Travel agencies pin high hopes on visa-free policy

Travel agencies pin high hopes on visa-free policy

INDONESIA - Amid slower growth in the number of inbound tourist arrivals during the first few months of the year, the visa-free policy introduced by the government has been viewed as a breath of fresh air for travel agencies.

Tour and travel agencies including Panorama Group, Bayu Buana and Smailing Tour are among the companies that expect to net more inbound travelers amid the global economic slowdown and the weakening of the rupiah against the US dollar.

Rocky W. Praputranto, president director of PT Destinasi Tirta Nusantara, a subsidiary of Panorama Group, which focuses on inbound tourism, said the company was eyeing 15 per cent growth in the number of customers this year, from 112,118 recorded last year.

However, up to May this year, the company had failed to record an increase in the number of tourist arrivals, he said.

"It is unfortunate that up until May, we haven't recorded a significant growth in the number of clients, particularly due to the crisis in Europe and the depreciation of the euro against the US dollar. Most of our clients come from Europe but our transactions are mostly using the US dollar," Rocky said.

"We are hoping that the number will catch up in the second half of this year, following the implementation of the visa-free policy."

He added that the company would also shift its marketing focus, from Europe to Asian countries including China, India, Sri Lanka and Iran.

Panorama recorded Rp 56.4 billion (S$5.7 million) in gross revenues from inbound tourists in the first quarter of 2015, slightly up from Rp 54.9 billion in the same period last year.

Similarly, Pranowo Gumulia, the president director of listed tour and travel agency PT Bayu Buana, said that due to the depreciation of the rupiah against the dollar the firm was looking to increase the share of its inbound revenue from the current 25 per cent to 40 per cent.

"We see this [visa-free] policy as a stimulant for the tour and travel business and a chance to increase the share of inbound income. Currently our total income comprises 75 per cent outbound and 25 per cent inbound. We are looking to increase the share of inbound tourism to 40 per cent following the implementation of the visa-free policy," Pranowo said.

Bayu Buana recorded a 2.78 per cent increase in revenue during the first quarter of this year, from Rp 351 billion in the first three months of last year to Rp 360.9 billion.

Meanwhile, vice president marketing and communications at Smailing Tour, Putu Ayu Aristyadewi, said that although the company mostly targeted meetings, incentives, conventions and exhibitions(MICE) clients, the visa-free policy that spared tourists from the long process of visa application, was an effective promotion tool to further boost the company's revenue.

According to the Central Statistics Agency (BPS), total foreign tourist arrivals during the first five months of this year amounted to 3.84 million people, only a 3.85 per cent increase on the same period in 2014 - far below the growth recorded last year.

From January to May 2014, the BPS recorded that 3.7 million tourists arrived across the archipelago , which was a 9.96 per cent increase year-on-year.

Prior to the implementation of the visa-free policy, the government aimed to attract 10 million foreign visitors in 2015, a 7 to 8 per cent increase from the 9.3 million arrivals last year.

With the policy, the government expected to see an increase of around 500,000 to 1 million foreign arrivals from the initial target.

The number of foreign tourists during the January to May period revealed that the country has only recorded 36.57 per cent of the government's full-year target of 10.5 million foreign tourists.

Deputy tourism minister for overseas promotion I Gde Pitana said the impact of the new policy would be seen during the second half of the year, since the policy was implemented on June 12, two days after the presidential regulation was signed.

Tourism Minister Arief Yahya said that to further stimulate tourism, the government planned to waive visa requirements for another 30 countries next year, including India, Saudi Arabia and Portugal.

"The number of annual visitors from India reached around 300,000. Saudi Arabia is also one of our biggest markets in the Middle East and we haven't included Portugal within the European countries that are waived from visa requirements this year," Arief told reporters on Monday.

Last month, President Joko "Jokowi" Widodo announced the plan to waive visa fees for 30 more nationalities next year, following the recently issued presidential regulation on visa exemption for tourists coming from 30 countries.

Other than the four prime tourist markets, Canada, Mexico and the US are among the 30 countries.

Also included on the list are European countries such as Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Hungary, Italy, the Netherlands, Norway, Poland, Spain, Sweden, Switzerland and the UK, in addition to South Africa and Middle Eastern countries such as Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates (UAE).

Visas without fees will also be provided to tourists from New Zealand, Thailand, Malaysia, Singapore, Brunei Darussalam, the Philippines, the Hong Kong Special Administrative Region, the Macau Special Administrative Region, Chile, Morocco, Peru, Vietnam, Ecuador, Cambodia, Laos and Myanmar.

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