Government AffairsOTAs are given a two-month grace period to inform vendors operating without permits.

Indonesia clamps down on illegal villa rentals

May 31, 2026

Bali has over 2,000 hotels and villas operating without permits. Photo Credit: iStock/R.M. Nunes

The Indonesian government is tightening regulations on tourism and online travel businesses, following a rise in accommodation scams on social media platforms.

In a 26 May press conference in Jakarta, tourism minister Widiyanti Putri Wardhana said that many short-term accommodation providers, in particular villas, are operating without proper permits.

Authorities in Yogyakarta had filed reports on a growing number of such fraud cases, while Bali has over 2,000 hotels and villas operating without permits, according to a Jakarta Globe report.

Not only does this pose risks to tourists, but the illegal rentals also affect government tax revenues and licensed hotel operators, the minister said.

She added that hotels have complained of lower occupancy rates as travellers opt for cheaper villa rentals.

Deadline to clean up

Moving forward, the ministry will be working with the trade ministry and the communications and digital ministry to regulate such illegal accommodation sales and listings on social media platforms.

Currently, some 100,800 tourism accommodation businesses are registered in Indonesia’s Online Single Submission system, up 46.5% since March 2025.

To accelerate those numbers, an Application Programming Interface (API)-based verification system will be rolled out next.

The system will undergo a 12-month transition period starting 1 June. Once fully operational on 1 June 2027, accommodation providers without valid business license permits could face getting delisted from online platforms.

Online travel agencies (OTAs) such as Airbnb, Booking.com and Traveloka will be given a two-month grace period to inform affected vendors to apply for their permits. Businesses failing to do so by 1 August 2026 will risk getting removed from OTA platforms.

Across 2026, six coaching clinics have been arranged for over 1,500 tourism business operators to be educated on merchant and host licensing verifications.

The ministry has also released licensing guide videos distributed through OTA platforms to raise awareness.