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Bali Hotels - Balinese Inhospitality?





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 Bali Hotels.

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 anyway.

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 too.

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 in Bali

Tegal 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 Sari Reservations.

Blue Moon Villas Hotel Amed
Sensational sea view mini resort with villa style rooms which is 100% licensed plus very much Balinese, staff and guest friendly.

Villas 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.

Taman 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.

Gerebig Bungalows
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 gerebig@yahoo.com.

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 Villas.