1Q 2011

REAL ESTATE mARkET REpoRT

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Bali Hotel
toUrisM oVerView
In January 2011, the number of foreign visitors to Bali reached 209,093, an increase of 16.9% compared to the same period last year. From the statistics, the big five foreign visitors to Bali were from Australia (28.11%), China, Japan, Russia and South korea. The good news is that the competiveness rating for Indonesian tourism from 139 countries rose to number 74 from 81 previously, as announced during the Global Tourism Forum in Andorra city. The tsunami catastrophe that hit Japan in march 2011 has reduced the number of tourists from Japan by around 10%. However, we expect that will recover over the next six months.

others 45.21%

Australia 28.11%

korea 4.99%

Russia 5.50%

Japan 8.01%

China 8.18%

Department of Culture and Tourism, Bali Statistics

sUpply
During the 1Q2011 two 5-star hotels entered the hotel market in Bali: pullman Bali Legian Nirwana in February, operating 140 of a total of 353 rooms, and W Retreat & Spa in Seminyak, with a total of around 237 rooms, of which 79 are villas. W Retreat & Spa Bali is targeted at tourists from Europe, Asia (korea, Japan, China and Singapore) and Australia. With the influx of these two hotels, the total number of hotel rooms in Bali rose to 21,962, with the domination of 5-star hotels at 47%. As to hotel development, 3-star hotels represent 40% of the total supply.

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bali | 1Q 2011 | THE KNOWLEDGE | HOTEL SECTOR

hotel sUpply based on nUMber of rooMs based on nUMber of hotels

5 star 47%

3 star 24%

5 star 28%

3 star 40%

4 star 29%

4 star 32%

Colliers International Indonesia - Research

perforMance of 3-, 4- and 5-star

In general, the occupancy rate for star-rated hotels in Bali was down by 2 to 4% compared to the previous quarter, while the ARR figure represents a decline of between 1 and 2% q-o-q. This is usual for the first quarter of the year, since the peak season of Bali Hotel market occurs towards the year-end.
hotel perforMance in bali based on aVerage occUpancy rates
100% 80% 60% 40% 20% 0% 2007 2008 3 star 2009 4 star 2010 1Q 2011 5 star $200.00 $160.00 $120.00 $80.00 $40.00 $0.00 2007 3 star 2008 2009 4 star 2010 1Q 2011

based on aVerage rooM rates

5 star

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nUsa dUa

The 4-star hotel in this area maintain the same occupancy level as in 4Q2010, or around 74%, while the other star categories followed the early year trend, posing a downward trend from 79.7% to 76.5 % for 3-star hotels and from 75.1% to 73.6% in the 5-star category. of the 3-star operating hotels in Nusa Dua, occupancy rates ranges from 73% to 80%. Similarly, there was no hotel with superior performance in the 4-star category, with occupancy ranging from 72% to 78%. In the 5-star hotels, the top three performers were melia Bali Villas, The Laguna Resort & Spa and Nusa Dua Beach Hotel. Unlike the occupancy trend, the ARR trend displayed an increasing trend, particularly for 5-star hotels, where the increase was quite significant. Three- and four-star hotels on average only recorded small increments from US$69.02 to US$70.98 for 3-star hotels, while

hotel perforMance in nUsa dUa based on nUMber of rooMs based on aVerage occUpancy rates
100% 80% 60% 40% 20% 0% 2007 3 star 2008 2009 4 star 2010 5 star 1Q 2011 $150.00 $120.00 $90.00 $60.00 $30.00 $0.00 2007 3 star 2008 2009 4 star 2010 5 star 1Q 2011

based on aVerage rooM rates

Colliers International Indonesia - Research

4-star hotels registered an increase from US$122.88 to US$124.72. Five-star hotels increased quite significantly, from US$119.66 to US$140.97, primarily due to the substantial

increase in melia Bali Villa & Spa Resort. other hotels in this category were relatively stable in ARR performance.

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tanjUng benoa
The occupancy trend in Tanjung Benoa was typically similar to the trend of Bali hotels as a whole, all star-rated hotels reporting a declining trend compared to the peak season last year. The three-star hotel occupancy level was down to 74.3% this quarter, from 76.8% in the previous quarter. Likewise, the occupancy level for the 4-star category was lower this quarter (73.6%) than the figure in the previous quarter (77.3%). And in the 5-star category, occupancy rate in the quarter achieved 74.1%, down from 77.2% in the 4Q2010. In our record, the occupancy level amongst operating hotels was about the same, none in the quarter recording occupancy of above 80%. In line with the downward trend in the AoR, the ARR values also dropped in the first quarter of the year. Recorded at US$73.01 in 4Q2010
hotel perforMance in tanjUng benoa based on aVerage occUpancy rates
100% 80% 60% 40% 20% 0% 2007 3 star 2008 2009 4 star 2010 1Q 2011 $100.00 $80.00 $60.00 $40.00 $20.00 $0.00 2007 3 star 2008 4 star 2009 2010 5 star 1Q 2011

based on aVerage rooM rates

5 star

Colliers International Indonesia - Research

the ARR for 3-star hotels in Tanjung Benoa was down to US$70.38 in this quarter, similar to 4and 5-star hotels, which registered a drop from US$75.91 to US71.37 and US$94.67 to 90.81, respectively. Two 4-star hotels, Bali Tropic &

