In a positive move for the tourism sector, Indonesia’s government has announced plans for incentives to travellers, tour agents and industry professionals, in an attempt to plug the gaps left by Chinese visitors in the wake of the global Covid-19 (formerly known as coronavirus) outbreak. According to the plan, travellers visiting certain destinations will be able to enjoy discounts on flights and hotels, along with a range of other benefits.
As confirmed by Indonesia’s President Joko “Jokowi” Widodo during a Cabinet meeting on Monday (17/2), the state will offer significant discounts to international travellers, in an effort to revive an industry that has seen widespread hotel and flight cancellations over fears of the virus. The Indonesian Hotel and Restaurant Association (PHRI) has recorded at least 20,000 cancellations in Bali alone since Covid-19 first hit the news in early January.
“I met with the finance minister this morning and we will weigh the possibility of providing a discount or incentive of up to 30% of actual prices to foreign tourists,” said the President. Ministers close to Jokowi has also added that service fees will be waived on airlines at local airports, while other measures are also being considered. According to the Jakarta Post, “[to] business players in tourism-related industries such as travel agents and airlines, the government will offer several incentives that can help them pass through the difficult time.”
Indonesian Finance Minister Sri Mulyani has elaborated on this initiative, confirming that “state-owned enterprises such as Pertamina and Angkasa Pura airport operator will provide incentives to airline operators.” These incentives could take the form of a tax reduction, lower airport fees, lower handling fees, and even lower jet fuel prices. The government is also looking into ways to make it easier for airlines to obtain slot permits at Indonesian airports.
Meanwhile, Transportation Minister Budi Karya Sumadi has urged airlines to re-route their China flights to new potential markets or add flights to their busiest routes. He has highlighted Australia and countries in the Middle East, along with South Asian markets like India, Pakistan and Bangladesh, as demographics where the Chinese shortfall could be recouped.
The Covid-19 outbreak has taken its toll on Indonesian airlines, particularly since the government imposed a travel ban on flights to and from China. National flag carrier Garuda Indonesia has suspended 40 weekly flights to mainland China, while Lion Air Group has also cut around 30 weekly flights.
Chinese tourists accounted for around 12% of all foreign arrivals to Indonesia in 2019, with around 2 million total visitors. For as long as travel from China remains restricted by the travel ban, Indonesia is expected to miss out on an estimated US$2.8 billion. To stimulate arrivals from other sources, the government is pulling out all the stops to welcome international travellers of other nationalities to Indonesia in 2020.
The full details of the incentives package are currently being worked out by Indonesia’s Health Ministry, Tourism and Creative Economy Ministry, Transportation Ministry and State-Owned Enterprises (SOE) Ministry. The final decision is expected to be shared within the next week.