Bali, often referred to as the “Island of the Gods,” has long been one of the most famous tourist destinations globally, renowned for its stunning natural beauty, vibrant cultural heritage, and the warm hospitality of its people.
As a major destination in Indonesia, it draws millions of both international and domestic tourists every year, contributing significantly to the island’s economy.
Reflecting on the past year provides valuable insight into the achievements, difficulties, and potential opportunities that Bali may encounter as it progresses into 2025.
Bali’s Investment Landscape: Stronger Foreign Direct Investment
In 2024, Foreign Direct Investment (FDI) accounted for the largest portion of investments in Bali, totalling IDR 10.6 trillion, which made up 59.2% of the total investment value on the island, which reached IDR 17.99 trillion.
However, the distribution of investment is highly concentrated in the southern regions of Bali, which includes Badung Regency, Denpasar City, Gianyar Regency, and Tabanan (often referred to as Sarbagita).
Specifically, Badung Regency received the highest level of investment, amounting to IDR 9.34 trillion, or 51.9% of the total.
Denpasar City followed with IDR 3.27 trillion (18.2%), and Gianyar Regency with IDR 2.89 trillion (16.1%).
In terms of sectors, the bulk of the investment in Bali throughout the first half of 2024 was directed towards hotel and restaurant construction, followed by the development of housing, industrial estates, offices, services, and utilities such as electricity, gas, and water.
Bali’s Property Market: A Thriving Sector Amidst Rising Demand
Bali’s property market, however, continues to thrive. The tourism boom and growing foreign investment have led to a steady increase in property prices. Based on REID data, property prices in Bali increased by an average of 7% annually over the past five years, with some areas experiencing more significant growth. Bali also offers the highest rental yield in Indonesia, reflecting the potential for profitable property investment.
Certain areas have seen even more significant growth, and Bali offers some of the highest rental yields in Indonesia.
According to data from Bank Indonesia, commercial property prices in the island’s capital, Denpasar, grew by almost 10% year-on-year in 2024, with increases in the retail, apartment, hotel, and office sectors.
The increase in property demand in Bali is also in line with data from the Central Statistics Agency (BPS) related to the growth of the Gross Regional Domestic Product (GRDP) of Bali Province in the real estate business field in the third quarter of 2024 which also grew by 1.84% (yoy).
Bali’s Inclusion in Fodor’s “No List” for 2025: A Challenge
Despite Bali’s global appeal, the island faces a number of challenges that could tarnish its reputation. By the end of 2024, Fodor’s Travel, a prestigious international travel guide, included Bali in its “No List” for 2025, recommending tourists avoid visiting the island.
The reasons cited for this inclusion were the negative effects of overtourism, significant environmental concerns such as plastic waste, severe traffic congestion, and the strain placed on local infrastructure.
Overtourism, Environmental Issues, and Infrastructure Strain
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This international criticism marks a blow to Bali’s image as a premier tourist destination, prompting concerns about the management and sustainability of tourism on the island.
For many years, the focus has been on attracting as many tourists as possible, without sufficient consideration for the long-term impact on the environment and local culture.
Additionally, there is a notable imbalance in the development of tourist areas, with popular spots like Seminyak, Canggu, and Ubud experiencing overdevelopment, while other, less visited regions in North Bali maintain their cultural and natural authenticity but are hindered by accessibility issues.
Tourist Arrival Numbers: A Strong Recovery Post-Pandemic
In 2024, Bali saw 6.3 million foreign tourists, an increase of 19.5% compared to the previous year, and exceeding the number of visitors before the COVID-19 pandemic. Australian, Indian, Chinese, and UK nationals represented the largest groups of foreign visitors.
Looking ahead to 2025, Bali aims to attract 6.5 million foreign tourists, with the Indonesian Ministry of Tourism hopeful that the overall target for foreign tourist arrivals across the country will reach 16 million. The ministry is optimistic that this will generate a significant amount of foreign exchange earnings, expected to reach $22 billion in 2025.
Acting Deputy for Marketing at the Ministry of Tourism, Ni Made Ayu Marthini, said that the Ministry of Tourism is targeting foreign exchange earnings from the tourism sector of US$ 22 billion by 2025.
“The foreign exchange is targeted high this year. Why, because this is important for government revenue, for development in Indonesia. We are trying hard and are optimistic that by continuing to work together with stakeholders we can achieve it,” she said, as reported by Detiknews.