Spa and Novotel Benoa Bali, fetched the highest ARR in the 4-star category, while three 5-star hotels achieved ARR of above US$100: Conrad, The Bali khama and melia Benoa Bali.

sanUr
Four-star hotels in Sanur experienced a drop in occupancy of 4% this quarter, to 76.7%. meanwhile the 3-star hotel occupancy level was registered at 74.9%, a relatively stable figure compared to last year. A moderate drop in occupancy was also experienced by 5-star category hotels, with occupancy level at 70.17%, down by 2% on the previous quarter. In the 4-star category, quite a few hotels registered a high occupancy of between 75% and 80%. Following the early year trend, the ARR in Sanur was down as well, with the ARR for 5-star remaining stable. ARR for 3-star hotels was US$53.70 on average, down from US$56.96 in 4Q2010. Similarly, the ARR for 4-star hotels was corrected by US$4.00 q-o-q to US$71.65. The ARR for 5-star hotels was relatively flat (US$58.18) compared to the
hotel perforMance in sanUr based on aVerage occUpancy rates
100% 80% 60% 40% 20% 0% 2007 3 star 2008 2009 4 star 2010 1Q 2011 5 star $100.00 $80.00 $60.00 $40.00 $20.00 $0.00 2007 3 star 2008 4 star 2009 2010 5 star 1Q 2011

based on aVerage rooM rates

Colliers International Indonesia - Research

previous quarter. ARR for 5-star hotels was similar to those achieved by 3-star hotels, and as operating 5-star hotels are old, the ARR was

low, at US$58.18. Two hotels in the 4-star category reached ARR of above US$80: mercure Resort and pavilions.

kUta
In 1Q2011 the occupancy rate for 5-star hotels in kuta was somewhat steady q-o-q, hovering around 70.7%. meanwhile the occupancy for 3and 4-star hotels showed a declining trend, with 3-star AoR registered at 75.0% from last quarters 78.1%. In the 4-star category, occupancy rate was registered at 73.1%, reflecting a decline on the previous quarters 75.4%. only 5-star hotels enjoyed stable occupancy, of 70.7%. Two 3-star hotels enjoyed high occupancy of more than 80%: Harris kuta and Bounty Hotel, while in the 4-star category.

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bali | 1Q 2011 | THE KNOWLEDGE | HOTEL SECTOR

ARR figures for 3- and 4-star hotels edged down this quarter, while 5-star hotels climbed moderately from US$92.45 in the previous quarter to US$93.02 this quarter. The ARR for the 3-star category dropped to US$63.39 from US$68.10 previously, while ARR for 4-star was recorded at US$70.08 from US$71.96 previously. In the 3-star category, the ARR ranged from US$33 to US$75. Four-star ARR ranged from US$52 to US$107, while in the 5-star category, it was recorded at between US$74 and US$101.

hotel perforMance in kUta based on aVerage occUpancy rates

100% 80% 60% 40% 20% 0% 2007 3 star 2008 2009 4 star 2010 1Q 2011 5 star $100.00 $80.00 $60.00 $40.00 $20.00 $0.00 2007 3 star 2008 4 star 2009 2010 5 star 1Q 2011

based on aVerage rooM rates

Colliers International Indonesia - Research

jiMbaran & pecatU

All 3-, 4- and 5-star hotels in this area reported a downturn trend in the AoR during the 1Q2011 but still maintain a healthy performance. occupancy level for 3-star hotels was 77.9%, down from 82.1 in the last quarter. A moderate drop was also experienced by 4-star hotels, which recorded occupancy levels of 77.1%. The 5-star hotels saw a minor drop from 76.5% to 73.2%. In our record, the occupancy level of all star-rated hotels in Jimbaran and pecatu areas are about equal. Unlike the AoR trend, the ARR trend for 3- and 4-star hotels instead showed a different pattern. ARR for 3-star hotels moved upward to US$54.75 from US$48.73 previously, with Sari Segara Resort recording a significant increase. Similarly, the 4-star hotel category witnessed an increase from US$93.53 to US$97.94. During the reviewed quarter there
hotel perforMance in jiMbaran and pecatU based on aVerage occUpancy rates
100% 80% 60% 40% 20% 0% 2007 3 star 2008 2009 4 star 2010 5 star 1Q 2011 $250.00 $200.00 $150.00 $100.00 $50.00 $0.00 2007 3 star 2008 2009 4 star 2010 5 star 1Q 2011

based on aVerage rooM rates

Colliers International Indonesia - Research

were more FIT (Free Independent Travellers) than guests coming as a group, which encouraged hoteliers to introduce higher rates. ARR for 5-star hotels on the contrary, edged

down modestly to US$221.69 from US$229.66 previously. Three 5-star hotels continue to maintain high rates: Bvlgari Hotel, Four Seasons Resort and Ritz Carlton.

