Benoa 4-star Not define yet Benoa Tanjung Benoa 23 Under Hotel X2 Bali Breakers - Adaya Balangan Springhill Villas & Resort at Jimbaran Hijau 4-star Not define yet Pantai Balangan Jimbaran 112 Under 4-star Not define yet Jimbaran Jimbaran 25 Under The Edelweiss Ultimo Canggu 4-star Not define yet Canggu Seminyak 15 Abandoned Tamansari Gangga 4-star Not define yet Tanah Lot Gangga, Tanah 64 Under Lot Q3 Q3 Q3 Q3 Q3 Q4 Q4 continued 3 Quarterly Report Q2 Hotel Colliers International

4 HOTEL NAME STARRED RATING STR CHAIN SCALE RATE LOCATION REGION ROOMS project status Hilton Garden Inn - Legian 4-star Upscale Legian Kuta 125 Under Paramapada Hotel 4-star Not define yet Uluwatu, Jimbaran Jimbaran 125 Opening Preparation Swiss-Belresort Ubud 4-star Not define yet Ubud Ubud 42 Under Golden Tulip Saranam Resort & Spa The Himana - Mercure Bali Jimbaran 4-star 4-star Upper Midscale Upper Midscale Bedugul Bedugul 6 Under Jimbaran Jimbaran 258 Under Majestic Water Village 4-star Not define yet Jimbaran Jimbaran 64 Under Harris Resort Benoa Bali 4-star Upscale Benoa Tanjung Benoa 275 Under Veasna Bali-Jimbaran Beachfront suites 4-star Not define yet Jimbaran Jimbaran 2 Under Grand Summit Pecatu 4-star Not define yet Pecatu Jimbaran 388 Under Radisson BLU Bali Uluwatu 4-star Upper Upscale Royal Bali Tulip 4-star Upper Midscale Uluwatu Uluwatu 125 Under Kuta Kuta 136 Under Premiere Inn Bali Jimbaran 4-star Economy Jimbaran Jimbaran 17 Under Ramada Encore Bali Uluwatu 4-star Midscale Uluwatu Jimbaran 2 Under Swiss-Belresort Kuta, Legian 4-star Not define yet Kuta Kuta 278 Under Swiss-Belresort Tanjung Benoa 4-star Not define yet Tanjung Benoa Tanjung Benoa 169 Under Novotel Hotel Batu Belig 4-star Upscale Jl Batu Belig Canggu Canggu 12 Deferred Jivanara Ubud by Preference Hotel 4-star Not define yet Ubud Ubud 42 Permit Process Aloft Bali Ubud 4-star Upscale Tanah Parkir Bebek Bengil, Desa Padang Four Points by Sheraton Bali - Ubud 4-star Upscale Jl. Resi Markandeya, Desa Payogan projected completion TIME Q1 Q1 Q1 218 Ubud 148 Design Stage Q3 218 Ubud 15 Design Stage Q3 218 Eastin Hotel Residence 4-star Jl Munduk Catu Seminyak 12 Under 218 Radisson RED Bali Legian 4-star Upscale Legian Legian 13 Concept Stage 218 Camakila Love Fashion Hotel 4-star Not define yet Seminyak Seminyak 25 Concept Stage 218 Mercure Bali Eco Beach 4-star Upper Midscale Eco Beach Seminyak 138 Concept Stage 218 Grand Orange Pandawa Beach 4-star Not define yet Pandawa Beach Jimbaran 129 Concept Stage 218 Hardysland Nusa Dua Hill Hotel 4-star Not define yet Nusa Dua Hill Nusa Dua 1 Concept Stage 218 Citi Alit Villa Residence 4-star Not define yet Jl Raya Goa Gong, Mangupura Harris Resort Beach Cove Jimbaran Badung 215 Deferred Stage 4-star Upscale Jimbaran Jimbaran 3 Concept Stage Q continuation Preference Hotel Nusa Penida 4-star Not define yet Nusa Penida Nusa Penida 7 Design Stage Q1 219 Skales Hotel & Residences Nusa 4-star Not define yet By Pass Ngurah Rai Nusa Dua 15 Design Stage 219 Dua Golden Tulip Essential Kuta Raya 4-star Upper Midscale Kuta Kuta 1 Concept Stage 219 continued 4 Quarterly Report Q2 Hotel Colliers International

