It does not take much arithmetic to work out that the Balinese
tourism industry is paved in gold for so many, while the Balinese
and guests get cheated by what must be one of the world's
nastiest business communities. Hotels in Bali pay comparatively
small wage bills and other operational costs, yet so many
are selfish and too many are downright nasty.
Profit to the exclusion of everything is the name of the
day for perhaps most Bali hotel owners. Here are a list of
nasty practices commonly committed by Bali hotels;
1) Tax fraud: Many hotels run twin book systems (one honest
one for the management, one dishonest one for the tax man).
2) Service charge fraud: Service charges collected by hotels
are meant to be paid to the staff. Some don't pay them anything,
many pay them a little, some pay senior management and directors
on western level wages a share, some go further and pay salary
linked percentages to staff and management alike so that the
real staff get very little.
3) Lay offs: When tourist numbers drop, hotels send staff
home without pay. It does not take many guests to turn a profit
in Bali, but hotels treat their poorest workers who have no
redundancy / dole money / social security system to fall back
upon as dispensable.
These practices give the unethical even unlawful hotels an
unfair financial edge over their more honest and Bali friendly
competitors, as well as cheating their guests as they think
they are paying taxes for the country and service charges
for the hotel workers when they are not. But it does not stop
there. Many hotels are allowed to violate building codes through
corruption or bad local government management that are there
supposedly to protect the environment and Balinese culture.
Examples are the Grand Bali Beach (no hotel is meant to be
taller than a coconut palm tree but this one is), the Four
Seasons Sayan (built too close to the local temple) and Waka
Shorea (built on National Park land).
Then there is the question of what if any connection exists
between the owners of the hotel and members and friends of
the Suharto family. Under the Suharto regime thousands of
Balinese people were murdered and their land officially taken
from them using compulsory purchase orders which resulted
in below market prices being paid for the land acquired and
where most of that land benefited the Suharto family themselves.
Many of the hotels to this day are owned or part owned by
members of the Suharto family through Jakarta based management
companies. In addition to alleged corruption and worse against
their own people, the Suharto family is believed to have made
its vast wealth from the theft of millions of dollars of International
loans, etc. and from bribes paid by foreign companies for
being awarded contracts. For many foreign tourists the idea
of staying at a hotel which has lined and / or is continuing
to line the pockets of the Suharto family and their friends
is repugnant. A list of some or all of these hotels can be
found here: Questionable
Of course with so many years of corrupt government, most
large hotels in Bali and wealthy Indonesian based businessman
are likely to have had a very difficult time to be so successful
without resorting to corruption to get there, so how does
anyone avoid all that is bad in Bali regarding hotel ownership
and management? BLTF believes it is relatively easy to find
the good hotels in every way.
First, be cautious about hotel hype from the media. Travel
journalists are hardly likely to give fair reviews, so many
of them being sucked into the nepotistic, complimentary stay
and benefits routine, followers of other people's fashion
syndrome; which often originates from the hotels' own PR departments
Two, be wary of taking forum recommendations at face value.
Hotel owners and their pet travel agents often try to post
glowing reports using pseudonyms feigning regular tourists.
Also, if you see or get a report from someone of a forum or
blog site adulating a particular hotel, try to find out how
many times they have stayed there and what other hotels they
have actually stayed at (beware of the "I looked into
the ZZZ hotel but never stayed there" brigade). Staying
too often can well be a sign they are unadventurous and simply
go back to the same hotel each time as they feel safe there,
and recommend it as the best to others to sanctify their own
decision to return. By careful use of the forums great hotels
can be found though.
Three, contact the hotel asking them "What percentage
of the service charges you collect actually goes to the staff
who are on Indonesian level salaries, rather than the senior
management, and how is it divided up amongst the staff?".
The "correct" answer should be "We give every
cent of the service charges we collect to the staff, none
to senior management, and it is divided equally amongst them."
BLTF believes that hotels who treat their staff fairly are
also going to be the most ethical, pro-Balinese and truly
guest friendly hotels in Bali. As business people who are
good in one respect tend to be good in every respect.