seMinyak and canggU

In general, the occupancy rates for all starrated hotels in Seminyak and Canggu were in line with the market trend. occupancy rate for 3-star hotels was to slow from 75.1% to 73.8%, while moderate change in occupancy was experienced by 4-star hotels, from 80.5% to 79.2%. The 5-star hotels recorded an almost 4% difference from the previous quarter, standing at 65.1%. February was the best month for several 3-star hotels in this area, with occupancy reaching as high as 90%. ARR for 3-star hotels achieved a positive trend, from US$67.52 to US$68.43 in this quarter. A similar trend occurred in 4-star hotels, where ARR moved upward from US$121.78 to US$126.55 in the first quarter. In contrast, ARR for 5-star hotels softened moderately from
hotel perforMance in seMinyak and canggU based on aVerage occUpancy rates
100% 80% 60% 40% 20% 0% 2007 2008 3 star 2009 4 star 2010 1Q 2011 5 star $50.00 $0.00 2007 3 star 2008 2009 4 star 2010 1Q 2011

based on aVerage rooM rates

$200.00 $150.00 $100.00

5 star

Colliers International Indonesia - Research

US$171.07 to US$168.20. Two hotels in Seminyak-Canggu area reached ARR of above US$100: Alu and The oberoi. The other two

hotels even captured ARR of above US$250: The Legian and Tugu Hotel.

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UbUd
All hotel categories experienced a drop in occupancy. Significant change was seen in the 4-star category, where occupancy rate was registered at 70.9% from 75.8% previously. meanwhile, the occupancy for 3-star hotels also fell to 77.5% compared to 81.1% in the last quarter. Likewise, in the 5-star category, occupancy level weakened at 75.4% from 78.8% previously. Nothing is extraordinary in the AoR performance: all hotels had relatively stable performance. As one of the most expensive areas in Bali, the ARR in Ubud could reach higher rates than the overall Bali market. Three-star hotels could reach ARR of US$148.82 in this quarter despite a decline compared to last quarters US$149.49. In the 4-star category, ARR edged down to
hotel perforMance in UbUd based on aVerage occUpancy rates
100% 80% 60% 40% 20% 0% 2007 2008 2009 4 star 2010 1Q 2011 5 star $300.00 $240.00 $180.00 $120.00 $60.00 $0.00 2007 3 star 2008 2009 4 star 2010 5 star 1Q 2011

based on aVerage rooM rates

3 star

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US$142.92 from US$147.18 previously. After recording ARR of US$256.63 in last quarter,

5-star hotels performance during the reviewed quarter weakened to US$247.82.

other areas
other areas in Bali refer to areas outside of southern Bali. These areas are not as popular as the southern part but they offer different tourism attraction. These areas include Candi Dasa, Lovina, pemuteran, Denpasar, karang Asem, etc. The overall occupancy level for 3-star hotel was recorded at 71.8%, lower than last quarter of 74.7%. The 4-star hotel occupancy was down from 74.8% to 72.1% this quarter while the performance of 5-star rose from 78.0% to 79.4% this quarter. The 5-star hotel performance is relatively high particularly due to limited stock of 5-star hotels in these areas. ARR trend for these areas is similar to the AoR trend. The 3-star and 4-star hotels ARR were in the same trend as the AoR trend. In the 3-star category, ARR dropped to US$47.45 from US$50.03 previously, similar to the trend
hotel perforMance in other areas based on aVerage occUpancy rates
100% 80% 60% 40% 20% 0% 2007 2008 3 star 2009 4 star 2010 1Q 2011 5 star $300.00 $240.00 $180.00 $120.00 $60.00 $0.00 2007 3 star 2008 2009 2010 5 star 1Q 2011

based on aVerage rooM rates

4 star

Colliers International Indonesia - Research

for 4-star hotels, where ARR plummeted to US$65.43 from US$74.41 in 4Q2010. Again, the upward trend in AoR for 5-star hotels was in line with the trend of ARR this quarter,

achieving US$245.74 previously.

from

US$235.66

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1Q 2011 | THE KNOWLEDGE

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colliers international indonesia: World Trade Centre 10th floor Jalan Jenderal Sudirman kav. 29 - 31 Jakarta 12920 Indonesia tel 62 21 521 1400 faX 62 21 521 1411 michael Broomell managing Director World Trade Centre 10th floor Jalan Jenderal Sudirman kav. 29 - 31 Jakarta 12920 Indonesia tel 62 21 521 1400 ext 131 faX 62 21 521 1411 Ferry Salanto Division manager, Research World Trade Centre 10th floor Jalan Jenderal Sudirman kav. 29 - 31 Jakarta 12920 Indonesia tel 62 21 521 1400 ext 134 faX 62 21 521 1411
Copyright 2011 Colliers International The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has bee made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.

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