Last year, on my first visit to Bali since the bombs, I partied on a cliff-top in the company of a supermodel, a Hollywood actor and a mermaid. Kristy Hinze, Jeremy Piven (Ari Gold from TV's Entourage) and the costumed sea creature were assembled for the grand opening of Karma Kandara at Uluwatu, on the island's southern tip. This chic resort of blinding white limestone and tumbling bougainvillea hovers above a private beach and reef lapped by the most translucent ice-blue water imaginable. It's like a Greek Island mirage.
A few months ago on a return visit, I partied at Nusa Dua with Henri Giscard d'Estaing, son of the former French president, Valéry. The head of the fun French resorts group Club Med, Giscard d'Estaing was in town to unveil the funky revamp of its landmark Nusa Dua hotel. The Moscow Circus performed and gorgeous bodies writhed in the disco until the very small hours. A few weeks earlier, jazz singer Jamie Cullum had also been in Nusa Dua, performing at the opening of the luxurious new St Regis resort at a diamonds and pearls-themed gala ball.
It's nonstop excitement in Bali right now. The global recession appears to have bypassed the palm-fringed shores of the Enchanted Isle; 2008 was its most successful year on record, and in the first four months of '09, tourist arrivals were exceeding expectations. It seems incredible that this is the same destination whose economic future hung in the balance just a few years ago. Bali is proving far more resilient than expected.
In downtown Denpasar, I stop by the Bali Property Expo held in the mannered surrounds of the members-only Canggu Club, a popular expatriate sanctuary near the beach. The "expo" turns out to be a sales team of five, spruiking new villa developments to foreign buyers. One of the spruikers is Polly Howley, a Perth native who invested in Bali and now urges others to do the same. "I bought land two years ago and built a villa," she explains with all the zeal of an evangelist, while showing me photos of her home on a laptop. "This was my dream and now it's a reality. And now I am showing others how they can do it too."
One of the villa complexes being promoted is in Dhyana Pura, a formerly unremarkable pocket of upmarket Seminyak that's become trendy since a handful of gay nightclubs opened there. "It's really happening," insists Howley, before asking whether I might be in the market for a slice of tropical paradise myself.
Dhyana Pura isn't the only bit of Bali on the up. The island's fortunes are soaring again as renewed prosperity carves expensive new enclaves from once-sleepy villages such as Uluwatu.
Speak to the likes of Howley and others who have made Bali their home or their business and there are no lingering security concerns for them. "It's happened, move on," she says of the two terrorist attacks in 2002 and 2005 that killed 222 people, maimed hundreds more, and devastated the island's businesses. "Once people get up here they don't really worry about security or bombs. It could happen anywhere, but it's at the back of the mind, not the front."
Certainly all the signs - the thriving market in holiday villas, five-star hotels, upmarket restaurants, bars and clubs - suggest that people have, on the whole, "moved on". And Bali, too, has changed in the aftermath of its most challenging era.
Forget the cheap digs of Kuta, the beaded cornrows and tacky souvenirs that for decades defined the Australian experience of this idyllic Indonesian island. All that still exists, of course, but it no longer dominates. From the wreckage of the bomb blasts has emerged a more mature, sophisticated destination that combines a unique culture and history with the lifestyles of the rich and famous.
On the same gorgeous peninsula as Karma Kandara lies the Bulgari hotel, whose opening in 2006 inspired a frenzy of superlatives and catapulted Bali into the realms of the world's most exclusive resort destinations. And at the end of this year both Karma and Bulgari will have a glamorous new neighbour in the form of the Banyan Tree Ungasan. It will feature 73 spacious pool villas, an outpost of Banyan Tree's award-winning spa and a smart cliff-top restaurant with sprawling Indian Ocean views. Just west of here, on the Bukit peninsula, the Raffles Group has snared 11 hectares of prime cliff-top territory and plans to build 84 villas, 21 "residences" and a wedding pavilion.
All up, there are nearly 40 major new developments planned for the island, part of a massive surge in new investment, mostly hotels, that topped $190 million in 2007 alone, according to a survey in the Bisnis Bali newspaper.
The boom is not confined to the island's desirable coastline. An hour's drive inland, the artists' village of Ubud continues to morph from the laidback hippie haven of old into a cosmopolitan cultural centre. Hillsides above the enchanting Ayung River valley are being colonised by the sort of dreamy designer resorts that incite people to cross the world to visit them. Como Shambhala Estate, opened in 2005 by Singapore business mogul Christina Ong, is arguably the finest. Rated among the world's best small hotels and resorts in Zagat's 2007/2008 survey, it attracts a celebrity clientele (Donna Karan, Jamie Durie and Sting among them) to detox and recharge. The holistic retreat blends stunning architecture and nature with health programs and Asia's best spa cuisine, created by talented Australian chef Chris Miller.
