How to Start an Airbnb Investment Business in Bali as a Foreigner
The island of Gods remains one of the most travelled to destinations in South East Asia
Being one of TripAdvisor’s top 5 destinations in the world, holding the number one spot in 2021.
With recent Quarantine Free international travel to Bali, tourism from all over the world has been looking forward to visiting the island. Most investors in Bali use the Airbnb platform as a source of marketing for their homes. Vacation rentals prosper in Bali thanks to tourism
How is Bali’s short-term rental market?
Before COVID, the vacation rental market was flourishing more than ever. Over six million international tourists visited Bali in 2019 and the island still managed to attract one million tourists in 2020. Demand was at an all-time high and steadily grew with Canggu in the lead, and experts are confident that Bali will recover quickly and grow even bigger than before once international travel is completely restored. It’s also worth noting that unlike other touristic regions, Canggu was not severely affected by the pandemic thanks to digital nomads and long-term tenants staying in villas.
Average demand growth based on bookings made in 2017, 2018, and 2019
Source: AirDNA
Since Bali’s borders reopened, the number of international arrivals has increased by 13,62% in the first quarter of 2022. Combined with the government’s efforts in easing travel restrictions even further, this could be the beginning of the long-awaited return of Bali’s tourism.
Is it profitable to open an Airbnb in Bali?
Yes, always has been. Back in 2017, The Telegraph reported that the average yearly earnings of Airbnb listings in Bali was over $40.000, beating out major cities including Tokyo, Barcelona, and London by a landslide. There was a significant increase in monthly revenue from 2017 to 2019, particularly for villa rentals in Canggu where the average growth was around 20% per year. This combined with the increasing demand could potentially yield better outcomes considering that Bali is starting to welcome travellers again.
Average monthly revenue in 2019
Source: AirDNA
Villas are excellent for investment because the average forecasted ROI in Bali is between 8-12% depending on the location, with Seminyak villas offering the best return potential closely followed by Canggu.
How do you open a vacation rental as a foreigner?
Having the appropriate building permit (known as IMB or PBG) and business license are necessary to run a daily villa rental in Bali. Villas typically have a Rumah Tinggal (residential) permit, whereas a vacation rental requires a Pondok Wisata (homestay) permit. It’s important to note that Pondok Wisata can only be obtained by an Indonesian citizen and can only be applied on properties located within a touristic zone, thus you will need to acquire a property that already has a Pondok Wisata permit if you plan to rent out immediately. Should you wish to know more about how to obtain these licesnses BVR legal would be able to assist.
As for the business license, you can set up or acquire a foreign owned company (known as PT PMA) in the Hospitality Management Consulting classification. Having a company offers several advantages including the ability to acquire freehold properties in the company’s name. However, should you want a hassle free option, BVR holiday rentals manage a verity of villas, hotels and resorts all over Bali and would gladly assist in assisting you with your villa, Hotel or resort
