High domestic fares spur Indonesians to travel internationally

Domestic travel to destinations like Labuan Bajo (its Padar Island pictured)

Travel agents in Indonesia are reporting an increase in outbound traffic to international destinations in the face of soaring domestic airfares.

According to data from the Indonesia National Air Carrier Association, a number of Indonesian airlines increased their domestic airfares between 40 per cent and 120 per cent since November 2018.

Domestic travel to destinations like Labuan Bajo (its Padar Island pictured) are no longer value-for-money when compared to international travel due to expensive domestic air fares

While price hikes usually occur towards or during the peak season, prices remained high even after the December holiday period. On top of that, Lion Air started charging for check-in baggage in January.

As such, load factors for domestic flights have dropped significantly, and according to Nunug Rusmiati, chairman of ASITA (Association of The Indonesian Tours and Travel Agencies), “domestic ticket sales dropped by between 30 per cent and 40 per cent in the last couple of months”.

This has however, resulted in an increased demand for outbound travel, according to several agents interviewed.

Vina Oktania Sima, manager of Travindo Multi Ekspress, said that during the recent ASTINDO (The Indonesian Travel Agents Association) Travel Fair, the biggest B2C travel fair in Jakarta, most of her buyers booked outbound tour packages to destinations like Bangkok and Hainan because they were more affordable than domestic ones to like Bali, Labuan Bajo and Raja Ampat.

A 4D3N package to Hainan, for example, is priced at four million rupiah (US$280), inclusive of air tickets, meals and hotels. Meanwhile, travel to Bali already costs 2.5 million rupiah, excluding airfares.

Moreover, the “Chinese government is now eager to promote less-known destinations like Hainan”, said Vina, hence resulting in competitive prices.

“The problem is that domestic airfares are very expensive today. Air tickets from Jakarta to Bali, for example, are more expensive than that from Jakarta to Singapore. Although our guests say that Bali is more beautiful than Singapore, they prefer to go to Singapore because of financial considerations,” she added.

Jenny Margaretha, owner of Vanessa Tour, agreed that even though Indonesia has many beautiful tourist destinations, the high prices of domestic flights have pushed her customers to buy outbound packages instead. For example, a multi-country tour package to Thailand, Malaysia and Singapore which includes hotels and air tickets, costs just 4.7 million rupiah.

She shared that Indonesian clients who had initially planned to visit Bunaken Island in Manado, North Sulawesi, immediately cancelled their plans after finding out the price of domestic tickets was doubled that of another outbound trip she offered.

Jenny hence hopes the Indonesian government will step in to help solve the high prices of domestic flight tickets.

However, Pauline Suharno, ASTINDO’s secretary general and director of Elok Tour, feels that the greater interest in overseas travel is in part due to Indonesians’ larger appetite for outbound travel than domestic travel.

To spur domestic demand, the organising committee of ASTINDO has created subsidised domestic tour packages by cooperating with Sriwijaya Air and Santika Indonesia Hotels & Resorts. An example of a package created is a Jakarta-Belitung round-trip priced at 1.6 million rupiah, which includes airline tickets and a two-night hotel stay.

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