Indonesia: Change on the itinerary

• May 18, 2020

Indonesia is bracing for a new normal in the tourism industry as it lays the groundwork for a post-Covid revival by next year.

“In the future, we will focus on some issues that really matter in order to anticipate new tourism trends and paradigms, or the ‘new normal’, where people would be more concerned, for example, with sanitation and hygiene issues,” said Wishnutama Kusubandio, the tourism and creative economy minister.

“It would also include improving technological and digital approaches to tourism services and the creative economy.”

How tourism sites implement social and physical distancing measures will be a big part of the future direction, he said.

So too will digital platforms as a key part of the travel and tourism ecosystem where buyers and sellers meet, he added.

Bali, the country’s most popular destination, is hoping to start welcoming some domestic visitors back as early as next month, but traveller profiles will be different, according to IB Agung Partha Adnyana, head of the Bali Tourism Board.

“Our market will change. There will be few big groups and more families travelling together,” he told Asia Focus. “We will adopt new protocols in various aspects and we will focus first on domestic tourists, at least until the end of the year.”

Based on 2019 data provided by the travel portals Agoda and Traveloka, domestic tourists accounted for 60% of all the arrivals to the island.

“We will gradually focus on regional clients such as from Singapore and other neighbouring countries, and move on to the wider Asian region such as China, but this will depend on whether international travel restrictions are lifted,” said Mr Adnyana.

Despite the high influx of foreigners on the island in January and various direct flights from China including from Wuhan where the pandemic originated, Bali has accounted for only about 2% of the national caseload of Covid-19 infections so far.

The number of foreign tourist arrivals nationwide in March dropped by 45.5% from February and was down by 64% from March last year, according to Statistics Indonesia.

The cumulative decline from January to March was 2.61 million arrivals or 30.6%, Mr Kusubandio said, adding that revenue generated from the industry could drop by more than 50% from the US$20 billion forecast earlier.

Mr Adnyana said tourism revenue in Bali last year was 9.35 trillion rupiah (US$630 million), or 55% of the national total.

Indonesia has been working to make tourism a core economic driver within five years, with a revenue contribution on par with that of the palm oil sector. It had set a target of 17 million foreign tourist arrivals in 2020 but the outbreak has left that plan in tatters.

Finance Minister Sri Mulyani said the pandemic had put Indonesian airlines under “tremendous pressure” with 12,703 domestic and international flight cancellations in January and February. The number of flights operating in the country plummeted from around 79,000 in pre-pandemic times to only around 70 now.

“The airline industry lost 207 billion rupiah ($13 million) in revenue in January and February,” Ms Mulyani said during a virtual meeting with lawmakers overseeing financial affairs on May 4.

Jakarta-based Statqo Analytics, in an analysis of web traffic in March, estimated the national aviation industry experienced a 44% drop, based on traffic on airline websites, while tourism and hospitality sites had a 55% decrease in activity.

The airline analysis showed that Batik Air and budget carriers Citilink and Lion Air experienced significant drops, while the flag carrier Garuda Indonesia remained stable throughout March.

This suggested that middle- and upper-income earners who are the main group of Garuda flyers were still mobile despite the pandemic. They also had the financial means to fly to safer zones and escape from Jakarta, the Covid-19 epicentre, or because other airlines had reduced their flights.

According to the analytics, Traveloka experienced a 60% drop in website traffic in March, with similar decreases evident in similar sites such as Tiket.com, Trivago, Pegipegi and Nusatrip.com.

“This would have a direct impact on other businesses related to tourism and hospitality such as car rental, food and beverages, travel services and souvenir shops,” said a report by Statqo.

Dionisius Nathanael, the chief marketing officer of Traveloka, acknowledged that the tourism sector has been profoundly affected.

“The potent combination of trip cancellations and travel restrictions on international flights has had a staggering impact on the industry,” he said in an emailed response to Asia Focus.

At the same time, he said, the all-you-can-find travel services app had been facing a significant increase in assistance requests — up to 10 times higher than in normal times.

Mr Nathanael said Traveloka had been refocusing its efforts to meet the shifting needs of users, whose main priority now is to stay safe. This has resulted in changes to travel plans, and high demand for refunds and rescheduling requests.

Internally, he added, the company has been strengthening its customer care team and improving its back-end system, as well as working closely with partners in order to accommodate requests from users affected by the travel collapse.

“The safety of our users has always been our main priority, especially during this challenging situation. Therefore, we encourage users to carefully plan their travel itinerary and follow the latest information announced by the government or relevant institutions, such as WHO, if they still have to travel during this period,” he said.

Traveloka declined to confirm news reports that it had laid off a number of staff.

The Indonesian Hotel and Restaurant Association (PHRI) said that as of April 13, 1,642 member hotels had been closed across the country with thousands of workers furloughed, while millions of others in sectors related to tourism are jobless.

Statqo undertook further analysis based on social media platforms, online forums and news websites with a focus on three main keywords: “PHK” or the Indonesian acronym for work termination, dirumahkan or being furloughed, and “bankrupt”. It indicated that the number of people who are out of jobs as a result of the outbreak was increasing.

PHK was used a lot in online exchanges, although searches related to furloughs were more common in Bali.

“We predict that this is due to the characteristic of tourism and hospitality industry in Bali,” Statqo said. “There seemed to be optimism that after the outbreak is over, the industry would revive and they could get their employees back to work without having to terminate their employment.”

Source: https://www.bangkokpost.com/business/1919892/change-on-the-itinerary