5 HOTEL NAME Wana Prasta Resort Bali by Horison STARRED RATING STR CHAIN SCALE RATE LOCATION REGION ROOMS project status 4-star Not define yet Canggu Seminyak 17 Concept Stage 219 Total 4-star hotel rooms 7,22 projected completion TIME continuation Shangri-La Nusa Dua Resort & Spa 5-star Luxury Kawasan Wisata BTDC Nusa Dua 18 Under Hilton Bali 5-star Luxury Jl Nusa Dua Selatan Nusa Dua 48 Recently operate as Grand Nikko Bali The Westin Ubud Resort & Spa 5-star Upper Upscale The Sarasvati, a Luxury Collection Resort, Bali Lodtunduh, Singakerta Ubud 11 Under 5-star Not define yet Seminyak Beach Seminyak 64 Under Mandarin Oriental Bali 5-star Luxury Bukit Pandawa Jimbaran 121 Under Panghegar Uluwatu Cliff Resort & Spa 5-star Not define yet Uluwatu Cliff Jimbaran 267 Under Anvaya Hotel by Santika 5-star Not define yet Dewi Sartika Kuta 5 Under Avani Hotel - Nusa Dua Circle 5-star Not define yet By Pass Ngurah Rai Nusa Dua 456 Under Kempinski Nusa Dua Bali 5-star Luxury Badung Nusa Dua 2 Under Raffles Bali 5-star Luxury Jimbaran Jimbaran 8 Under Jumeirah 5-star Luxury Jimbaran Jimbaran 16 Under Meritus Seminyak Bali 5-star Upper Upscale Petitenget Seminyak 181 Under Q3 Q4 Q4 Q4 Q4 Q4 Q4 Aryaduta Kuta 5-star Upscale Jl Dewi Sartika Kuta 25 Deferred Andaz Hotel Bali by Hyatt 5-star Luxury Danau Tamblingan, Sanur 144 Under Q1 Sanur Samasta Möevenpick Resort & Spa Jimbaran Bay 5-star Upscale Jimbaran Bay Jimbaran 295 Under De Vasa Hotel Legian Bali 5-star Not define yet Legian Kuta 254 Under PARKROYAL Pecatu Bali Resort 5-star Upscale Pecatu Indah Resort Jimbaran 415 Under Radisson Bali 5-star Upscale Ungasan - Uluwatu, Jimbaran Jimbaran 125 Under Waldorf Astoria Bali Uluwatu 5-star Luxury Bukit Pandawa Jimbaran 96 Under Worldhotel Balangan Bali 5-star Not define yet Balangan Beach Jimbaran 76 Under Worldhotel Dreamland Bali 5-star Not define yet Dreamland Beach Jimbaran 25 Under Solis Capella Resort Hotel 5-star Luxury Ubud Ubud 18 Permit Process Rosewood Tanah Lot Bali 5-star Luxury Tanah Lot Tanah Lot 12 Under Marriott Saba Bay Resort 5-star Upper Upscale Jl Raya Saba Gianyar 2 Under New World Grand Bali Resort 5-star Not define yet Pecatu Indah Resort Pecatu 18 Under continued 5 Quarterly Report Q2 Hotel Colliers International

