5 Reasons Why Hotel Rooms in Bali Should Be Your Next Investment
Investing in hotel rooms is a savvy strategy in the realm of real estate investment. This approach is especially appealing to investors who want to enter the market and diversify their portfolios, and what better place to invest in than Bali, which is becoming one of top global tourist destinations.
Indonesia is serious about attracting tourists and is dangling attractive incentives to boost business and attract foreign capital. The tourism boom has ensured that Bali is now a major tourism hub in Asia, and it offers one of the highest return on investments (ROI). Supported by public infrastructure and development programs (plans announced for an underground LRT that will travel out ot Seminyak with stops in Kuta and Legian) and the island’s reputation as a hub for wellness tourism has helped boost the confidence amongst investors from around the world to consider owning real estate in Bali.
Post pandemic, Bali has proved that the tourism and hospitality industry has rebounded quickly, and the island is one of the most desirable for a beach holiday. Bali welcomed over 5.3 million tourists in 2023, and tourism officials are optimistic that 2024 will exceed 7 million from abroad. According to data released by the Bali Central Bureau of Statistics, over 1.2 million tourists arrived in December 2023 alone.
How Does it Work?
Hotel developers typically seek investors to help finance the construction or development of the properties. Investing in the units is similar to investing in shares within a company, with rights of use (or leasehold) real estate for a specific duration (Typically for up to 25 years, with an option to extend). The units for sale will have an assigned value, with expected returns, schedule of payments, and other included perks. In Indonesia, foreigners are allowed the Right of Use (or Hak Pakai) for real estate – where they are granted an initial period for up to 25 years, that can be extended to a total of 70 years.
By investing in a Bali hotel or resort properties on the island, investors can earn passive income (about 12 – 15% per annum) based on the revenue earned when rooms are booked by hotel guests.
Imagine the perks of earning rental income without the stress for managing the property as an owner since the responsibility of maintenance and continual upkeep are taken on by the hotel operator! Even the furniture and fittings are full paid for, so no additional fees are required for renovation or additional fittings)!
Invest in your Lifestyle
If you are looking for your next property investment, here are 5 reasons why Bali hotel properties are a “suite” investment opportunity.
1. Higher yields. On average, hotel property (commercial) assets yield is 3-4x higher than that of apartments, condos or houses. With residential properties, there are ongoing fees that eat away at returns. Also, in markets where residential yield hovers around 4%, nett returns can fall to 2-3% per annum after accounting for expenses involved in maintenance and other costs. Hotel room investors on the other hand, can generally expect returns of 10% (or more), without any additional ongoing fees or opportunity costs of having an empty unit.
2. Low-risk, especially when investing in trusted brands. While all property investments carry less risk than stocks, hospiitality assets that are managed by international brands are an even safer bet as they have a proven track record of hotel operations and yiekd management, and with their existing community of worldwide customers, can confidently take in bookings for hotel rooms as early as eight to twelve months ahead, ensuring a healthy income stream for investors.
3. No additional and ongoing costs. If you’ve purchased a home or apartment before, you know the price point is just the start of a heavy sum of costs and fees, such as transfer or stamp duty, legal or conveyancing fees, mortgage registration fees, land tax, and registration of title. After that, for ongoing costs, there are council fees, insurance, and utility payments. When investing in hotel projects, purchasing costs are minimal, if not zero.
4. Flexibility of investment options. As larger hotels and resorts have varying room types, investors also have a choice of options, depending on their amount of capital and investment goals. The varying parameters could include minimum deposits, room size, payout schedules, or return structures.
5. Owners’ benefits include Free or discounted holiday stays. One of the best benefits is that investors are given an allotment of days each year to stay for free at the hotel, with discounts offered for additional room nights. Additional perks could be credits for F&B spend, spas, or other access to other venues/services.
After a certain period of ownership, the investor has the option to sell the unit back to the developer, and at an appreciated sale price. These options are not always available. Depending on investment needs or goals, you can enquire about expectations for early returns or your exit strategy.
SPOTLIGHT: Branded hotel investment : The Luc Luxury Villas managed by TUI BLUE
The Luc is set to be the hub of activity in Berawa, conveniently located to trendy eateries and retail shops, offering the perfect blend of luxury and convenience. This luxury project in Canggu, Bali is a stone’s throw away from Berawa Beach and Finns Beach Club. Scheduled to be open in November 2024, the hotel property managed by TUI BLUE, one of the world’s leading hospitality brands, has 108 guestrooms, 14 holiday villas, and 14 commercial spaces.
Headquartered in Germany, TUI BLUE is part of the TUI Group, a leisure, travel and tourism group operating across the world.
Investor benefits: Prices starting from around SGD 90,000, with an expected annual ROI of 12% (to 15%) paid quarterly, with additional free stays annually.
NEW MILESTONE BENEFIT : Up to 31 July 2024, NEW investors for The Luc Luxury Villas will recieve a Complimentary 3-Day, 2-Night Stay For Two (exclude airfare) at The Luc, including Breakfast each morning.
The Luc "Grand Opening" Investor Package
- Complimentary Coffee or Tea Time
Take a break with a free coffee or tea time for two at the Business Lounge of TUI BLUE Berawa Hotel by RR Chocolate, Indonesia’s luxury Bean-to-Chocolate chocolatier.
Free Dinner for Two
Enjoy a complimentary dinner for two at GAB’s Restaurant & Bar.
Complimentary Balinese Massage
Relax with a free Balinese Massage for two at Taman Sari SPA by Mustika Ratu.
Shopping Gift Card
Enhance your experience with a gift card worth IDR 1.5 million, redeemable at our partner shops: Monsieur, Uluwatu Lace, Luzige, Camani, and Pia Agung.
Package Inclusions:
- Investor with Full Ownership 100%
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- 3 Days, 2 Nights stay at The TUI Blue Hotel for 2, including breakfast
- 1 coffee break or tea time for two at the Business Lounge of TUI Blu Berawa Hotel by RR Chocolate
- 1 dinner for two at GAB’s Restaurant & Bar
- 1 complimentary Balinese Massage for two at Taman Sari SPA by Mustika Ratu
- A gift card valued at IDR 1.5 million for shopping at partner shops including Monsieur, Uluwatu Lace, Luzige, Camani, and Pia Agung.
- Investor with Fractional Ownership 60% – 90%
- 3 Days, 2 Nights stay at The TUI Blue Hotel for 2, including breakfast
- 1 coffee break or tea time for two at the Business Lounge of TUI Blu Berawa Hotel by RR Chocolate
- 1 dinner for two at GAB’s Restaurant & Bar
- 1 complimentary Balinese Massage for two at Taman Sari SPA by Mustika Ratu
- Investor with Fractional Ownership 10% – 50%
- 3 Days, 2 Nights stay at The TUI Blue Hotel for 2, including breakfast
- 1 coffee break or tea time for two at the Business Lounge of TUI Blu Berawa Hotel by RR Chocolate
This promotional package is available exclusively for investors of The Luc, based on availability and as determined by The Luc management.
- The offer is valid for both fractional and full ownership investors of The Luc.
- This promotional offer is subject to termination at any time at the discretion of The Luc management.
- The Luc reserves the right to modify or terminate this promotion at any time without prior notice.
- Any additional expenses incurred during the stay, beyond what is outlined in the package, will be the responsibility of the investor.
- This offer cannot be combined with any other promotions or offers.
- The booking window to redeem the free nights is from December 2024 to March 2025.
- Investors can stay from December 1st, 2024 to May 31st, 2025, excluding blackout dates:
– December 20th 2024 to January 5th 2025
– March 24th to April 3rd 2025
– April 15th to April 25th 2025
Access the tourism arrival information from Bali’s Tourism Office here: Bali Tourism Statistics.