With the journey to Bali taking just as long as the drive to Margaret River, the state’s closest Asia-Pacific neighbour has long been a draw card for Western Australian holiday makers and, as it turns out, business investment.
With the journey to Bali taking just as long as the drive to Margaret River, the state’s closest Asia-Pacific neighbour has long been a draw card for Western Australian holiday makers and, as it turns out, business investment.
Bali attracted more than one million foreign tourists during the first five months of this year and just shy of a million Australian visitors last year – attractive tourism numbers for those interested in taking a piece of the Balinese resort industry pie.
The growth of Bali’s resort industry has attracted architects, builders, property developers and associated industries.
Prominent WA resort developer John Spence developed his first resort, Karma Jimbaran, in 2005 in which Perth restaurateur Warren Mead got involved in 2009, establishing Mead’s at Jimbaran. Since then Mr Spence has established two more luxury boutique resorts, at Agung and Kandara.
Fremantle-based Grounds Kent Architects has long been involved in Bali and established its niche in resort design with the Four Seasons Resort Bali in 1993, which launched its expertise in resort design across the world thanks to numerous awards.
Originally from Perth, architect John Lincoln was involved in that project and now resides in Bali, having established his business, John Lincoln Architects, in 1999 after working on the Four Seasons project.
Even before Bali developed as a lap of luxury, the island has attracted entrepreneurs.
One of the largest marine tourism businesses in Bali, Bali Hai Cruises, was established in 1990 by Richard Chandler and his business partners.
Mr Chandler had visited Bali as Qantas state manager in WA and recognised the opportunities in an under-developed Balinese tourism industry.
“There were no marine tourism activities at all and, having been with Qantas for 20 odd years, you look around the world and Fiji has got it, Hawaii has got it, Papeete has got it,” Mr Chandler says.
Alongside three business partners, Mr Chandler ordered a 36-metre catamaran from Henderson-based shipbuilder Austal and set up Bali Hai Cruises.
From there, the business developed and introduced a second catamaran (which it has since divested), an activities pontoon, diving, a sailing catamaran and bought land on Nusa Lembongan – an island 25 minutes from Sanur.
It also developed a beach club in one location and a remote private castaway destination, Crystal Bay, for day trips.
“It was purely and simply because the numbers were so great off the back of the boat, that we thought, we have to offer some alternative day activity,” Mr Chandler says.
“Being brand new and being the only product there, the growth was quite exciting.”
Bali Hai Cruises group general manager Colin Beeck says growing the business’ offering is important for retaining its market.
“You have to develop and bring in new ideas. People going to Bali go quite often usually and, if you have nothing new to offer, then they’ll do something else,” he says.
The company established the Nusa Lembongan beach club in 1995 and the first of what are now known as Hai Tide Huts in 1998.
Mr Chandler says Nusa Lembongan was the chosen destination at the time for its convenient location and its beauty.
“You walk ashore and you think you are Robinson Crusoe,” he says of the remote Crystal Bay.
Mr Chandler was one of the pioneers when developing the business on Nusa Lembongan and the island has been picking up traction in property development since then.
Cottesloe-based property developer Tom Carmody is selling subdivided blocks for a client who was compelled to invest in the land when the opportunity arose after the global financial crisis.
The island is often likened to Perth’s playground, Rottnest Island, and Mr Carmody’s client has said he likens the land he has subdivided, known as The Point, with the best he has seen around the world, a view endorsed by architects who have seen the area.
“A lot of developers looked at it and said, ‘love to do it, you supply the land and we’ll do this’, financially that just didn’t make any sense,” he says.
“We have decided the way to go is to cut it up, subdivide it into big blocks and sell the blocks to like-minded people who are going to spend some money building something in keeping with the island.”
Mr Carmody says Nusa Lembongan is becoming more popular with tourists heading to Bali and, where the proportion of time spent on Bali and off the island used to be about 80 to 20, he can see that flipping around.
“It is like Bali used to be 30 or 40 years ago but there are some finer points to it now,” he says. “It is the colour of the water that tells the story.”
Mr Lincoln has been involved in architecture in Bali since 1999 and said while initially he kept his foot in the Australian market, engaging in residential projects, he was now totally focused on Bali.
“It is so busy here now that other work has dropped off. I have done other work around Indonesia but even that has dropped off with all the work in Bali,” he says.
“The core of work is residential. Most of that is for Australians and most of those are Western Australians.”
Mr Lincoln says the holiday-home market has been trending upwards for the past three years and puts that down to publicity of the region as a good investment.
Pauline Tew, who developed Smiths Beach Resort, Injidup Spa Retreat and West Perth’s boutique Outram Hotel under the My Hotel company, is working to develop a series of luxury serviced beach houses on Nusa Lembongan.
Ms Tew says the project is in its ‘embryonic’ stage and she is building her own beach house which she will use as a pilot project to establish how to run the business, to be named My Beach House Bali.
“Nusa Lembongan is very much to me like Rottnest, we had the lodge in Rottnest for a couple of years and that is the feeling I get from it,” she says.
Learning the ropes
Establishing a business in a foreign country can be intimidating, but those who have been involved in Bali have learnt the ropes.
Mr Chandler says engaging in business in Bali is easy enough, if people are willing to go by the book.
“Providing you are prepared to go through the right pathway, to go through all the requirements with licences and the requirements laid down, you don’t have a problem,” he says.
“It is the people that go in there and don’t follow the pathway that get into trouble.”
Mr Lincoln agrees and says people who have unrealistic expectations on how business is conducted in Bali should readjust their approach.
“They come here with a false sense of both economy and processes. You can certainly build a lot cheaper here than you can in Australia, but some people think it is 10 times cheaper when it is probably only four or five times cheaper to build the same quality,” he says.
“The challenges are using the right people. A lot of people will meet an Indonesian who says, ‘I’ve got some land you can buy’, it all sounds too easy and these stupid people go ahead with trusting someone.
“It is the same as anywhere in the world, you wouldn’t do it back in Australia, so why would you do it here.”
Mr Chandler has some advice for those expecting to conduct business in the same way they might in Australia.
“The one thing you would never want to do when you are doing business in Indonesia is to think like a Westerner,” he says, encouraging businesses to adapt to the cultural importance of business dealings.
Since Mr Chandler started Bali Hai Cruises 21 years ago, he says there have also been changes in industrial relations.
“The change that has occurred, as far as I am concerned, is the Balinese workforce is becoming far more aware of the power of unionised activity,” he says.
“It isn’t creating problems, it is still a place to do business but you have to be far more aware of things than when we started.”
Mr Lincoln says the laws around foreign investment in land and property may be partly convoluted but there is a better legal service in Bali for investors compared to when he first established his firm.
“For a long time there have been misconceptions about whether you could purchase land here,” he says.
With three main ways for foreigners to own land; freehold involves engaging with an Indonesian citizen nominee who holds the land title, utilisation of a company which allows foreign-owned Balinese companies to hold land assets; or through leasehold title with which the foreign investor leases the land for 25 or 40 years, which is renewable.
Mr Lincoln says having Western lawyers in Bali has made the laws more understandable for foreign investors.
“There are Westerners that have pulled the laws apart and know how to do it now,” he says.
“It is the same as anywhere, not doing your homework and using the right people, these things go belly up. It is the same as when you get into the building process, not using architects, not using builders that have any qualification.”
