MARKETSCAN INDONESIA 2017
MarketScan Indonesia MarketScan Indonesia 2017 Inside knowledge of the Indonesian travel market is essential in order to gain access to this market. In this MarketScan, you will find a brief overview of the travel market as well as an insight into relevant trends and developments. De MarketScan Indonesia 2017 is a report of NBTC Holland Marketing (NBTC). NBTC is responsible for branding and marketing the Netherlands nationally and internationally. Using the 'Holland' brand, NBTC puts the country on the map as an attractive destination for holidays, business meetings and conventions. We carry out marketing activities in 13 markets, under the name of NBTC Netherlands Board of Tourism & Conventions. In cooperation with public and private partners, we attract visitors who spend money in the Netherlands. We cultivate countries and regions that supply the most visitors to the Netherlands. Based on this philosophy, NBTC is active in Europe, North America, Asia and South America (Brazil). 2
Content Indonesia in a nutshell population 4 Indonesia in a nutshell economy 5 Indonesian travel market 6 Internet and travel 7 Incoming tourism to Holland 8 Trends and developments 11 Destination Holland: SWOT 13 Holland Marketing in Indonesia 14 Contact 15 References 16 Page 3
Indonesia in a nuttshell - population Size of population (x millions) 306 285 258 239 209 2000 2010 2016 2025 2035 Age The population of Indonesia is increasing, in 2000 the country had 209 million inhabitants and now 258 million. The birth rate is higher than the mortality rate. It is expected that the country will have over 300 million Indonesians in 20. Indonesia worldwide largest predominant Islamic country. The breakdown of the population is as follows: Muslims 87%, Christian 7%, Roman Catholics 3%, Hindus 2%, others 1% (including Buddhist and Confucian) or unspecified 0,5%. Biggest cities: Jakarta 10.3 million, Surabaya 2.9 million, Bandung 2.5 million, Medan 2.2 million, Semarang 1.6 million. The rate of urbanization is 54% but there is a major concentration of the population on the Island Java, which is considered one of the most densely populated places on earth. Source: National bureau of statistics Indonesia (2017); The world Factbook (2017) 8% 7% 25% younger than 14 years 42% 17% 15-24 years 25-54 years 55-64 years 65 years and older Not less than a third of the population is 24 years old or younger. Only 7% of the people is 65 years of age or older. Source: The world Factbook (2017) 4
Indonesia in a nuttshell - economy Development GDP (%) 6.4 6.2 6.0 5.6 5.0 4.9 5.0 5.1 5.3 Growth in Indonesia continues to outpace that in most other countries, although it is below previous rates. Aggregate demand has held up, fuelled by government spending. However, despite healthy labour market outcomes and strong real wage increases, private consumption has failed to accelerate. GDP growth is projected to rise slightly to just over 5% in 2017 and 2018. 2010 2011 2012 2013 2014 2015 2016 2017* 2018* *Forecast Source: IMF (2017); OECD (2017) Exchange rate 1 - Rupiah 20.000,00 18.000,00 16.000,00 14.000,00 Indonesia s rupiah dropped during 2017 against the euro, pressured by slowing economic growth and high inflation. 12.000,00 10.000,00 Jan '15 Apr '15 Jul '15 Oct '15 Jan '16 Apr '16 Jul '16 Oct '16 Jan '17 Apr '17 Jul '17 Source: www.currency-converter.net 5
Indonesian travel market Number of outbound tourists (x million) 2011 2012 2013 2014 2015 Total 6.8 7.4 8.0 8.1 8.2 Main purpose(%) 52% According to Statistics Indonesia there were in 2015 8.2 million Indonesian travelers abroad for tourism purpose. Being a neighboring country, Singapore And Malaysia are the most preferred outbound travel destinations for Indonesian residents. Approximately 75% of the Indonesian travelers choose a ASEAN country as destination. The market share of Europe is still rather small (less than 4% in 2013). International travelers from Indonesia mostly visit short haul destinations, and are interested in history and culture. There has been a noted shift in travel patterns by Indonesians with recent economic changes, such as shorter trips and choosing destinations closer to home. June & July is a high-season period for Leisure group to travelling aboard to celebrate Ramadhan and end of academic school calendar. Another high-season period for Leisure group is December & January to celebrate Christmas & New Year. Source: BPS Statistics Indonesia, Ministry of Tourism (2016); Sydney Business Chamber (2017) holiday / leisure 14% 13% business visiting friends 10% 6% 2% 4% MICE health education others Almost half of the outbound trips has a holiday/leisure motif. Indonesia is likely the largest outbound medical travel market. About 1.5 2.0 million Indonesian medical travelers go to Southeast Asia or Australia. About 56% of the outbound trips are accounted for Indonesian households earning above US$30,000 per annum, an income range that accounts for 2.6 percent of all households. Outbound travel growth will be driven by middle income households and higher-income households. Source: BPS Statistics Indonesia, Ministry of Tourism (2016); Skift (2017); Mastercard (2016) 6
