Indonesia strengthens licensing requirements for unlicensed hotels & villas in Bali & Jakarta
The Indonesian Ministry of Tourism (MoT) has imposed some regulations in the Indonesian hospitality industry. This is due to a survey by the Indonesian Government, which concluded that most of the hotels listed in the Online Travel Agencies (OTAs), especially in Bali, did not have valid business licenses.
The policy provides more business standards, management control, and administrative penalties within the risk-based licensing framework for the country. Every accommodation facility must have an operative business license and corresponding classification by March 31, 2026.
"The move is not about stifling the development of online agencies but about restoring some order in the hotel sector," said Widiyanti Putri Wardhana, tourism minister of Indonesia.
“License issuance isn’t just a procedural issue. It has a direct association with safety, professionalism, and tax payments, which are all important in ensuring healthy tourism development,” she said at an end-of-year press conference of her ministry in Jakarta.
Date-of-record data from the ministry as of October 2025 indicated that more than 29,000 non-hotel accommodation units were listed on OTA portals in Bali, while around 14,500 were registered as businesses nationwide. In the case of Jakarta, there were about 5,000 non-hotel units advertised on the internet; however, just 1,500, or 28 percent, were properly licensed.
Amnu Fuadiy, the assistant deputy of Sustainable Tourism Business Management in the Ministry of Tourism, reported that the exercise showed a significant disparity in the number of listed hotels in OTAs versus the number of licensed hotels. This, according to Fuadiy, poses a number of risks, including incongruent data, competitive disadvantages, as well as safety risks.
From now on, if accommodation businesses do not apply for licenses by the deadline of March 2026, they will be delisted from OTA platforms. The ministry has collaborated very closely with local administrations and OTAs to facilitate a transition, sending official notices to companies in December 2025, asking for guidance from their merchant partners through the Online Single Submission (OSS) system.
In addition to enforcement, support or facilitating measures have been implemented by the government to make compliance easier, especially for smaller operators.
Hotels have received the initiative with open arms, although the need for implementation on the ground has been reiterated. According to Fransiska Handoko, the head of government and organisation relations for the Bali Hotels Association, successful implementation on the ground would be crucial, with continued socialization being imperative in ensuring that the requirements have been well disseminated.
"If the objective is to protect local businesses, there should be a clear demarcation of which sectors are open to foreign investments and which should continue to cater to local players," suggested I Gusti Ngurah Rai Suryawijaya, the vice-chairman of the Indonesian Hotels and Restaurants Association in Bali, regarding the need to ensure the enforcement of licenses is also followed by a relook at the foreign investments policy in the hotel sector.
Putu Gede Hendrawan, chairman of the Bali Villa Association, identified some technical issues in the OSS, “Many residential properties and apartments are identified in the OSS under the category of villas, irrespective of whether they conform to set standards or not.” “This has led many establishments to be identified or operate under the name of villas without actually fulfilling those standards.”
