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Businesses call on govt to tighten the screws on foreign travel agents
Association blamed those platforms for causing financial losses for local accommodation companies.
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Mandapa, a Ritz-Carlton Reserve property in Ubud, Bali, was named the top hotel in Asia and second best hotel in the world. (TripAdvisor/File)
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ndonesian hotels have called on the government to regulate foreign online travel agents (OTAs), as they blame those platforms for causing profit losses for local accommodations.
The Indonesian Hotel and Restaurant Association (PHRI) told The Jakarta Post on Feb. 28 that foreign OTAs need to have a physical presence in the country to be required to comply with the local taxation policy.
PHRI secretary-general Maulana “Alan” Yusran argued that amid the physical absence of the OTAs, it is local hotels that end up losing money.
“Since the [foreign OTAs] do not have business permits, the taxes that the government is supposed to collect from them are charged to the hotels. So, the [hotel] industry is losing [money],” Alan said.
The tax comprised 2 percent of the commission paid by hotels to foreign platforms, which Alan said did not apply to their arrangement with local OTAs.
According to Alan, this is because foreign OTAs do not have a physical presence in Indonesia, even though their services are accessible by foreign and local tourists in the country.
There are seven foreign OTAs listed in a PHRI document, including Singapore-based Agoda and the Netherland’s Booking.com, as well as more than 50 “channel managers”.
