Mataram Tightens Oversight as Four Budget Hotels Shift to Boarding Houses

Mataram — — City authorities are tightening oversight of budget hotels that have switched to boarding-house operations in Cakranegara, following a wave of business-use changes linked to falling occupancy and government spending cuts, according to local officials.

Cakranegara Subdistrict Head Irfan Syafindra said his office has instructed all urban village and neighbourhood heads to update data on former budget hotels now operating, or seeking to operate, as boarding houses.

He said the mapping exercise is intended to anticipate activities that could disturb residents’ comfort, including potential immoral behaviour, drug abuse and theft, but did not cite specific confirmed cases at the properties.

Four hotels changing business model

According to Achmad Amrin, head of service at the Regional Finance Agency (Badan Keuangan Daerah, BKD) of Mataram, four budget hotels in the city have applied to change their business use to boarding houses.

Amrin said the four properties are located in Cakranegara and have experienced declining guest visits, prompting owners to seek alternative business models.

The BKD is conducting field checks to determine how the converted properties collect payments and to decide their tax status.

Amrin explained that if a boarding house still charges guests on a daily basis, it will continue to be categorised as a hotel for local tax purposes.

If it has fully shifted to monthly rents, the BKD will cancel the property’s regional taxpayer identification number for hotel tax and its obligations will shift to central income or value-added tax.

Local oversight, not alleged violations

Syafindra said Cakranegara is one of the areas in Mataram where budget hotels have begun changing function, driven in part by competition from newer, better-equipped boarding houses.

He noted that the subdistrict’s instruction to update data on former hotels is aimed at preventive oversight, rather than responding to proven violations.

The officials did not publicly identify the four properties that have applied for business-use changes, nor did they provide details on building permits, zoning approvals or fire-safety compliance.

They also did not state whether the four applications have already been approved or remain under evaluation.

Pressure from spending cuts and competition

Amrin said many hotels in Mataram rely heavily on meetings, incentives, conferences and exhibitions, with occupancy supported by guests attending government events.

He linked the recent pressure on budget hotels to national spending-efficiency measures introduced under Presidential Instruction No. 1 of 2025 on budget efficiency in the implementation of the state and regional budgets.

The instruction orders ministries, agencies and regional governments to cut travel spending, with regional leaders told to reduce official travel budgets by 50 percent and to limit ceremonial and meeting activities.

Industry groups have reported that these cuts, especially in travel and official events, are starting to affect hotel revenues in various cities.

In Mataram, Syafindra said the emergence of modern boarding houses with more facilities and lower daily costs has intensified competition for budget hotels.

Local hotel associations have previously noted that some budget properties in the city have ceased operations under pressure from low occupancy and the growth of upmarket boarding houses.

Officials have not yet provided citywide figures on hotel occupancy or the number of rooms converted to boarding-house units, leaving the overall impact on Mataram’s tourism and rental markets unclear.

For now, the municipal government is focusing on tax classification and neighbourhood oversight as more budget hotels explore longer-term accommodation models.

Sources

• Detik Bali
• NTBSatu
• Scribd (Instruksi Presiden Republik Indonesia Nomor 1 Tahun 2025)
• CNN Indonesia
• PHRI (Perhimpunan Hotel dan Restoran Indonesia)