Indonesia: Government plans to tighten licensing for unregistered hotels/villas in Bali & Jakarta
Indonesia’s Ministry of Tourism (MoT) has implemented new regulations to strengthen accommodation licence compliance following a government mapping exercise that revealed thousands of unlicensed properties were listed on travel distribution channels—so-called OTAs—in the tourist hubs of Bali, sparking safety, service quality, and fair competition concerns.
The policy sets a clear standard of business, supervision, and administrative sanctions under a country’s regime of licensing based on risk. It sets a requirement for accommodation business properties to obtain and maintain valid operating licenses, business classifications, by March 31, 2026.
The Indonesian Government's move was termed as a measure to reinstate order in the accommodation market rather than controlling the expansion of digital platforms by Widiyanti Putri Wardhana, Indonesia's Minister of Tourism.
"Licensing, in many ways, is not just an administrative but a core issue linking tourism safety, professionalism, and tax compliance, all contributing significantly to the development of sustainable tourism," she said at the ministry's year-end press conference in Jakarta.
“What we found was a huge gap between what we know about listings by OTA websites and their physical listings or numbers that are actually licensed. And that throws a series of risks into play, from incorrect data for governments, unfair competition, to possible guest safety.” Amnu Fuadiy, Assistant Deputy for Sustainable Tourism Business Management, Ministry of Tourism, explained.
According to the new regulation, accommodation providers will lose their listings if they do not secure licenses by the deadline set for March 2026. The ministry worked closely with regional administrations and major online platforms in facilitating the process, sending formal notices in December 2025 to companies regarding the required information they should provide to their merchant partners via the Online Single Submission Licensing System.
Alongside this, the government is launching additional initiatives designed to assist those affected by the requirements, particularly small and independent ones. Licensing education programs, data verification programs, and coaching clinics will assist companies in complying with the OSS requirements while choosing the right business classification.
The push is generally welcomed by industry players, who hasten to underline the need for consistent implementation on the ground. Fransiska Handoko, head of government and organisation relations at the Bali Hotels Association, underlined that effective field inspections will be key and stressed that continued socialisation is needed so that operators understand requirements.
I Gusti Ngurah Rai Suryawijaya, vice chairman of the Indonesian Hotels and Restaurants Association Bali chapter, said licensing enforcement should be accompanied by a review of foreign investment rules in the accommodation sector. “If the aim is to protect local enterprises, there needs to be clearer boundaries on which segments are open to foreign investors and which should remain focused on domestic operators,” he said.
Putu Gede Hendrawan, chairman of the Bali Villa Association, cited technical errors in the OSS system, where private houses and apartments are often listed as a villa even though they do not meet the criteria. “This has allowed many properties to operate as ‘villas’ without actually complying with the criteria,” he said.
The association prepares a proposal to include more detailed villa classifications in the OSS system, and Putu adds that clearer categories would help operators register correctly and make oversight more effective.
