In Reply to: Prices posted by shogun on Sunday, 26. October 2008 at 15:40 Bali Time:
This article was posted on bali update and balidiscovery.com a while ago and the Aussie dollar has dropped more since then.
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.
That was then now most Australians who book are having to rethink their Bali holiday as its fast becoming out of reach for the average family .
The slow down in Aussie travellers will happen and other countries will follow as the world economy is suffering not just Australia.
Bali was riding the crest of the wave and it finally was able to recoup the well deserved rewards after years of holding back price increases to try to get the numbers back.
Unfortunately the price increases have come at the worst time as now the travellers have to be conservative with their finances.
Lets hope that things can reach a balance soon.
I know that I will be reassessing the family holiday we were planning for next year to Bali
Peter
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