As the Indonesian government starts to ease social restrictions in some cities, including Jakarta, a Covid-19 epicentre in Indonesia, hotels are partnering with travel companies to lure locals to travel again.
In a recent webinar, the Association of Indonesian Tours and Travel Agencies (ASITA) and the Indonesian Hotels and Restaurant Association (IHRA) agreed to an MoU to craft deals to stimulate domestic demand.
Quoting various sources, Hariyadi Sukamdani, chairman of IHRA, reported at the webinar that Indonesia’s tourism industry employs around 13 million people and 90 per cent have been sent home without pay due to the Covid-19 outbreak.
It has also forced more than 2,000 hotels and 8,000 restaurants to shut down, with potential revenue loss of 30 trillion rupiah (US$2 billion) for hotels and 40 trillion rupiah for restaurants from January through April. Meanwhile, the airlines and tour operators have lost US$812 million and four trillion rupiah, respectively.
Tourism recovery hinged upon not only the people, but also the government, said Hariyadi, raising the question of whether the government will allocate state budget to lift the accommodation and meetings industries.
He said that IHRA was now striving to get a work capital amounting to 21.3 trillion rupiah for the upcoming six months, but claimed that it was hard to secure the government funding when there was zero demand. Hence, he added, there was the need to stimulate domestic demand.
According to Hariyadi, IHRA, which has 28,230 hotel members and 17,862 restaurant members, is ready to collaborate with ASITA to roll out competitive prices for domestic travellers.
Rusmiati, head of ASITA, said both sides stand to benefit greatly from the collaboration. “ASITA has 7,000 members. If (IHRA) works with ASITA, our members can help sell and promote (the good deals),” she said.
The MoU stipulates that IHRA members would come up with competitive pricing for ASITA members. To make the good deals work, IHRA and ASITA will bolster digital marketing and promotional efforts through social media and make working groups in their regional chapters as well as approach airlines to roll out competitively-priced airfares for domestic travellers.
I Ketut Ardana, managing director of Bali Sunshine and head of ASITA Bali Chapter, hoped that after IHRA and ASITA sign the MoU, that local traditional players would enjoy lower rates from hotels, compared to that of overseas agents and OTAs. He also expected hotels to stop giving contract rates directly to overseas agents.
Herman Muchtar, head of IHRA West Java chapter, agreed that providing special prices was a must, revealing that his members would offer discounts of up to 50 per cent during the West Java Extravaganza Sale that will be held from July 1 to August 30 to lure domestic tourists to visit West Java.
However, he opined that the current priority of IHRA was not to dole out good deals, but to urge the central government to give industry players economic stimulus packages to prevent the shutting down of more hotels. Low interest rate and moratorium on loan repayments were also needed.
Herman said that for some of the hotels in West Java, if they fail to receive stimulus from the government, they will likely only “last until July”.