Can Bali’s tourism industry recover? And do they want to?

Every year, about 6 million tourists flock to Bali. And why wouldn’t they? This province of Indonesia has been rated one of the best travel destinations in the world for their high-end resorts, endless summer weather, beaches, waterfalls, culture, food, and more.

And the country banks on it. About 60% of Bali’s GDP is attributed to tourism.

But due to COVID, the nation is struggling. In 2020, only 1 million people came to visit. And in 2021, there were just 45 tourists — a 99.99% decrease. This precipitous drop can be attributed to the island’s stringent COVID restrictions, including:

No tourist visas.

To visit the island, you have to qualify for and purchase a business visa for $300.

Health protocol hurdles.

All visitors must take multiple COVID tests, get special health insurance, and quarantine for 10 days — even if fully vaccinated. CNN reported on a couple who had to fly into Jakarta, quarantine for 10 days, all the while hoping new regulations aren’t imposed, and then board a domestic flight to Bali.

Flight challenges.

Due to the pandemic, there are far fewer flights to Bali, and the seats that are available are more expensive than before. Plus the island’s international airport was closed to flights for almost all of 2021.

To help offset the losses, the industry has been catering to domestic tourists with reduced hotel prices for Indonesians who want to work beachside. This resulted in a 35% increase in local tourism. However, hotel occupancy is still down and the Bali economy fell 9.3% in 2020.

So the government has been working to boost other parts of their economy — such as agriculture, fishing, and others — to not rely so heavily on tourism in the future. This shift in policy will have ripple effects for Bali once the pandemic is over.

All of this on an island that was so popular a few years ago that it suffered from “overtourism.” So will the decrease in tourism and shift toward a more diversified economy be a blessing or a curse in the long run? And what do these trends mean for other similar and once-popular destinations?

Only time will tell. However, I am betting that the lure of beautiful beaches and luxury resorts will be too much for tourists to resist.

Danilo Diazgranados is an independent investor in the global food and wine, financial services, real estate, and the hospitality sectors.