Lombok: tourism needs lots of development to become the “new Bali”

The Perth-to-Lombok flight introduced in June last year has contributed to a 40 per cent jump in hotel occupancy rates in the burgeoning south of the island.

But the new push to make Lombok a tourism destination has not dented Australia’s love affair with its next-door neighbour, Bali.

Air Asia began the direct flights in June last year as part of an Indonesian government push to create “10 new Balis” and improve tourism on Lombok, which had suffered since the 2018 earthquake.

According to figures for six operating hotels in the island’s south, occupancy jumped 18 per cent to 70 per cent in July. It reached 92.7 per cent in July and August before dropping back to the low 80s in October.

While no foreign visitor figures are publicly available for the second half of 2019, yearly tourism figures for the island hover just above 1 million per year; 5.5 million fewer than Bali.

It’s unclear yet how the coronavirus outbreak will impact Indonesian tourism, which is heavily reliant on Chinese visitors.

Indonesia Institute president Ross Taylor said the 10 new Bali campaign was not having any marked impact on the number of tourists visiting Bali from Australia.

“Last year despite a year of just the most horrendous things going on with Bali, what with drunken Aussies and earthquakes and volcanos going off, just a whole bunch of problems, 1.23 million Australians went to Bali last year and officially it’s a record,” he said.

Mr Taylor expected tourism numbers in Lombok to grow, but it didn’t have the critical mass of tourism infrastructure that Bali had to capture much of the Australian cohort looking to Indonesia for holidays.

“It doesn’t yet have the attractions they can offer to foodies and the millennials going up now, who go to Bali for yoga retreats, it is really big business there now,” he said.

But there are plenty of investors turning their attention to Lombok to change that.

Chris Berney works at NTB Capital, which has been involved in property investment in Lombok for seven years.

Mr Berney said Lombok was on the cusp of a tourism boom thanks to the new Moto GP circuit set for completion in 2021; a push for new direct flights from Melbourne and Hong Kong; and several new hotels in development.

“I do believe there will be a lot of extra supply coming on board which will then facilitate international flights, a lot of it is chicken or eggs with the flights, do the flights come first or the hotel rooms,” he said.

“In Lombok you had very strong speculative interest in 2013-14 and a bit of a lull in 2016-17 and with the earthquakes in 2018,” he said.

“Now with the Mandalika [resort] project really starting to hit its straps, with the Moto GP circuit you’re really starting to see a strong uptick in commercial interest as well as retail interests.

“Land prices in Lombok are one fifth to one 20th of what you have in Bali, from an investment point of view Lombok is a lot more attractive.”

Mr Berney said the tourism potential from the Asian market was incredible with a huge middle class emerging from the continent who would all be looking to spend money on holidays.

“With Lombok next to Bali, with the international airport and with the middle class growing exponentially, they need more holiday destinations of scale,” he said.

“It’s effectively a multi-generational demand shift in terms of why I’ve chosen to be here.”

AirAsia Indonesia chief executive Veranita Yosephine Sinaga said the Perth to Lombok route was now one of the airline’s top performing routes with an average load factor consistently above 80 per cent.

“We witnessed very strong demand on the route in peak travel months such as the school holiday periods in July, October and the end of year holiday season in December with loads reaching 100 per cent on some days,” she said.