Hundreds of Bali Hotels and Villas Listed for Sale Amid Allegations of Foreign-Linked 'Shadow Economy'

On September 19, 2026, Azril Azhari, chairman of the Indonesian Tourism Scholars Association (ICPI), raised concerns about hundreds of hotels and villas currently listed for sale in Bali, suggesting they may be connected to a 'shadow economy' involving foreign nationals (WNA). A shadow economy refers to economic activity not fully captured within official records or tax systems.

According to Azril, this phenomenon is believed to have been occurring even before 2025, but has not received adequate attention from authorities—including, he said, the Tourism Minister himself.

One key contradiction he highlighted is the gap between Bali's crowded tourist areas—marked by traffic congestion and waste problems—and hotel bed occupancy rates (BOR), which remain around 70%, not reaching 80% despite the visible influx of visitors.

Based on his field research, Azril said foreign nationals appear to be involved in financing and managing not only villas but also homestays and resorts, often while businesses are administratively registered under local Indonesian names. Some operations reportedly bundle accommodation with transportation, meals, and currency exchange into all-in-one packages for tourists.

Azril warned that if such economic activity remains unrecorded and unsupervised, the government risks losing tax revenue. He urged authorities to conduct comprehensive data collection and oversight covering business ownership, funding sources, management structures, and tax compliance in Bali's accommodation sector.

He also flagged concerns that some foreigners may be running businesses while holding only tourist or visit visas, which do not permit business activity. 'Who is supervising this? This is the problem,' he said, describing the situation as a long-standing 'yellow light' warning sign that has gone unheeded.