Learn more about online travel business opportunities in Indonesia
The Covid-19 pandemic has shaken all sectors, one of which is the tourism sector. However, after the discovery of Covid19 vaccines and vaccination processes have been running in many countries, it seems to be a new hope for the tourism sector. Slowly many countries are reopening domestic and international flights.
According to Wego Travel, until July 2021, there are more than 140 countries that have opened international flights. Although the rules vary, it can be certain that each country seeks to move the economy of its citizens back to the way it used to be. With the return of international flights opened, not a few tourists will come. This is where the role of online travel companies works to facilitate tourists.
The development of tour and travel companies in the world increases every year, including Indonesia. According to the Central Statistics Agency of Indonesia, the number of tourist destinations in Indonesia reaches more than 3000. The number of these destinations certainly affects the number of tourists who come. In 2017, Indonesia was visited by more than 14 million foreign tourists, an increase of more than two million tourist visits from the previous year. The Travel and Tourism Competitiveness Report 2019 ranks Indonesia 40th out of 140 countries overall with a Travel and Tourism Competitiveness Index score of 4.3. It is a two step improvement from Indonesia’s 2017 position of 42nd out of 136 countries overall with an index score of 4.2.
Learn more about the online travel company in Indonesia through this article.
Overview of Online Travel Company in Indonesia
Indonesia, as one of the favorite tourism locations in the world, is speeding up the vaccination process so that international flights can be opened soon for tourists who want to visit Indonesia. According to Indonesia’s statistics bureau, the foreign tourist arrivals were 15.8 million in 2018. With the tourism industry gaining a foothold in Indonesia, there is a sudden increase in the number of Online Travel Companies or Online Travel Agents (OTA).
This may be due to digitization in the country and the convenience it offers customers to book hotels, flights, transport, etc. online. Currently, there are more than 50 OTA startups in Indonesia offering online travel services to both domestic and international tourists. Online travel companies operating in Indonesia not only belong to Indonesia but also many from abroad.
COVID-19 Impact on Online Travel Company in Indonesia
Before COVID-19, travel and tourism had become one of the most important sectors in the world economy, accounting for 10% of global GDP and more than 320 million jobs worldwide. Therefore, the decline of the mobilization of the world community must have a big effect on the tourism sector. Of course, Indonesia’s tourism sector is no exception. The impact of the Pandemic on the decline in the Indonesian tourism sector and its implications for GDP, where the economic potential lost due to the 2020 pandemic reached IDR 200.92 trillion, and the contribution of the tourism sector to GDP fell sharply by -53.29%, to the level of 1.16%.
This certainly has a huge impact on tourism-related businesses. Many online travel companies go bankrupt, but some are strong enough to survive. Online travel companies that are strong to survive include big companies such as Traveloka, PegiPegi, TripAdvisor, and others. Surely they certainly have a strong system in it. In addition, because of their big names, they certainly already have loyal customers to them. So that obstacles as big as the Covid19 pandemic can be overcome.
Global Online Travel Company in Indonesia
The number of online travel companies in Indonesia increased gradually from 2010 until now. Since 2010, a new booking service agency has emanated almost every year. A report by Daily Social in 2018 showed 71.44% of respondents have used OTA services for ticket/hotel reservation purposes. A study by e-conomy SEA also predicted that the regional market for online travel, including hotels, airlines and rides, will expand to nearly USD 90 billion by 2025. Knowing the fact, there are foreign online travel companies that are already expanding their business to Indonesia. Here are some foreign online travel companies in Indonesia:
Agoda.com is a Singaporean online travel agency. Founded in 2005, the company grew rapidly in Asia and was taken over by the world’s largest online booking provider, Booking Holdings Inc. in 2007. Agoda’s main office is in Singapore with 53 branches in major cities in 30 countries. Agoda provides more than 2 million accommodation properties, including apartments, villas, houses and hotels, and is supported by more than 15 million reviews from travelers.
In Indonesia, Agoda has partnered with local residents to provide 67,642 accommodations for tourists to stay. According to a survey by Rakuten Insight on online travel agencies in Indonesia (January 2021) 37% of 3,949 respondents at the age 16 years and older used Agoda.
