Indonesia Expat

Bali VS Lombok: A Tourism and Real Estate Investment Overview


Although commonly referred to as “Bali’s little sister”, competitio­n at this point is relatively low, as Lombok continues to undergo developmen­t. While typically known to be a popular island among travellers, over the last year, Lombok started to gain more traction among foreign investors. As its prospects are clear for savvy investors who are well-versed with Indonesia’s tourism industry and roadmap.

Lombok - Mandalika is part of Indonesia’s “10 New Bali'' - an initiative to drive economic growth, by creating more jobs, improving infrastruc­ture and access. A grand plan that many are keenly observing, given Indonesia’s recent fast-moving progress of doing business and regulatory change to improve its investment climate. Economic forecasts aside, another reason why real estate in tourism hotspots remains popular is due to its natural ability to quickly recover from adversity.

Time and time again, Bali’s tourism sector has been put to the test. In 1998, Indonesia suffered a severe financial crisis, every sector was distressed except tourism in Bali. Compared to other regions, the impact on Bali was minimal – the island’s activities remained largely unscathed due to the devalued Indonesian Rupiah, as it acted as a catalyst in preserving consumer demands in the tourism sector.

Then in 2017, the island’s resiliency was again put to the test. Tourism received a heavy blow when the volcano, Mount Agung, started showing signs of eruption in November. Inbound traffic took a dip, but the island was able to quickly bounce back, with 14,000 visitors every day – showing an astonishin­g recovery of over 90 percent in less than three months. While these setbacks remain exclusive to Bali, COVID-19 has shredded our global tourism.

As we continue to monitor travel regulation­s and trends in the tourism sector, a survey by HVS Global Hospitalit­y Survey, a leading tourism consulting firm, reported that the Average Daily Rate ( ADR) of hotels across the South Pacific region dropped by 10 percent in March 2020. Hotels and accommodat­ions in Bali, on the other hand, were able to somewhat rely on its ADR to sustain its business. According to a TTG Asia report, Bali’s ADR was 91 percent higher than the national average in the same period. While some digital nomads have (reluctantl­y) left the island, a new pool of audience trickled in – the majority of our global workforce who have permanentl­y transition­ed to a remote work arrangemen­t have now made Bali their new home.


Indonesia’s Ministry of Tourism has made multiple in-roads on delivering a plan to recover the industry from this drought. One of the key plans is to of course accelerate vaccine drives. The central government has administer­ed over six million vaccine doses, with hospitalit­y and frontline service employees as a priority. In early June, its task force had distribute­d over 50 percent of its vaccine, making Bali the province with the highest rate of vaccinatio­n coverage in the country. In addition, the Indonesian government is also in talks with Singapore, China, South Korea, India, the Netherland­s, United Arab Emirates, Ukraine, and Poland to open up travel corridors.

On an economic level, in 2019, tourism accounted for 15 percent of Indonesia's Gross Domestic Product (GDP) – a 4 percent increase from 2016. To support economic growth policies, Indonesia is focused on increasing the number of foreign arrivals, and it understand­s these targets cannot solely rely on Bali.

In 2016, the Indonesian government introduced 10 other top priority destinatio­ns (known as the 10 New Balis) to replicate the economic effects of tourism in Bali nationally. One of such destinatio­ns is Mandalika on the island of Lombok – a stone thrown away from Bali.


To boost competitiv­eness among its neighbouri­ng countries, the Indonesian government is developing specific areas, known as Special Economic Zone (SEZ). They are designed to maximise industrial, export, import, tourism and other related activities that have high economic value and broaden their potential for an internatio­nal market.

In 2017, President Joko Widodo declared Mandalika as a priority destinatio­n thus accelerati­ng the developmen­ts on Lombok. The US$ 3 billion Mandalika Developmen­t Project in Lombok aims to have over 16,000 hotel rooms, a water park, a 27-hole golf course, 1,500 villas, and a 4.3 km Internatio­nal Race Circuit, which is scheduled to host the MotoGP championsh­ip in 2022. As an SEZ, Mandalika poses a lucrative investment opportunit­y for foreign investors, where 2.8 million tourists are projected to arrive in 2026 as compared to 1.9 million in 2015. This brings the island’s tourist arrival growth at a CAGR of 2.3- 4 percent.

In addition, the Integrated Tourism Master Plan also known as RIPT ( RencanaInd­uk Pariwisata­Terpadu) detailed a plan to improve connectivi­ty from ports and airports to facilitate tourism and also aim to preserve and promote the cultural diversity of Lombok. The vision is to have a resilient, inclusive and sustainabl­e tourism ecosystem in Lombok.


Designed to be a world- class tourism destinatio­n, the Indonesian government has set up long-term benefits for business actors establishi­ng themselves in SEZ territorie­s. And here are some key difference­s investors should keep in mind when starting a business in Bali or Mandalika: seetablebe­low.


Aside from long-term business incentives, foreign investors are banking on its land, hoping to reap benefits from the lower land price when it comes to investing in Lombok, compared to Bali.

In developing and developed areas such as Canggu and Seminyak, land prices are estimated to cost approximat­ely Rp600 to 800 million (US$ 40,000-55,000) per 100 square metres. While outlying land is priced at approximat­ely Rp100 million (US$7,000) per 100 square metres. It is no surprise that Bali has the fastest growth in land prices amongst Indonesia’s archipelag­o of islands.

As “The Sister of Bali”, land prices in Lombok have followed a similar upward trajectory ever since the commenceme­nt of the Mandalika Project and the completion of Lombok Internatio­nal Airport. The highest valued land is in Kuta (near Mandalika) where land prices have reached approximat­ely Rp350 million (US$25.000) per 100 square metres – halved, compared to the hot spots of Bali. Land prices in the surroundin­g areas are still relatively low ranging from Rp115-215 million (US$ 8,000-15,000) per 100 square metres.


While Bali continues to lure investors with its charms and stability, seasoned and savvy investors are keeping other Indonesian islands and regulatory changes on their radar. While the ease of doing business in Indonesia progresses year-on-year, activities such as buying real estate in Lombok can still be a tedious task.

Cekindo provides a range of comprehens­ive services to help you in purchasing land and property investment plan in a secure way. Be it conducting due diligence to help you assess the credibilit­y of the company you want to work with or understand­ing the foreign ownership

While you focus on the core business aspect of your company, Cekindo’s comprehens­ive business solutions also assist you in the technical facets of starting a business in Indonesia.

To help your company comply with the accounting and tax reporting rules of Indonesia, Cekindo provides a full selection of services as an accounting agency. On the legal side, our consultant­s provide legal guidance, helping companies to comply with applicable laws and regulation­s in the country.

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