Of course, while you are staying at the hotel, make sure
they did not lie to you about paying service charges to their
staff! If you want to be able to check accurately, you need
to have a calculator and a few minutes to spare! First you
will likely find some members of staff you become very friendly
towards; ask them how much service charge they make a month
on average from the hotel. Second, ask the average honest
occupancy rate for the hotel, work out how much on paper the
hotel would take each night if they were fully booked (for
example, if a hotel has 100 rooms at US$50 per night and 20
rooms at US$100 per night, the total potential revenue on
paper would be US$7000 per night - don't forget to factor
in any peak season supplements either), then work out what
the average occupancy revenue on paper would be (e.g. if the
average occupancy is 50%, the above example hotel would have
an average revenue on paper of US$3500 per night). Take 10%
of that, times it by 28 days (to get a monthly figure), divide
it by the number of staff at the hotel, and the amount you
calculated should be approximately the same as the staff told
you they get.
Of course many hotels get their bookings through agents who
do not include service in their rates (although many may well
lie that they do), but hotels also make much more in service
charges from food, drinks, etc., so the two should balance
out. In our above example, using worldwide staff to room ratio
averages for that price segment of hotel (100 rooms = 55 staff,
less if laundry is outsourced), the number of staff would
be around 66. So the hotel would collect around US$10,000
a month in service charges and each member of staff, from
the pretty receptionist to the unseen laundry worker to the
smiling gardner should each get around US$150 in service charges,
about 1.5 million Indonesian Rupiah. As the basic minimum
wage in Indonesia is 475,000 Rupiah a month (2005), you can
begin to understand how important the hotels' honesty is to
their staff. And you can be sure if the hotel are cheating
their staff, they are likely cheating or perhaps short-changing
their guests and suppliers and the island's culture and environment
If you find a hotel in Bali or Lombok who says they give
every penny of the service charge equally to the workers but
think they do not, let BLTF know, we will be happy to email
them and ask for clarification and help publish the details
of any that can be shown to be operating unethically or unlawfully.
Likewise if you know of a hotel which trades 100% ethically,
we would be delighted to add their details here;
Good (even excellent), honest, decent, ethical hotels
Sari Hotel Ubud
The staff actually have been given a share in this hotel,
which is owned by real Balinese people who work hard for their
hotel and island, and it shows. If you book into their hotel
using our sponsor site the price is the same and you contribute
to a fund for free rooms at Tegal Sari for Bali's bomb victims
and their families: Tegal
Blue Moon Villas
Sensational sea view mini resort with villa style rooms which
is 100% licensed plus very much Balinese, staff and guest
Agung Bali Nirwana
Some of the very few true beachfront villas in Bali with something
even rarer, a living coral reef offshore. True villa accommodation
(these villas have their own western kitchens) but also offering
beachfront restaurant and spa so guests can choose either
self-catering or resort style services as they please. Part
of the Indonesian Ministry of Fisheries "Biorock"
project to protect and improve Bali's coral reefs; therefore
excellent for divers and snorkellers alike. 100% licensed,
environmentally friendly, the staff get 100% of any service
charges paid (equally divided and nothing going to management),
they work with and fund the local village on temple, etc.
projects and their guest book (comments / reports made by
guests) leaves you in no doubt they are very guest friendly
too. If you book into their private villa resort using our
sponsor site the price is the same and you contribute to a
fund for free rooms at Agung Bali Nirwana for Bali's bomb
victims and their families: Agung
Bali Nirwana Reservations.
Wana Villas & Spa Resort
Built in the mountains overlooking a large lake (water reservoir)
with some spectacular views and architecture. This resort
give 100% of any service charges paid by guests to their staff.
A hidden inexpensive treasure in Penestanan, about 20 minutes
walk from Ubud Centre. Balinese owned and friendly / legal
in every way. No web site, ask David Bulluss (DavidB) or Mark
(Admin) on the travel forum itself about this place. Emails
the hotel at firstname.lastname@example.org.
Please, if you know any more hotels that should be listed
here (please check the criteria on our Featured
Bali Sites page), let BLTF know!
In addition to hotels, there are now a proliferation of "villas"
on Bali, often offering something a little more bespoke, but
sometimes a lot more risky! See our page: Bali