Bali is one of the most famous places in the world for people to travel to. People visit Bali for its beaches, hidden waterfalls, hikes to the top of volcanos, the ancient temples scattered around the island and lots of fun places to visit. It has more than a million tourists that come there every year – most of them from Australia. So why is Bali so cheap?
What makes Bali so special other than the obvious natural beauty and ample opportunities for fun? Bali is one of the cheapest exotic islands to travel to. The cost of traveling in Bali has consistently remained low which is what attracts tourists from around the world. You can get the same amenities in Bali that you would have to spend thousands of dollars in places like Mexico, Turks and Caicos, Puerto Rico or California.
This article has the complete breakdown of why Bali has such cheap food, hotels, attractions and transportation compared to other famous destinations. You will also find out how to spend your money wisely and make the most of your budget on your trip to Bali.
Why is Bali so cheap – Factors affecting cost of living
You will be surprised to know exactly how low the cost of living in Bali is. Keeping in mind that Bali has so many amenities it is a shock that it has one of the lowest cost of living in Southeast Asia. It is no wonder that so many tourists from India and Australia go here every year.
The cost of living in Bali on the lower end is $1000 per month. This includes rent, transportation, fuel, groceries, phone bill and internet. Comprate this to the cost of living in Los Angeles which is $2500 for one person. That is an insane 250% increase in the cost of living from Bali to Los Angeles.
The cost of living in New Delhi for one person is around $1500 but the standard of living is nowhere near Bali. There are no cheap good restaurants nearby, the ocean is not close and you cannot go out for drinks at cheap bars every night.
Tourist areas vs Lesser known places
The cost of living also depends on which area you are living in. Canggu and Seminyak are the most expensive because this is where the expat community and influencers are based. These towns cater to the foreign population specifically and bars and restaurants are rarely if ever frequented by locals. Ubud and Uluwatu are also very touristy towns with higher prices. Smaller towns like Sidemen, Lovina, Amed and Tulamben have very low prices for hotels, food and transport compared to the tourist hubs in Bali.
Lower wages for locals
The locals are used to their way of living and their cost of living is much lower than the ones I cited above. They own their own land, buy and cook food from local markets and own their scooters. They do not eat out at fancy restaurants and go to bars every night. Nor do they stay at fancy villas with pools.
Due to this reason they can survive on their wages which are $200 per month. Due to these low wages, business costs across all sectors like restaurants, bars, clubs, hotels, spas and gyms become very low and consequently tourists get low prices for these services.
Competition in service industries
In regards to amenities that towns like Canggu, Uluwatu and Ubud have – there are so many hotels, bars, spas and beach clubs that have opened up that the competition in the industry has become very fierce. To offset the competition the establishments opt to keep prices low. The hotels and villas incur a cost at the start to build and furnish the place and then they use the rent or revenue from Airbnb to offset the initial cost. Budget hotels and hostels are common in Bali for those looking for cheap accommodation.
Bargaining culture
South east Asia in particular is a part of the world where bargaining is seen as a normal part of life. India, Indonesia, Bangladesh, Malaysia you will find people bargaining everywhere. The prices aren’t fixed and it’s a big part of the culture. This also helps with keeping prices low and competitive.
Exchange rate
One of the most important reasons Bali feels so cheap to tourists coming from Australia and European countries is because of the strength of the currency in those countries. The USD to IDR conversion is 1$ = IDR 15,000 which goes a long way on the island. This is the major factor why Bali is so cheap. You can buy the same goods and services for a lower price because the conversion rate favors those currencies.
What is the cost of a trip to Bali?
Traveling to Bali can be very cheap or very expensive depending on the type of trip you plan. If you stay at expensive villas with a pool, eat out once a day, visit the attractions and go to a few clubs then you would probably end up spending around $3000 for a month.
If you are traveling on a budget then Bali is very cheap. You can stay at hostels and make your own food. You would have to be careful not to spend too much on eating outside or at clubs and bars.
The most expensive part of a budget trip to Bali would be the fights from your home country to Ngurah Rai International Airport. The cheapest flights to Bali are during the low season or the monsoon season. December, January and Febraury tend to have low flights to Bali.
Average cost of a week in Bali
| Expenditure | Bali on a budget = $380 | Luxury Bali trip = $1070+ |
| Accommodation | $40 | $500 |
| Transport | $30 | $30 |
| Food | $40 | $70 |
| Attractions | $10 per day = $70 | $70 |
| Shopping | $100 | $200 |
| Spas/Gyms/Clubs/Bars | $100 | $200 |
Cheap accomodations in Bali
The range of prices in hotels, Airbnbs and villas in Bali varies a lot. You get a lot for your money which would get you very little in other places which is why I love Bali. If you want a private room in a villa with a pool, kitchen and cleaning service every day in Canggu it would cost you $2000+ per month.
For a surf club where you get a smaller private room, with a pool and 20 other rooms on the property you will have to pay $1200 for the month.
For cheaper hostels, homestays and budget hotels you can pay as little as $5 a night. I would not recommend this though because there is no guarantee what condition they would be in. If you are doing a budget trip it would be best to get a hotel for $10 a night at a decent place. Most hotels also have breakfast included if you book on Booking.com so that will save you money on food as well.
Why is food so cheap in Bali?
The local food and drinks are very cheap in Bali. It is the restaurants being opened in Canggu and other hip places by foreign investors that have high prices. Those prices are still cheaper than what you would pay in big cities like Los Angeles and New Delhi.
At the local warungs, you can expect to pay $2.50 for a meal including fried rice, egg and a drink which is very cheap. At expensive places like Milk & Madu or Crate Cafe a single smoothie bowl or dish of pasta can cost between $4+ and you would still have to pay for side dishes and drinks.
If you are on a budget trip then the best way to save money would be to find cheap restaurants and eat at local warungs as much as possible.
How cheap is the transportation in Bali?
The cost of transportation in Bali is also very cheap. If you drive a scooter yourself like most tourists do you can rent a scooter in Bali for IDR 70,000 per day which is $4.5. This is cheaper than a single uber ride in countries like the US. You can get competitive prices at scooter rentals if you rent for longer periods of time. The only cost you will incur on transport other than rental is for the fuel which is very cheap in Bali. It costs IDR 50,000 to get a full tank of petrol for your scooter.
Apps like Grab and Gojek (Ubers for Indonesia) offer cheap rides on the back of scooters. This means you can get around the island even if you don’t rent a scooter yourself. You won’t have to pay for expensive taxi services.
Standard of living in Bali
Bali has a lot more amenities than most metropolitan cities. You will find spas, salons, beach clubs, underground bars, fantastic clubs, skateparks, shopping malls, farmers markets, ancient temples, surf breaks, Balinese dance performances and so much more. You can go crazy and spend a huge amount of money on these and this is what makes Bali fun.
If you are on a budget you should stick to the local attractions like temples, waterfalls and rice fields. The entrance fees for these are usually $3.5 which is very cheap compared to museums in the US which cost $30 tickets.
Conclusion: Why is Bali so cheap?
Bali is one of the cheapest and most affordable destinations in the world. People from all over the world come to Bali for its low cost vacations. From the hotels, food and transport everything in Bali is lower priced compared to other famous holiday destinations.
The average cost of a budget trip in Bali for a week is $380 while it can keep getting more expensive as your budget grows. You can find cheap homestays and you can splurge for expensive villas. There is a huge range of options available for all services in Bali. The fierce competition drives the prices lower which makes Bali very cheap.
The most important reason why Bali is so cheap is because of the strength of the western currencies and the currency in Australia. Because of the difference in currency you can get a lot more value for your money in Bali.
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