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The number of domestic visitor arrivals in Bali is forecast to grow to 12.9 million by 2023 according to our latest univariate forecasting efforts. The number of domestic visitor arrivals in Bali surged to almost 9.8 million in 2018, up 11.7% compared to the previous year according to data released by Badan Pusat Statistik Provinsi Bali. After mediocre growth of only 1.1% in 2017, the number of domestic visitors rebounded in 2018 to track its long term CAGR of 11.8% since 2004.

Over the past five years, 2013-2018, the CAGR for domestic visitors has slowed to 6.9% and is forecast to grow at the annual rate of 5.8% for the period 2019-2023.

In comparison, the total number of international visitors to Bali grew by 6.5% in 2018, from 5.7 million visitors in 2017 to 6.1 million in 2018, falling short of the Bali Tourism Board’s target of 6.5 million international visitors.

Number of Historical & Forecast Domestic Visitors to Bali by Month 2004-2023

Source: Badan Pusat Statistik Provinsi Bali and Hotel Investment Strategies, LLC

Indonesia’s population of about 265 million people presents a huge potential domestic tourism market. The potential is constrained however by the low average household income levels. As the economy grows, private consumption is expected to grow at about 5-6% per year resulting in the growth of domestic tourism generated by a better-off middle class.

As illustrated in the table below, East Java, Central Java and Jakarta accounted for 36.6%, 14.3%, and 12.9% of domestic visitor arrivals respectively, to Bali in 2017 according to the Bali Government Tourism Office

Origin of Domestic Visitors to Bali 2017

City/Region of Origin%
Jakarta12.9%
West Java8.0%
Central Java 14.3%
Yogyakarta6.3%
East Java36.6%
Sumatra2.5%
Kalimantan1.1%
Sulawesi1.7%
NTB/NTT16.0%
Other
0.6%
Total 100%

Source: Bali Government Tourism Office

Star rated hotels were the preferred accommodation type for domestic visitors to Bali in 2017, accounting for 42.3% of respondents, followed by the home of family or friend (31.2%) and budget hotels (18.5%).

Type of Accommodation Used by Domestic Visitors to Bali, 2017

Type of Accommodation Used%
Star Rated Hotel42.3%
Budget Hotel18.5%
Cottage1.8%
Villa2.4%
Family Home/Friend31.2%
Didn’t Stay2.1%
Other1.8%
Total 100%

Source: Bali Government Tourism Office

Given the projected growth in domestic visitors to Bali over the next five years, we believe there is a wide range of opportunities for travel providers and tour operators to service the needs of this group in both the star-rated and budget hotel sector. To download our report, “Short-Term Forecasts of Visitor Arrivals to Bali, 2018-2020,” please refer to our blog.