Bali, as one of the country’s top destinations, is projected to contribute almost half of the national target, with officials aiming to not just increase the quantity of tourists but to also attract higher-quality visitors who will stay longer and spend more.
Why Foreign Tourists Choose to Settle in Bali
Many foreign tourists have found Bali so appealing that they choose to settle there for extended periods. One of the key attractions is the relatively low cost of living compared to Western countries, with affordable housing, private villas, transportation, and food options.
Furthermore, Bali’s rich cultural traditions, including traditional ceremonies and Hindu festivals, coupled with the island’s renowned hospitality, make it a welcoming environment for long-term visitors. Its natural beauty, from beaches and forests to rice terraces and mountains, adds to its charm, offering plenty of opportunities for exploration and relaxation.
Growing Issues with Foreign Tourists’ Behaviour in Bali
However, the growing number of foreigners residing in Bali has not been without its problems. There have been several reports of tourists acting inappropriately, including disrespecting sacred sites, ignoring local customs, driving recklessly, engaging in criminal activities such as theft and prostitution, and working illegally without the necessary permits.
One notorious incident in May 2024 revealed a network of Russian and Ukrainian nationals running an illegal drug lab in a villa in Canggu, while in December 2024, Bali police uncovered an international prostitution ring led by Russian nationals.
Similarly, immigration authorities have been forced to deport hundreds of foreign nationals for working illegally, committing criminal offences, or violating cultural norms.
As of September 2024, Immigration at the Bali Regional Office of the Ministry of Law and Human Rights deported 378 foreign nationals.
This number increased compared to 2023 where there were 335 foreigners deported by the Immigration Office (Ngurah Rai, Denpasar Regional Office, Singaraja Regional Office and Denpasar Immigration Detention Center. In that period, Denpasar Immigration Detention Center became the immigration technical implementation unit that recorded the most deportations with 203 people.
Those deported were not only those proven to be working illegally in Bali, but also those who committed various violations. Since Bali reopened to foreign tourists without quarantine during the Covid-19 pandemic in March 2022, there have been various kinds of violations committed by tourists.
There are those who commit indecent acts in sacred places, do not respect local culture, are reckless when driving vehicles, rob mini markets, there are those who mistreat the families of local residents and of course work without a permit.
Transportation Disputes: Foreign Tourists in Local Driver Roles
Moreover, another issue has arisen concerning the transportation sector. Local drivers have expressed concerns over an increasing number of foreign nationals acting as drivers and tour guides for newly arriving tourists at Ngurah Rai International Airport, which has led to protests by local tourism drivers who argue that this practice undercuts their livelihoods.
The Plastic Waste Crisis: Bali’s Challenges
Alongside this economic growth, Bali continues to grapple with a severe waste management crisis. Plastic pollution, particularly along beaches such as Kedonganan in Jimbaran, has become a critical issue. Environmental organisations, such as Sungai Watch, have highlighted these concerns, further contributing to Bali’s negative image.
This waste crisis has played a role in the island’s inclusion on Fodor’s “No List” for 2025, as the chronic waste problem remains unresolved despite the island’s growing popularity. This environmental degradation threatens Bali’s long-term appeal as a sustainable tourism destination.
Bali’s ongoing waste management crisis and environmental degradation have significant consequences for its reputation as a world-class tourist destination.
As more visitors flock to the island, the strain on the local infrastructure and natural resources increases, leading to concerns about Bali’s sustainability in the long run. The plastic pollution and waste management issues have been cited as reasons for the island’s inclusion on Fodor’s “No List,” further tarnishing its image on the international stage.
The Future of Bali’s Tourism: Opportunities and Sustainable Solutions
Despite all of Bali’s challenges, there are still significant opportunities for Bali, especially with its ongoing appeal to tourists and investors. However, for the island to maintain its status as a world-class destination, there must be greater efforts to balance economic growth with environmental sustainability, respect for local culture, and the regulation of foreign activities. By addressing these challenges, Bali can ensure a sustainable future while continuing to attract tourists and investors from around the world.
Bali’s future hinges on finding a balance between development and sustainability. While the island’s economic growth, driven by tourism and investment, has brought about prosperity, it has also given rise to serious environmental and social challenges.
If Bali is to preserve its unique cultural heritage and natural beauty for future generations, concerted efforts from both the government and local stakeholders are needed to implement sustainable practices, regulate tourism, and protect the island’s resources. Only through these efforts can Bali maintain its allure as a top global destination while safeguarding its future.
Source: AlgoResearch, BPS, Immigration, Kompas, Antara, Detiknews.
