Bali’s accommodation landscape is entering a major transition. Governor I Wayan Koster has reiterated his intention to restrict platforms like Airbnb, arguing that unlicensed private rentals are not contributing adequately to Bali’s economy.

Over the last decade, guest demand has shifted from hotels to private villas, triggering a rapid boom in villa construction — often without proper zoning, permits, or tax compliance. Local authorities now estimate over 2,000 villas and hotels are operating without valid licences, a level they consider no longer sustainable.

As a result, the government is preparing to enforce a stricter framework:operators must comply with hotel-class regulations or cease operations entirely.

What This Means for Villa Owners


Under the new direction, private owners who rent their homes or villas on platforms like Airbnb without proper licensing will no longer be allowed to operate as before.

Going forward, renting to tourists in Bali will only be legally feasible through one of two pathways:

1. Upgrade Your Property to a Fully Licensed Hospitality Operation

Owners can apply for full hotel or guesthouse licensing, ensuring their property meets zoning, safety, tax, and accommodation standards outlined by the government.

2. Operate Under an Existing Licensed Hotel or Hospitality Group

Owners may “sub-license” or hand over management to a licensed operator. This allows villas to continue doing short-term rentals legally by operating under the umbrella of a compliant hospitality company.

The End of Unregulated Rentals


Any villa owner, property manager, or agency continuing short-term rentals without a licence will face the risk of fines, closure, or regulatory action.This represents a significant shift away from Bali’s previously loose, “wild-west” rental environment toward a more formalized hospitality system.

Why This Matters for Investors

The policy aims to:

  • Bring all villa rentals into the taxable, regulated tourism economy

  • Standardize operational quality and compliance

  • Protect Bali’s long-term tourism ecosystem

For investors, this marks a key transition moment — one that rewards professionally managed, properly licensed properties and reshapes Bali’s future accommodation market structure.