6 HOTEL NAME STARRED RATING STR CHAIN SCALE RATE Swissotel Bali 5-star Upper Upscale LOCATION REGION ROOMS project status Bukit Pandawa Jimbaran 17 Permit Process Rimba Jimbaran (extention) 5-star Not define yet Jl Karang Mas Jimbaran 86 Design Stage Sejahtera Fairmont Hotels & Resorts 5-star Luxury Bukit Jimbaran Jimbaran 17 Deferred Alaya Ubud extention 5-star Not define yet Ubud Ubud 34 Under Alaya Jembawan 5-star Not define yet Jl Raya Kedewatan Ubud 37 Concept Stage The Amarvana Condotel & Resort 5-star Not define yet Jl Karang Mas Sejahtera projected completion TIME Jimbaran 54 Design Stage Cordis Nusa Dua Bali 5-star Luxury Nusa Dua Nusa Dua 25 Design Stage Q4 218 Renaissance Resort & Spa 5-star Upper Upscale Siligita, Nusa Dua Nusa Dua 2 Post Tender 218 Tamansari Payangan Resort 5-star Not define yet Desa Puhu Ubud 25 Not available 218 Payangan yet Langham Place Hotel 5-star Luxury Ungasan, Uluwatu Jimbaran 117 Design Stage 218 Fashion TV Hotel & Residence 5-star Not define yet Jimbaran Jimbaran 2 Design Stage 218 Resort Goco Retreat Ubud 5-star Not define yet Gianyar Ubud 6 Permit 218 Process The VOIR Suites Hotel & 5-star Not define yet Echo Beach Canggu 258 Concept Stage 218 Residences Canggu Bali InterContinental Resort Canggu 5-star Luxury Echo Beach Canggu 134 Post Tender 218 Waldorf Astoria Bali Ubud 5-star Luxury Desa Sayan Ubud, Gianyar Ubud 1 Not available yet Bugatti Bali Villas and Resorts 5-star Not define yet Pecatu Indah Resort Jimbaran 397 Deferred 219 Yoo Collection Zalakka Hotel 5-star Not define yet Lepang Beach Lepang 175 Post Tender 219 Edition Hotel & Residences 5-star Luxury Pantai Balangan Jimbaran 25 Concept Stage 219 Seven Palm Bali Resort 5-star Not define yet Jl Uluwatu Pecatu Uluwatu 12 Deferred 219 Satoria Resort Hotel Bali 5-star Not define yet Pantai Dreamland Badung 2 Permit 219 Process Trump Resort Tanah Lot 6-star Luxury Jl Raya Tanah Lot Tabanan 2 Concept Stage 219 Total 5-star hotel rooms 9,182 Total star hotel rooms 17,821 Source: Colliers International Indonesia - Research, STR Global Budget Hotel Bali has only two additional budget hotels, the first of which is Zest Hotel, Swiss-Belhotel International s economy class hotel and the group s first hotel in Bali. Zest Hotel offers 51 rooms. The second is Favehotel Kartika Plaza, which is Archipelago International s fifth Favehotel in Bali. It is located in the Kuta area with 18 rooms. In total, there were 159 additional budget hotel rooms as of Q2, bringing the total 3,28 budget rooms in Bali. 219 continuation 6 Quarterly Report Q2 Hotel Colliers International

7 Top Three Budget Hotel Operators in Bali Cumulative Supply of Budget Hotel (Economy ) in Bali Tauzia Management 29% Santika 28% 4, 3,5 3, 2,5 2, 1,5 1, 5 Archipelago 43% Source: Colliers International Indonesia - Research 21 Q1 Q2 F F Source: Colliers International Indonesia - Research Future Budget Hotel Development in Pipeline HOTEL NAME STR CHAIN SCALE RATE LOCATION REGION NO. OF ROOMS PROJECT STATUS Fame Hotel Not define yet Sunset Road Kuta 9 Under Q3 Swiss-Belexpress Kartika Not define yet Kuta Kuta 114 Under Q3 Plaza POP! Hotel Benoa Economy Benoa Benoa 156 Under Q4 Favehotel Raya Kuta (Dewi Economy Dewi Sri Kuta 9 Under Sri) Mintz Hotel Not define yet Wana Segara Kuta 1 Under Zest Kuta Square Economy Kuta Kuta 8 Jimabaran Not define yet By Pass Ngurah Rai Jimbaran 145 Under POP! Hotel Riverview Kuta Economy Kuta Riverview, Badung Kuta 8 Concept Stage Q2 219 Total budget hotel rooms 855 Source: Colliers International Indonesia - Research, STR Global PROJECTED COMPLETION TIME Hotel Demand The Bali Tourism Office recorded that 1,471,216 visitors came to Bali up to April, which showed a 16.8% YoY increase. Australian and Chinese tourists still dominate the composition with 22.7% and 21.4% of the total international visits to Bali. The Bali market is still dominated by Asian countries, followed by European and American. However, other potential markets also need to be explored i.e. the Middle East. Since, the number of tourists from the Middle East showed a significant 92% increase YoY. The Indonesian government had issued a visa-free policy for 169 countries, including Australia, which was the biggest tourist market in Bali. It has already shown a positive impact to Bali tourism. Australia and China revealed a 6.6% and 29.6% increase in the number of visitors YoY respectively. The Bali market, however, is no longer dominated by the Australian market. The emerging Asian market has slowly but surely overtaken Australia. The middle class population from Asian countries has become the new market for tourism in Bali. It is evident that the number of Australian tourists from to YTD has decreased. On the other hand, the Chinese and Indian markets in Bali have improved. 7 Quarterly Report Q2 Hotel Colliers International

