Governor Wayan Koster is once again pushing for a new rule that could impact Bali’s tourism scene.
If you’ve seen headlines claiming “Bali is banning Airbnb,” you’re not alone. The rumour spread fast after Governor I Wayan Koster said he plans to stop Airbnb-style accommodation across the island. So… what is actually happening?
Let’s unpack it in a way that makes sense.
TL;DR
Bali is not banning Airbnb as an app. Governor Koster wants to crack down on illegal, unlicensed villa rentals that don’t pay tax or follow local regulations. A proposal is being prepared for 2026, but nothing has changed yet for travellers or legal accommodation owners.
What did the Governor say about Airbnb Ban in Bali?
During a recent hotel industry meeting in Denpasar, Governor Koster said he’s preparing a proposal to halt daily rentals marketed through platforms like Airbnb. He argues that many of these properties don’t have the proper permits, aren’t paying local taxes and are hurting Bali’s regional revenue.
He also said there are thousands of villas operating illegally, with some run by foreigners who lease local houses and re-rent them online without reporting income. That’s the part he wants to clean up. But here’s the key: He wasn’t talking about banning the Airbnb app itself. He was talking about illegal short-term rentals that happen to use Airbnb and similar platforms.
So… is Airbnb being banned?
Right now, no. There is no regulation, no official ban and no detailed policy yet.
What’s happening is more of a crackdown on unlicensed accommodation, not the removal of Airbnb from Bali. Think of it as the government trying to make the industry more fair, more regulated and more transparent. If a villa or hotel already has the correct permits, pays its taxes and follows the rules, it is not the main target.
Why is Bali doing this?
Tourism is back, but Bali’s regional revenue isn’t growing at the same pace. Hotels say they’re losing guests to villa rentals that:
- don’t report income
- don’t pay hotel taxes
- operate as businesses without proper licences
So while tourism numbers are rising again, the money flowing back to Bali isn’t matching up. Officials believe the “grey” short-term rental sector is part of the issue.
There’s also a bigger narrative here. Over the past few years, Bali has introduced guidelines on behaviour, shoreline use, waste management and building practices, all in an effort to rebalance tourism with community needs. This Airbnb discussion fits into that same pattern.
How will the Airbnb ban affect travellers?
For now, absolutely nothing changes. No new rule has been issued, and no timeline has been confirmed. If the proposal becomes law in 2026, travellers might notice:
- fewer ultra-cheap listings in the grey market
- clearer, safer and better-regulated accommodation options
- more transparency about what is legally allowed to operate
Your favourite villa or homestay will likely still exist – it may just need to show proper paperwork.
What about villa owners and hosts?
If you’re hosting short-term guests without the right permits and tax setup, things may get stricter. The government may start tightening inspections, issuing fines or requiring licences to be shown. Properly registered operators may even benefit from this shift.
What happens next?
Right now, Bali is still in the early stages. The provincial government is drafting the formal regulation, and once that draft is ready, it will move through several layers of review, from the legal bureau, tourism offices and regency governments, all the way to the Regional Legislative Council (DPRD). That process can take months, especially for a regulation that affects so many businesses and travellers.
When the draft is finally released, we’ll get clarity on several key points that are still very much up in the air:
1. What counts as a legal rental
Whether Bali will introduce a new category of short-term rental, or simply tighten existing villa and tourism licences. This will also show what paperwork owners must have before listing their property online.
2. How enforcement will work
Will there be inspections, fines or shutdown orders?
Will enforcement be handled by provincial officers, or by each regency individually?
And will Bali focus on foreign-run rentals, unlicensed villas, or all daily rentals without permits?
3. How platforms like Airbnb will be involved
In other countries, Airbnb is required to verify licences or remove illegal listings. We don’t know yet whether Bali will take the same approach or rely on local enforcement instead. This will be one of the biggest questions for hosts.
There is also the timeline. Koster mentioned 2026, but that does not guarantee the regulation will be finalised or fully enforced by then. Bali has introduced major tourism rules before, and the implementation has ranged from very fast to very slow depending on political support, coordination and public response.
For now, the proposal is exactly that – a proposal. Nothing has changed for travellers or legal accommodation providers. But it is clear that Bali wants to tidy up the short-term rental market, and the next few months will determine how big this shift really is.
What do you think?
Should Bali regulate short-term rentals more tightly, or is this a step too far? Join our conversation by leaving a comment here!
If you’re curious about other changes happening across the island, check out these stories too: