DESPITE the decline in the rupiah against the US dollar and aggressive competition from Thailand, Indonesia’s travel trade stakeholders have said that lowering prices to further attract overseas visitors is not on their short-term agenda.
The rupiah last month dipped to Rp11,330 per US dollar on August 22, the lowest it has been since 2009, though it made a slight recovery by the end of the month.
Marintur Indonesia’s executive director, Ismail Ali, said: “Indonesia as a destination is becoming more affordable for travellers who come and spend their money here.
“However, as far as packaged tours by tour operators (from visitors’ countries of origin) are concerned, they will cost more or less the same, as the biggest price component is airfare.”
Before the stabilisation of the rupiah over the last few years, local inbound operators and hoteliers were asked by overseas travel partners to lower their prices in US dollars whenever there was a fall in the Indonesian currency.
While stakeholders TTG Asia e-Daily spoke to have not received any such requests as yet due to ongoing contracts, rates may become a point of debate when the next contracting season arrives.
Indonesia Hotel and Restaurant Association chairman, Yanti Sukamdani, explained: “In terms of operational costs, the impact (of a weaker rupiah) is much lower than that of the increase in oil prices, because the import component in hotel operations today is minimum.
“In terms of revenue, those who trade in the US dollar – such as hotels who have contracts with overseas tour operators or whose markets are international travellers – are gaining, but the majority of hotels in Indonesia today cater for the domestic market, and in rupiah.”
When asked if this was not a good time to reduce prices to compete with Thailand, Aneka Kartika Tours and Travel Services’ Surabaya operations manager, Adjie Wahjono, said: “The airfare component is around 60 per cent of the packaged tour price.
“With or without the weakening of the rupiah, airfares to Indonesia are always higher than to Thailand, so cutting the cost of the land component does not make much of a difference. Thailand can offer competitive prices with government support. Can we do the same?”