8 Number of Passengers Through Soekarno Hatta, Ngurah Rai and Juanda Airports 4,, 3,5, 3,, 2,5, 2,, 1,5, 1,, 5, Comparison of Foreign Visitors Coming to Bali and Indonesia (excluding Bali) 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % YTD YTD Soekarno - Hatta Ngurah Rai Juanda Bali Indonesia Source: Statistics Bureau Office (BPS), Bali Source: Ministry of Tourism and Bali Provincial Tourism Office Comparison of Visitors to Bali and Indonesia 1,, 8,, Number of Visitors by Country Origin (Top 15 Countries) 1,2, 1,, 6,, 8, 4,, 2,, 6, 4, 2, Indonesia Bali YTD Australia China Japan Malaysia South Korea Singapore UK USA Taiwan India France Germany Netherlands New Zealand Russia Others Source: Statistics Bureau Office (BPS), Bali 21 YTD Source: Ministry of Tourism and Bali Provincial Tourism Office 8 Quarterly Report Q2 Hotel Colliers International

9 Proportion of Australia, China and India s Tourist in Bali 3% 25% 2% 15% 1% 5% % Source: Ministry of Tourism and Bali Provincial Tourism Office Performance YTD Australian China India Most people who go to Bali for a holiday are going on leisure trips, which are dominating the market today. This is why the festive seasons are not giving significant impact in the Bali market. The market is dominated by foreign tourism. Average Occupancy Rate (AOR) Monthly Average Occupancy Rate (AOR) 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % January February March April May Bali South Bali Area South Central Bali Area Source: STR Global Average Occupancy Rate (AOR) 1% 9% 8% 7% 6% 5% 4% Although the Bali market is dominated by foreigners, the very tight hotel competition in Bali dropped the occupancy rate by 1.5% to 59.98%. The average occupancy rate (AOR) in South Bali dropped quite significantly by 2.4% to 59.99%. The trending decrease is also apparent in South Central Bali area, which dropped by.9% to 6.44%. 3% 2% 1% % Q1 Q2 Bali South Bali Area South Central Bali Area Source: STR Global 9 Quarterly Report Q2 Hotel Colliers International

10 Average Daily Rate (ADR) The drop in the average daily rate (ADR) may be due from the massive supply of new hotels in Bali. New hotels try to attract the market and at the same time, the existing hotels try to maintain and expand their market. This generally ends up with attractive packages, which is good for hotel guests. Monthly Average Daily Rate (ADR) USD2. USD18. USD16. USD14. USD12. USD1. USD8. USD6. USD4. USD2. USD. Source: STR Global January February March April May Bali South Bali Area South Central Bali Area The drop in the AOR figure was also in line with the declining trend in the ADR figure. In Q2, the ADR for Bali area dropped by 3.31% to USD15.1. The ADR for South Central Bali area fell to 3.5% to USD In South Bali area, the ADR was down by 3.% to USD Average Daily Rate (ADR) USD2. USD18. USD16. USD14. USD12. USD1. USD8. USD6. USD4. USD2. USD. Source: STR Global Q1 Q2 Bali South Bali Area South Central Bali Area Up to Q2, there were 2,66 new rooms in Bali, with 6,559 additional rooms expected by the end of. The new rooms will be made up of 1,11 3-star hotel rooms, 3,212 4-star hotel rooms, and 2,237 5-star hotel rooms. The massive hotel development in Bali has brought not only tight market competition, but also the tendency to promote unhealthy competition. Bali visitors are faced with quite a number of hotel options, whilst the hoteliers should attract more guests to stay in their hotel. Although Bali has a different market compared with those in Jakarta and Surabaya, the unstoppable hotel developments is causing Bali hotels to decrease in performance. Aside from that, hoteliers should notice that there are buildings that are supposed to operate as lodges but apparently run as hotels. Mostly, they offer competitive rates compared with what conventional hotels ask for. This created an additional impact to a hotel s performance. For more information: Ferry Salanto Senior Asociate Director Research ferry.salanto@colliers.com Contributors: Nurul Soraya Senior Research Executive Research Copyright Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report. Accelerating success.