TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

Online travel agencies hit hard by cancellations, bookings slump

  • Yunindita Prasidya, Eisya A. Eloksari

    The Jakarta Post

Jakarta   /   Tue, April 14, 2020   /   04:44 pm
 Online travel agencies hit hard by cancellations, bookings slump Fatahillah Square is closed on March 13 as part of the Jakarta administration's efforts to prevent the spread of COVID-19. (JP/Wendra Ajistyatama)

The COVID-19 outbreak has taken a toll on online travel agencies as a sharp decline in travelers and an increase in booking cancellations have severely hit revenues.

The companies are now shifting their focus and finding ways to cut down on expenses.

Online airline ticketing and hotel booking platform tiket.com, for example, has moved from focusing on sales to customer care because of the overwhelming demand for ticket refunds and rescheduling in recent weeks, the company’s cofounder and chief marketing officer, Gaery Undarsa, has said.

“[Requests] for refunds and rescheduling increased sevenfold [from normal days]. There were days when we received 10 times more requests than usual,” Gaery told reporters during a virtual press conference on Monday, 

He added that tiket.com’s revenue had fallen by 75 percent and he expected the fall to further continue as customers canceled or postponed their travel plans and the government had discouraged unnecessary travel.

The company decided to cut secondary spending such as marketing and discounting expenses up to 90 percent while retaining all of its employees and paying their full salaries.

“No layoffs, no salary cuts. We know that our number-one asset is the people and the team,” he said.

Gaery went on to explain that in a scenario where the pandemic had subsided and tiket.com saw a surge in customers going back to its platform, the company would be ready to cater to a spike in demand as there had been no capacity reduction in the workforce.

Other online travel agencies are dealing with similar issues and are attempting to strengthen their customer services.

Traveloka has also seen a drastic 10-fold daily increase in requests for refunds and rescheduling for airfares and hotel bookings since February, as announced in a press release published on March 23.

 

The Traveloka customer operations team handled thousands of inquiries every minute across different communication channels, including telephone, email, the Traveloka application and social media, in catering to its international customer base.

“We want to extend our apologies to our users for the inconvenience experienced when requesting assistance from Traveloka. We are currently strengthening our customer services to better serve our customers,” Traveloka chief marketing officer said in the written statement.

According to a report by Nikkei Asian Review, the company made around 100 employees or 10 percent of its workforce redundant two weeks ago because of slumping demand, while the remaining staff members are receiving half their regular salaries.

The company has yet to confirm the news. Traveloka public relations specialist Citra Dwillysa Putri said on Monday that the company's management team had yet to disseminate information regarding layoffs.

Based on a report by big data firm Statqo Analytics, traffic on traveloka.com was down by 60 percent in March. Other travel and hotel booking websites, such as tiket.com and Pegipegi, also saw a decrease in web traffic but not nearly as steep as Traveloka’s drop in 2 million visitors.

Pegipegi recorded a fourfold increase in trips cancellations and postponements. The company has promised to prioritize customers requesting a change in travel plans, said Pegipegi corporate communications manager Busyra Oryza.

“Pegipegi is still operating as usual; our website, application and customer service can still be accessed 24/7 to cater to customers,” Busyra said as quoted by Antara news agency on March 27.