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On the edge of Bali's palm-fringed Kuta Beach, where thousands of tourists flock each day, four cranes are busy at work on a massive beach front development.

Dubbed the Beach Walk, the $70 million "lifestyle resort" linking two luxury hotels with high-end restaurants, shops and conference facilities, is a testament to Bali's post-bombing resurgence as a tourist destination.

A decade ago, about 1.3 million foreign visitors came to the island, according to official figures. Then, after Islamic extremists bombed Kuta nightclubs in 2002, killing 202 people, the figure plummeted to 990,000.

But in 2010, despite a second bombing in 2005 which killed 20 people, foreign visitor numbers surged to a record 2.3 million.

This year, 2.5 million are expected, putting significant strain on the island's infrastructure and sparking an explosion in hotel numbers.

With the Indonesian island's rising appeal have come concerns its image as a tropical oasis is being tarnished by rampant development, overcrowding and gridlock.

"Tourists come to Bali to relax," Bali Hotels Association secretary-general Perry Markus said. "I can imagine how frustrated they will be if they end up getting stuck in horrendous traffic jams like in Jakarta."

Fearing the island could become a victim of its own success, Bali Governor Made Mangku Pastika in January took the extraordinary step of slapping a moratorium on new hotel development in the island's three busiest areas.

They include the famous surfing strips of Kuta and Sanur, the exclusive beachfront resort district of Nusa Dua and the rice-terraced hills around Ubud.

With its warm climate, friendly people and smorgasbord of accommodation options, ranging from luxury beach-side villas to bungalows in the rainforest, the appeal of Bali is easy to understand.

"I think we are one of the best destinations in Southeast Asia," Bali Tourism Board chairman Ida Bagus Ngurah Wijaya said. "We make everybody happy when they come to Bali."

But he too has noticed the increase in traffic jams along the narrow, potholed streets and has thrown his support behind the hotel moratorium.

"We don't want the development of tourism in Bali to backfire," he said.

There are now almost 50,000 rooms available across Bali on any given night, according to government figures. Most of these are in the congested south, where the moratorium on hotel development will be enforced.

"There is a lot of hotel accommodation already built in these three regencies (local council districts)," the head of the Bali government's Investment Board, Nyoman Suwirya Patra, said. "So we need to spread out the building of accommodation to other regencies."

It remains to be seen how effective the moratorium will be. But as an added incentive to shift tourism facilities to less-developed areas, there are plans for a second international airport in Bali's north and a new cruise ship terminal in the east.

Hotels Association secretary-general Markus believes the island's appeal as a "quality destination" is also under pressure on another front -- the recent success of low-cost chains like Tune Hotels, which promises "five-star beds at one-star prices".

"We don't want Bali to be viewed as a cheap destination because this island is too small. A cheap image will attract too many backpackers and result in overcrowding," Markus said.

He said 80 percent of Bali's hotel rooms are priced between $50 and $2,000 a night, but Tune, which follows the business model of low-cost airlines, charges just $15.

It is clean and comfortable but lacks the aesthetic charm Bali is famous for, such as luxuriant tropical gardens and rooms with homey rustic touches. At Tune, customers are charged extra if they want "non-essentials" such as towels, soap or air-conditioning.

"We don't need any more budget hotels like Tune which will stir unhealthy competition and drive our poor local guest houses out of business," Markus said.

"We want to project Bali as a quality destination so we can attract quality tourists who stay longer on the island and spend more."

It is a concern not shared by tourists like Arif Budiman, a professional photographer from Malaysia who spent four nights at one of Tune Hotels' two establishments in Bali.

"Here at Tune, you can't see much of the traditional Bali concept," he said. "But I don’t bother about that, as long as I can get a really clean room, good security, and most importantly, at a cheap price."


AFP