Bali's tourism industry began after 1908. A steamship service linked Bali with Java and Makassar. In the 1920s, several hundred tourists visited; in the 1930s, several thousand steamship and cruise ship passengers visited. During World War II, when Japanese warships invaded Bali, the tourism industry ceased. Infrastructure in Bali and political events in Jakarta caused problems for tourism up to the late 1960s.
In 1967, Indonesia re-opened to the West and focused on tourism to address the balance of payments deficit. President Sukarno favored Bali, the home of his mother, and approved construction of an international airport and the Grand Bali Beach Hotel, Bali's tallest building. In 1972, a master plan intended to attract wealthy visitors also resulted in bringing budget-conscious visitors who bypassed the expensive hotels for economically priced homes or villas. Tremendous growth from 30,000 tourists in the late 1960s exceeded a million by the early 1990s. In 2009, international visitors numbered 2.2 million, while domestic visitors numbered 3.22 million and spent U.S.$744 million during an average stay of 4.2 days in Bali.
In 2002, the Bali Tourism Board was formed from nine associations including hotels, restaurants, tourist attractions, tour guides and transportation. This organization maintains information and communications for a sustainable tourism industry. Partnered with local communities, government and industry professionals, the Bali Tourism Board seeks to enhance Bali's standard of living.
The tourism industry likely boosted Bali's average income to one of the highest levels in the country, according to PT. Bali Untukmu. Tourism development had an impact on Bali tradition and lifestyle. Land prices have increased: rural Balinese often sell land below market value. With agricultural land transformed for tourism development, agricultural production declines.
Pressures on infrastructure and fresh water resources resulted in government restrictions on new hotel and accommodation projects in 2001. An unexpected development was the increase in villa complexes and resorts often licensed in the guise of a private, single family home. Illegally operating villas caused Bali to lose valuable tax revenues. In 2006, the Bali government faced the problem of illegal villas. According to the Bali Villa Association, which lists 45 villas as members, 1,000 villas operate illegally.
In 2002, a terrorist attack at the Sari Club in Kuta claimed over 200 lives. The avian bird flu epidemic, as of 2007, caused over 100 cases with over 80 deaths in Indonesia, according to the World Health Organization. This relatively high death toll deterred international visitors.