The most remarkable statistic to emerge from the recent flood of tourists is that Australia is once again the single biggest tourist market for Bali. Between January and April this year, increased flights between here and there (an average of 10 a day in peak season) saw 102,179 Australians touch down in Denpasar, a gain of almost a third on the same period in 2008.
Nyoman Wardawan, tourism promotion chief at the Bali Government Tourism Office, believes the enduring appeal of his country for Australians stems from "a very close relationship" in terms of personality. "The Balinese are very friendly, easygoing, they are good people in the eyes of Australian people," he says. Importantly, he believes Australians understand that the perpetrators of the terrorist attacks were not Balinese.
Perhaps the most visible change in the island's demeanour since the bombings is the level of security now commonplace everywhere. In the wake of the bombs, the Bali Security Council was formed, comprising the island's governor and chief of police, and officials from the army, tourism industry and village councils. All new tourist businesses have to provide adequate security as a condition of their operating permit, hence the myriad guards who man restaurants and boutiques, or check inside and underneath every vehicle entering the popular Centro Shopping Mall.
"Everyone in Bali now knows security is not the responsibility of the police only," Wardawan explains. "Bali is a paradise island - we want it to stay that way."
Another very visible response to the shattering of its serenity has been the proliferation of the traditional black-and-white check poleng cloth, known as ruwa bhineda, described by my guide, Yudi, as representing good and evil, fire and water, life and death. The balance of the two extremes in the cloth is believed to neutralise spirits and safeguard against evil. The cloth has always been a common sight on the island but seems even more prevalent now, draped around temple statuary, trees and people; a symbol of local faith - and perhaps hope - that they are strong enough to resist further assaults.
Even the brazen tawdriness of Kuta appears to have been toned down of late. The strip is still defined by cheap hotels and backpacker hostels, internet cafés, pizza, laundromats, money changers and horse rides. And anyone stupid enough to risk joining Schapelle Corby behind the razor-wired walls of Kerobokan jail can still head to Popies Lane I to score drugs.
But there are subtle changes. The sites of the Sari Club and Paddy's Irish Bar, grimly familiar to Australians after the 2002 bombings, are now an overgrown lot and a memorial, respectively. The memorial is an upright granite and marble monument listing the names of the dead over five tragic columns. Two of those are devoted to the 88 Australians killed on that Saturday night. Either side of the plaque, and on the steel fence enclosing the paddock where the Sari Club once stood, recent pilgrims have hung handwritten tributes and sympathies for the dead. About a block along Legian Road stands Paddy's: Reloaded. I ask Yudi if anyone goes there now. "Yes, of course, it's very popular," he confirms. "Especially since after the bomb."
Kuta is still a popular choice for budget travellers, but the fashionable crowds now swarm to Seminyak with its swanky resorts, villas, shopping and clubs - and its security. The style of low-cost, mass tourism that spawned Kuta is not what the island wants for its future, according to Wardawan.
"We don't need too many people coming to Bali. We have to think of the capacity of the island," he says. "The population at the moment is 3.5 million; with tourists at 1.5 million, say, that makes five million. Is this ideal for Bali? If not, we should minimise the number, and focus on quality tourism. Only select people will come. Attracting people with good expenditure, and longer stays, is much more important than inviting a lot of people who do nothing and don't buy a thing."
Lex Bartlem, Australia's new consul-general to Bali, was a member of the Australian response team sent there after the bombings. "Certainly there's a different feel in Bali now," he says. "Not only in the street but also the business mood; the economy at the moment is still buoyant."
That said, Bartlem urged Australian holidaymakers to weigh Bali's undeniable appeal against the federal government's travel advice. Currently that advice urges Australians to "reconsider their need to travel to Indonesia, including Bali, at this time due to the very high threat of terrorist attack".
"We still take security very, very seriously," Bartlem says. "According to the advice we have, there is still planning underway for an attack in Indonesia, and Bali is a key target for obvious reasons."
The beachfront restaurant Ku De Ta, established by self-styled "Greek boy from Melbourne" Arthur Chandros, epitomises Bali's new chic. Since opening in late 2000, this European-style beach club has helped redefine the island's design aesthetic - "We gave people a lot of inspiration," says Chandros - with its appealing mix of black-clad staff, cool music, legendary August party season and good food.
"I wanted something sharp and modern and fresh," says Chandros. "Just because you go to the tropics doesn't mean you have to give up the lifestyle. You need diversity to make Bali an international destination."
Ku De Ta, the island's favourite beachfront haunt, has just emerged from a major renovation. The highlight is new rooftop lounge bar Kuvé, which serves fine wines and produce, from foie gras to jamón Ibérico.
The aftermath of the terrorist attacks sent many operators broke and left industry observers wondering if the island could ever fully recover. Chandros has not only survived but thrived in the wake of those dark hours, and is a compelling example of how resourceful Bali's tourism industry is. But he credits the island's survival to its people, not to transplanted entrepreneurs like himself.
"I think business has rebounded better than ever, and I think it has done so because of the Balinese. People have a real connection with them, and they want to support them."