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Travel agents fight to survive amid rising competition

Brick-and-mortar travel agents have been long-time players in Indonesia’s tourism industry with their conventional tour packages for groups and individuals, but they are completely new to 19-year-old university student Fifi Septiana

The Jakarta Post
Jakarta
Fri, March 1, 2019

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Travel agents fight to survive amid rising competition

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span>Brick-and-mortar travel agents have been long-time players in Indonesia’s tourism industry with their conventional tour packages for groups and individuals, but they are completely new to 19-year-old university student Fifi Septiana.

Fifi, who likes to travel in groups with her family or friends, said she had always relied on online booking app Traveloka to plan her trips, just like the growing number of young Indonesians who do the same.

However, her quest for an affordable trip to Bali led her to an annual travel fair held by the Indonesian Travel Agents Association (Astindo) recently at the Jakarta Convention Center. A number of special offers from travel agents at the exhibition caught her interest.

“I have never even known about, let alone used, any conventional travel agent services before. This will be my first time to find out more about them,” she told The Jakarta Post on the sidelines of the expo.

Fifi belongs to an age group that travel agents may need to pay special attention to if they wish to thrive amid rising competition from digital travel apps.

Unlike years ago, travelers can now book their flights, hotels and even tickets for tourist attractions anywhere in the world at their fingertips through online travel agents and booking services, such as tiket.com, pegipegi.com and Traveloka.

Rudiana, deputy chairman of Astindo, acknowledged that the shift of travelers to online services in planning their trips had affected the business of conventional travel agents.

He said the change was inevitable, noting that the convenience online travel agents and booking services offered was particularly appealing to millennials.

“We are trying to adapt to the shift by creating an online system and portal, called Astindo Hub, which our members can use collectively to provide online services for their customers,” he told reporters on the sidelines of the Astindo exhibition.

However, Rudiana said only a small number of members of the association had gone digital despite the apparent shift, stressing that his business group needed to push its members to embrace digitalization.

Traveling is no longer a luxury among lower-income families in developing economies. A 2017 report by Mastercard on the future of outbound travel in Asia-Pacific shows that, aside from higher-income families, middle-income households that earn between US$10,000 and $30,000 per year would drive outbound travel growth as the proportion of those within that income range was expected to increase to 27.9 percent in 2021 from 19.5 percent in 2016.

With online agent and booking services, travelers can now resort to budget traveling, which allows them to cut agent costs by planning their own trips.

For example, a conventional travel agent at the Astindo exhibition charged at least Rp 27 million ($1,915) for its seven-day trip package deal to Japan in March, which includes round-trip flight tickets, accommodation and meals and tickets for tourist attractions in some of its biggest cities, such as Osaka, Kyoto and Tokyo.

Meanwhile, with just several clicks on the web, travelers to the same destination during the same period only need to spend Rp 20 million, or even less to adjust to their preferences and budget.

Rudiana suggested that the government ensure a fairer business environment and equal treatment between conventional travel agents and online booking platforms, pinning hope on a draft government regulation on e-commerce business that has been under deliberation since 2015. (ars)

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