Tripadvisor is an American online travel company that offers online hotel reservations and bookings for transportation, lodging, travel experiences, and restaurants. Tripadvisor also provides 859 million reviews and opinions on 8.6 million accommodations, restaurants, experiences, airlines, and cruises from over the world. In Indonesia, Tripadvisor has 4861862 reviews of hotels, attractions, and restaurants making it one of the best resources about Indonesian tourism.
A survey by Rakuten Insight (2021) on online travel agencies in Indonesia showed that 11% of 3,949 respondents at the age 16 years and older used Tripadvisor when it comes to planning for their travels.
Via.com is a travel portal and online travel company based in Bangalore, India. Via.com networks with more than 100,000 partners across 10,000 towns and cities globally. Via.com provides access to a complete travel product ordering system, including airline tickets, train tickets, hotels, vacation packages, buses, car rentals, and insurance.
Via.com Indonesia has received several awards from regional and international airlines, such as being the Top Performing Agent for their contribution in increasing the sales performance of various airlines and the Top 20 Performing Agent by Cathay Pacific Airways in 2018.
Via.com partners with more than 17,000 agents in all 33 provinces in Indonesia. Via.com strives to become a trusted travel agent. Even in this pandemic, Via.com’s operational team provides the best service 24 hours a day. Of the 17,000 agents who became partners Via.com in Indonesia, there are more than 190,000 users of these agents per year. Although, in the pandemic period such as today the number of service users decreases, but the quality of service Via.com remains good. There were more than 70,000 domestic and 24,000 international refund requests this year. Also, more than 14,000 domestic and 9,500 international rescheduling requests, and more than 22,000 deposit refunds were processed successfully. From the data, it can be seen that Via.com is cooperative with their consumers and shows that Via.com is trustworthy.
Expedia is one of the fastest growing online travel portals in Asia, offering travelers a wide selection of hotels, activities and travel services to suit all budgets and activities at competitive rates. With over hundreds of thousands of partner hotels worldwide and a comprehensive offering of flight inventory available on the website, travelers can book whatever they need for their vacation – rooms to suit every budget, a wide range of activities and travel services to complement.
A survey by Rakuten Insight on online travel agencies in Indonesian 2021 also showed that 4% of 3,949 respondents at the age 16 years and older used Expedia.
Opportunity for Online Travel Company in Indonesia
In May 2016 a study by Singapore’s state investment firm, Temasek Holdings collaborated with Google entitled “e-Conomy SEA” found that Southeast Asia, led by Indonesia, was the world’s fastest-growing internet market that has huge potential for the online travel market. Moreover, recent data from the World Travel and Tourism Council (WTTC) showed that Indonesia is the second-fastest tourism growth in Southeast Asia and ninth worldwide.
Investors also have recognized Indonesia’s massive potential in the travel tech space, knowing the report by Vynn Capital said in 2019, startups in the country accounted for 70% of travel tech investments in Southeast Asia. From the data, we can say that Indonesia has great potential in the online travel business. Currently, there are more than 50 online travel companies in the country, offering online travel services to both domestic and international tourists.
BRIGHT Indonesia as Your Perfect Local Partner
BRIGHT Indonesia is an ideal business partner for you. We will assist you on the ground, including virtual assistants during the mission, logistical planning, and detailed communication. It can cause your company to focus on developing partnership cooperation rather than the hassles of the business trip.
BRIGHT Indonesia provides several services such as Business Registration and Establishment, Business Partnership Engagement, Management and Strategy Consulting, and Foreign Direct Investment. The services will help your business to:
- Registering and establishing client companies in Indonesia. Also, secure the agreement between client companies and future Indonesian business partners by providing a list of potentially suitable partners, arrange business meetings, and act as a liaison.
- Help client companies obtain the work and stay permit for your foreign employee in the Indonesian office: expatriates utilization plan (RPTKA), expatriates utilization permit (IMTA), and limited stay permit (KITAS).
- Supporting our foreign client companies from the private sector with developing corporate or business unit strategies or helping your company from public sector organizations with public policy.
- Link client companies both from the private and public sectors in global foreign direct investment (FDI) through training and assisting your company in entering FDI source countries to gather investment for your company’s local markets.
For more information, email email@example.com.
*This article is written by Sintya Nur Muftiana and Debora Septenia