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As tourism recovers strongly, Traveloka stands to catch the wave
Traveloka president Caesar Indra spoke to The Jakarta Post’s Deni Ghifari on Oct. 27 about the company’s positioning, what it plans to do with the freshly acquired US$300 million funding and how the company is preparing for the tourism recovery in the region.
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em>Tourism was among the sectors that was hit hardest during the pandemic and yet, it has turned into one of the most strongly recovered industries as COVID-19’s end draws nearer.
Several sovereign wealth funds believe that now is the right time to catch the tourism wave, as big names like the Indonesia Investment Authority and BlackRock join hands to invest in Traveloka, one of the leading online travel agencies (OTA) in Southeast Asia.
Traveloka president Caesar Indra spoke to The Jakarta Post’s Deni Ghifari on Oct. 27 about the company’s positioning, what it plans to do with the freshly acquired US$300 million funding and how the company is preparing for the tourism recovery in the region.
Question: What is Traveloka focusing on currently?
Answer: We are currently focusing on deepening our travel offers. For example, we want to enrich options for customers by onboarding more airlines [in our platform], on top of developing more features.
Our focus, first and foremost, is travel as our core business and following that, we want to make sure that the complementary services around travel, such as buy-now-pay-later, are all provided for the customer.
How is tourism faring in this post-pandemic era?
Travel is now starting to recover steadily. Our domestic business is dragging the recovery, but international recovery is somewhat lagging. Despite that, we are still confident that tourism will fully recover in two years’ time.
Just like during the pandemic, we try to adjust our strategy and make sure that we pay attention to this new trends in travel and make sure we can capture the demand appropriately. We, as a company, are refocusing our advertising to make sure that we can capture this travel recovery.
What are you doing about your business abroad?
Apart from Indonesia, we also operate in Vietnam, Singapore, Thailand, the Philippines and Malaysia. Each country needs specific measures because each has different consumer trends along with different government regulations.
What we are trying to do is to make our strategy as relevant to the local situation as possible and we make partnerships with governments in the tourism sector recovery.
All those partnerships are tailored to local customer requirements, and so is the case with product offering.
In Thailand, we are like a local company. Everything is displayed in the local language and payment methods also adjust to each country.
Currently, the Indonesian market is still the biggest for us, it still contributes the most to our revenue stream. However, in Thailand and Vietnam, we have the dominant position, as we are the number one flight booking app.
That’s why we dare to say that, in Southeast Asia, we are the leading travel and lifestyle platform.
Can you reveal some deeper numbers on your business?
Generally, our users are 20 to 40 years old. Before the pandemic, the domestic side contributed only 50 percent of our business volumes, but everything turned upside down post-pandemic. Now, the domestic side accounts for around 80 to 90 percent and the pattern is the same for every country, apart from Singapore.
We have a strong balance sheet and the pandemic taught us a lot. We learned to be more disciplined financially, and the same applies for the way we run the company, which we believe will help us to become self-sufficient.
The pandemic taught us how to transform and adapt, and now we have a more solid foundation, which will enable us to capture opportunities from a recovering industry.
Do you think Traveloka has a good enough ecosystem to stay stand-alone without a merger?
We are pretty confident about our ecosystem, mainly because we are the leading platform in Southeast Asia. What we need to focus on is to build a more comprehensive product that spells connected experience for customers.
We want to be able to provide a more personalized offer to users. The strategy is simple, we want to remain relevant to customers by presenting choices and making sure they get the best experience, and selection comes next as we want to stay flexible.
To sum it up, we are pretty sure that with our ecosystem, we can actually thrive.
Can you tell us anything about the back story to the INA investment?
No, my legal team won’t allow that. But what I can tell you is that, historically, we are pretty selective when it comes to taking investment because the most prominent thing is: we have to have the same vision.
We don’t want to just take money; we want investors that understand our vision of becoming the biggest travel and lifestyle platform in the region. For that, we usually match with investors who have really long-term points of view.
That has always been our principle and we are quite lucky to have very good and supportive investors.
What about the rumor of Traveloka conducting an IPO?
That’s just a rumor. We don’t have any plan to undertake an IPO soon.
What do you plan to do with the fresh funding you just acquired?
We want to deepen our lead in the OTA sector. We are in six different countries and we want to strengthen our position in all of those. We will do that by investing in R&D, product development, more partnerships, and all those need funding.
We don’t have plans yet to expand to other countries apart from the six we are currently in because there is still a myriad of opportunities within those countries.
Do you focus more on user growth or monetization value?
It’s not so “black and white” when it comes to that. We will still push for growth, while generating profits, because that’s what a good company is and that’s what we’re trying to achieve.
To do that requires discipline in finance. Therefore, we need to be clear on the strategy, hence our focus on carrying out our core business, which is travel.
How will the gloomy 2023 macroeconomic outlook affect your business?
There are many forecasts that say it will be grim, but, weirdly, the demand for travel is still strong. Even when the prices are soaring, the demand remains strong, that’s what’s happening in this industry.
Macro-economically, there might be risks next year, it might be challenging but we are sure that the upward demand trend will continue, and I think the same applies to international demand.
