The Jakarta Post
Holidaymakers have begun planning trips, a positive sign for the hard-hit tourism industry, but the financial concerns caused by the COVID-19 pandemic-induced economic downturn might affect the recovery, a study from travel website Tripadvisor shows.
The study, published on June 10, shows that 68 percent of customers surveyed were considering making travel plans, while hotel searches are also on the rise. Searches for hotels in Indonesia on the website increased 5.4 percent year-on-year (yoy) between March 29 and May 31.
“We are already seeing early signs of recovery in the travel-planning habits of millions of customers all over the world, who are actively researching and dreaming about their next big trip,” the report reads.
The searches are mostly focused on domestic travel in three months’ time, as more than half of respondents plan to travel domestically within the next six months, the research found.
According to the findings, Tripadvisor projects that the recovery of tourism, which has been hit hard by travel restrictions, will happen in stages. The stages include decline, plateau and emergence phases, before the return of domestic travel and international travel in the final phases.
However, the study also warns that the tourism recovery might be affected by consumers spending power and the negative perception of their financial stability due to the economic impacts of the COVID-19 pandemic.
The research shows that 40 percent of respondents stated that their household would be financially worse off over the next 12 months. Consequently, more than half of the respondents said they were likely to take fewer trips than the year prior.
“As the pandemic eases, the travel sector will not be able to operate as it did before, in part due to continuing interventions from governments, but also as a result of changing consumer expectations and spending power,” the report explains.
A recent Bank Indonesia survey showed that Indonesia’s consumer confidence index (IKK) had dropped to its lowest level in nearly 15 years in May, weighed down by negative perceptions of the current economic situation and a dearth of jobs with rampant layoffs.
In addition, fear of a potential second wave of infections is also casting a shadow over the positive trends, as it could bring the recovery process back to square one.
President Joko “Jokowi” Widodo has warned of a second COVID-19 wave in Indonesia as the number of new cases continues to soar amid the relaxation of large-scale social distancing (PSBB) in a number of regions. More than 38,000 confirmed COVID-19 cases had been recorded across the country as of Sunday.
Once demand for travel begins to rise, the study also underlined that there would be significant changes in the sector, including heightened hygiene and sanitization precautions.
“The years 2020 and 2021 will prove to be an unprecedented time for accommodations. Existing expectations for rates and performance based on pre-pandemic conditions must be re-evaluated,” the study reads.
Despite the positive trends, Indonesian Hotel and Restaurant Association (PHRI) chairman Hariyadi Sukamdani voiced similar concerns to those stated in the study regarding consumer spending power.
“Even if our travel industry starts to re-emerge, the next big challenge is the decreasing purchasing power of consumers. The majority of our workforce is reeling from the financial impacts [of the pandemic], which dissuades them from traveling,” he said on June 12.
He said that the country’s hotel and restaurant industry were still in the plateau stage, even though the restaurant business may begin to see a re-emergence when malls reopen.
Retail centers in Jakarta are scheduled to reopen on Monday as the capital city begin its transition out of PSBB measures this month.
In response to rising consumer concerns about sanitation, the Tourism and Creative Economy Ministry is preparing to launch a cleanliness, health and safety (CHS) program to encourage travel, the ministry’s spokesperson, Agustini Rahayu, said on June 10.
“To gain the public’s confidence we have prepared a CHS program, with information to be published through digital media, print media and out-of-home advertising. We’ve also prepared CHS protocol training for tourism workers,” she said during an online discussion.
In response to reduced purchasing power, hotel chain Westin Hotels and Resorts in Nusa Dua is offering discounts aimed at the domestic tourist market.
“We cannot expect much from the international tourist market because of the border closure, and that’s why we are offering affordable accommodation packages called Terima Kasih Indonesia [Thank You Indonesia],” Westin Nusa Dua’s communication director Dewi Anggraini said on June 10.
The packages start from Rp 2.2 million (US$154) for a two-night stay at the resort, a discount from the normal price of Rp 1.56 million per night, according to the resort’s website.