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OPERATORS REPORT

Q3 2023

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EXECUTIVE SUMMARY

Welcome to REID's Q3 Operators Report! The following is an overview of the properties analyzed by REID in Q3 of 2023. The last of our four-part report series, the data selected is geared towards rental operators. REID will introduce rental metrics such as average daily rate (ADR) and occupancy, as well tourism data such as arrivals by nationality. We’ve analyzed almost 55,000 rental properties in Bali, noting a strong Q3 performance with an ADR of $194 and an average occupancy rate of 65%. Read on to discover more about active supply, monthly revenue, and seasonality!

TOTAL RENTAL MARKET SUPPLY

  • The total number of rental properties in the market stayed above 50,000 for all of Q3. 
     

  • Total rental properties increased by just over 2% month over month, representing an additional 2,489 active rentals from July to September.
     

  • REID expects this trend to continue into Q4. 

RENTAL MARKET SUPPLY BY SIZE

  • One-bedroom rental properties dominated the market supply with over 50% market share.
     

  • Interestingly, there were more 6+ bedroom properties than 5-bedroom units available for rent. This, coupled with occupancy data we’ll review later on in this report, indicated an appetite for large rental properties. 

RENTAL SUPPLY
BY REGION

  • As REID expected, North Badung continued to dominate the share of the rental market at 37%, an increase since Q2 of 2%. 
     

  • Mengwi, an emerging region, only constituted 2% of the rental market at just over 1,000 listings. REID sees this as an opportunity for rental operators. 

RENTAL SUPPLY 
BY REGION & SIZE

  • In Q3, the most common rental property type was a 1-bedroom unit in North Badung at over 9,600 properties. 
     

  • Central Badung, a region that includes neighborhoods like Kuta and Seminyak, had over 4,500 rental properties in Q3 (the 3rd highest supply of any size in any region). However, occupancy was the lowest of any property size in Central Badung at 53%.

AVERAGE DAILY RATE

AVERAGE DAILY RATE
BY REGION

  • Average daily rate in Mengwi was the highest in any region at $290. It’s important to keep in mind rental properties in this region only make up 2% of the market, with 5+ bedroom listings driving the ADR up.
     

  • As expected, the ADR in North Badung sat at $212, in-line with the dominance of 1-bedroom properties in the region. 

AVERAGE DAILY RATE ​
BY REGION & SIZE

  • In Q3, the highest ADR for 1-bedroom rental properties was in South Badung, sitting at a market-high of $107. REID posits this is due to the growing demand in Bingin.
     

  • Tabanan and Mengwi experienced the highest ADR in Bali (at $1,837 and $1,347 for 6-bedroom units) - this is largely due to the small volume of rental listings available. 

ABOVE MARKET MEDIAN

BELOW MARKET MEDIAN

RENTAL OCCUPANCY

OCCUPANCY RATE 
BY REGION

  • Occupancy rates in Bali hovered between 55% and 70% for all regions in Q3.  

  • Average occupancy for the entire market was 64%, an increase of 4% from the first half of 2023.

  • The highest occupancy rates were seen in North Badung and Gianyar, which together make up 53% of the rental supply in the market. 

  • Central Badung, which had the second highest rental market share at 19%, saw an occupancy rate 2% below the market average. 

MARKET AVERAGE

OCCUPANCY RATE 
BY REGION & SIZE

  • Above market average rates are shown in dark blue, while below market average rates are shown in light blue. 
     

  • The best performing rental property type on the market was 5-bedroom units in Gianyar, at an occupancy rate of 78%. Notably, there were only 143 properties of this size available for rent, at an ADR of $468. 
     

  • The rental property type with the lowest occupancy rate (48%) was 1-bedroom units in Tabanan.

ABOVE MARKET MEDIAN

BELOW MARKET MEDIAN

RENTAL REVENUE

MONTHLY RENTAL REVENUE BY REGION

  • Rental revenue in Q3 totaled $403.4M, up 23% from Q2. REID attributes this to seasonality, and an increase of rental supply.
     

  • South Badung saw the highest revenue, despite only making up 15% of the market, its high ADR of $252 makes it the strongest monthly revenue region in Bali. 
     

  • Gianyar, saw the opposite; at 16% of the market supply, its low ADR of $128 makes it a low revenue generating region. 

MONTHLY RENTAL REVENUE BY SIZE

  • Two-bedroom units on average earned more than double in rental revenue than 1-bedroom properties.
     

  • As seen in REID’s Q3 Builders Report, 2-bedroom median listing price is only 42% higher than 1-bedroom median listing price. 

MONTHLY RENTAL REVENUE BY REGION & SIZE

  • South Badung, a region REID has identified as emerging, outperformed the market average in every property size. 
     

  • Mengwi consistently performed below the market average at almost every property size. 

ABOVE MARKET MEDIAN

BELOW MARKET MEDIAN

TOURIST ARRIVALS

FOREIGN ARRIVALS
BY NATIONALITY

  • As seen in the chart above, over 60% of arrivals into Bali in Q3 were from Indonesia. 
     

  • Oceania (which includes and is most impacted by tourism from Australia) along with Europe made up the largest share of foreign arrivals into Bali at 54% cumulatively. 
     

  • Tourist arrivals from Asia, excluding Southeast Asia, made up another 24% of the market. Pre-COVID, Asia made up 37% of tourist arrivals, which represents the biggest decrease of any demographic.

SEASONALITY

  • Presented here are the seasonal trends of tourist arrivals across Q1, Q2, and Q3. 
     

  • In Q3, there were 800,000 more domestic tourists than foreign. This positively impacts the stability of the rental market season to season. 
     

  • July, June, and May (in that order) experienced the highest level of tourism during the first 3 quarters of 2023. 

THANKS FOR READING!

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