The Role of the U.S. Dollar
Due to specific peculiarities of the Indonesian banking system almost all hotels in Indonesia price and contract their rooms in U.S. dollars. As a result, the ability of tourists from key source markets to afford a Bali holiday is directly linked to both the price of accommodation but also the value of that tourist's home currency against the U.S. dollar.
To illustrate this point, balidiscovery.com presents a table showing the "actual" cost increase in a US$100 hotel room in Bali from October 2007 to October 2008, factoring in both an assumed 25% increase in room tariff and shifts in home currency exchange rates against the U.S. dollar.
Here's what we discovered:
● Australia - The Australian dollar has devalued 28.73% over the past year from October 2007 to October 2008. In fact, if measured against July 15th when the value of the Australian dollar peaked (0.98 AUS$ to US$1.00) the devaluation equals 41.17%.
In practical terms, this means that an Australian who paid AU$111.89 for a US$100 room in October 2007 is now paying 60.91% more or AU$180.05 for that same room. If compared to July 2008 to October 2008 - a span of only 3 months, that Australian traveler will have experienced a 76.46% increase in accommodation costs.