Is More Expats Living in Bali Good or Bad?
In recent months, there has been a lot of discussion in the press about foreigners and their behavior, including a lack of respect for Balinese culture, and the establishment of illegal businesses, among other issues.
Most reactions to this issue are taking various forms from the government to enforce compliance, and that is a positive step.
One aspect of this situation that struck me a little differently was a statement that there were too many foreigners living in Bali and the potential impact of this.
The main argument was that foreigners are driving up property prices, which in turn causes some local residents to move out or renders it unaffordable for them to stay. However, this explanation might be a bit too simplistic, as we all know that the primary factor driving up prices in Bali is the demand from tourism. Prior to the COVID-19 pandemic, there were 6 million tourists and 9.2 million domestic visitors. We’ll set this part of the discussion aside and delve into a more intriguing topic: residential tourism versus “normal” tourism.
In terms of spending and comparisons, let’s focus on a straightforward breakdown of expat tourism. Although the comparisons and impacts between these two types of tourism and their revenue for the province could be combined, it’s worth noting that there are just as many non-Balinese Indonesians living or wanting to live in Bali.
Looking at expat tourism, before the COVID-19 pandemic, there were about 6 million arrivals. The average overall spending per tourist ranged between $1,000 to $1,500 USD per person, encompassing expenses such as accommodations, food, entertainment, and more.
When we add this up, with 6 million arrivals, it generates a total revenue of $7.5 billion USD.
Now, what if someone lives in Bali for more or less than a year?
To keep it simple, let’s estimate spending based on two main sources. One is the cost of renting a place to stay. While some rental prices are astronomical, let’s assume an average rental price of around $20,000 USD. Although some people might be sharing accommodations, there are additional expenses that contribute to their total spending. Let’s estimate that they spend $2,000 USD per month, totaling $24,000 USD per year. Adding some other expenses, let’s say $6,000 USD, brings the total to $50,000 USD per year.
When we compare this to tourists, it quickly becomes evident that we would need 150,000 residents in Bali to generate as much income as 6 million tourists.
Consider if this is a small family sending their children to school. Additionally, many expats establish businesses or invest in local enterprises. The math demonstrates that these contributions add up significantly.
Imagine the impact this would have on the issues we observe with traffic congestion, unregulated construction, and the overall carrying capacity of Bali.
The concerns related to disrespectful tourists and disregard for the local culture would likely decrease.
There would be better control over construction and the misuse of green belts and agricultural land.
Overall, I believe the Indonesian government sees this situation clearly, which is why they recently introduced a second home visa and are soon to launch a golden visa and more in the future.
For Bali, finding a middle ground would likely be beneficial. The current focus appears to be on promoting quality tourism, and with a strong emphasis on residential tourism, the tourism industry and Bali as a whole could easily adapt to this change.
In conclusion, residential tourism brings more benefits than drawbacks.
By Terje H. Nilsen, Co-Founder, Seven Stones Indonesia. Photo by Spenser Sembrat on Unsplash
