Just returned home from 2 wonderful weeks in Bali ( my 7th trip ).
On all visits to Bali when I have checked in at hotels, they have always asked for my passport and have photocopied it. I have queried the reason for this on the first few visits and was advised that it is a requirement from the police and that one copy of passport is kept on hotel file for the police and another copy is for the hotel so they actually have 2 copies of passport on file.
When I have checked out of hotel at end of holiday, I have never thought to query 'what happens to the photocopies of my passport' nor have I ever asked for the photocopies to be returned to me. "I am sure I am not the only one who had never thought about it".
This is where the warning comes in.
On this trip, I was staying in a hotel in Kuta. A friend popped into the hotel while I was out and left some items in a bag at reception for me. When I collected the items from reception - The reception had pinned a note to the bad with my name and room number on it. THE PIECE OF PAPER THAT THE NOTE WAS WRITTEN ON WAS ACTUALLY IN FACT WRITTEN ON THE BACK OF A PERSONS PASSPORT . THE PERSONS PHOTO, FULL NAME AND HALF OF PASSPORT NUMBER WAS FULLY VISIBILE. It might not bother some people but unfortunately there are many dishonest people out there and for those who are dishonest and know what to do, I imagine that they could possibly use this information for identity theft or something of a similar nature.
I took the note and showed them at hotel reception and they said it was 'scrap paper'. THEY WERE USING PHOTOCOPIES OF PASSPORTS AS SCRAP PAPER. I tried to explain the seriousness of this to the hotel but they either did not understand or didn't care. When I checked out of hotel, I asked for my photocopies of passports back which they returned to me and I ripped them up in front of them and put them in the bin.
Perhaps, I might be a bit wrong about why hotels copy your passports and what they do with them but I am just sharing the information that I was given and what my experience was. Might be of a concern to a few people as it was to me.