Internet and travel Internet penetration Norway Denmark Netherlands Sweden Japan UK Germany Belgium USA France Spain Russia Italy Brazil China Indonesia India 35% 97% 96% 95% 93% 93% 92% 89% 88% 88% 88% 82% 73% 66% 66% 53% 51% About 133 million people in Indonesia are using the internet (January 2017). The number of internet users grew with 51% compared to 2016 (+ 45 million users). The number of active mobile internet users in Indonesia reached the 123 million in January 2017; 47% of the total population. Indonesians are reportedly enthusiastic to adopt the internet and mobile technology, with a large youth market making increasing use of social media. Roughly seven in 10 travelers in Indonesia used a general search engine to research the destination for their last trip. OTAs also play a dominant role. The region's OTAs have strong brand awareness, and they are popular among travelers seeking deals and the ability to compare travel options across suppliers. Travel provider websites/apps are less popular for destination selection. Source: Wearesocial & Hootesuite (2017); Sydney Business Chamber (2017); Phocuswright (2017) Top 5 social media platforms (% of internet users) 1 YouTube 49% 2 Facebook 48% 3 Instagram 39% 4 Twitter 38% There are more than 100 million social media users in Indonesia. The most popular social media platforms are YouTube, Facebook, Instagram, Twitter and Whatsapp. 5 Whatsapp 38% Source: Wearesocial & Hootsuite (2017) 7
11 24 11 23 14 28 21 24 33 39 38 44 42 47 56 65 72 77 89 108 Incoming tourism to Holland Development inbound tourism (x 1,000) In 2016 there were 56,000 Indonesian overnight visitors in Holland. This is a increase of 18% compared to the year before. The latest figures on inbound tourism to Holland and our forecasts van be found in Tourism in perspective via our website. 2007 2008 2009 2010 2011 2012* 2013 2014 2015 2016 * Change in research design guests nights Source: CBS (2017) Indonesian visits per quarter of a year 26% 24% Jan-Mar Apr-Jun Jul-Sep Oct-Dec Indonesian visit Holland moreover during spring (April- June). 22% 28% Source: CBS (2017) 8
Incoming tourism to Holland Indonesian overnight guests 5 big cities 1 Amsterdam 35,000 2 Rotterdam 2,000 3 The Hague 2,000 4 Utrecht - During their stay in the Netherlands, 70% of the Indonesian guests visit the main Dutch cities. Amsterdam is the most popular city. 5 Maastricht - Source: CBS (2017) Spending Indonesian visitors Per person per stay 1,505 Indonesian guests spent 1,505 per person per stay. This is far above the average of 719 for all incoming tourists. In 2016 the Indonesian visitors spent 84 million in the Netherlands. Source: NBTC Statistics Incoming Tourism (2014); CBS (2017) 9
258 293 303 294 342 370 386 388 Incoming tourism to Holland Flight capacity Indonesia-NL 785 947 942 974 995 995 1033 1042 In 2016 the flight capacity (seats) from Indonesia to Holland increased with 4% compared to 2015. Garuda Indonesia and KLM are the two airlines that connect Indonesia with the Netherlands. There are 13 direct flights from Jakarta to Amsterdam Schiphol per week. 2010 2011 2012 2013 2014 2015 2016 2017* Seats (x 1,000) Departures Bron: RDC Apex (2017) The figures provide insight in the capacity of seats and flights, not in the occupation. Stopping flights are included in the numbers.. *Forecast 10
Trends and developments Continous growth of disposable incomes and wealthy individuals continues fuel outbound trip growth in Indonesia, especially for leisure purposes. Travelling is become a lifestyle. Middle income consumers in Indonesia can increasingly afford outbound trips due to lowest prices of airline tickets as well as the growing affordability of budget accommodations. Increasing awareness through travel tips and guides from various sources such as Internet and printed books has also had positive impact on boosting the number of outbound travelers especially those travelling without tour packages. Tour packages offering comprehensive services along with tour guides are still popular among family holidays. Major airline companies continue to offer seasonal promotions in order to boost their sales, thus making fares more competitive. Halal Tour product targeting Muslim travelers is gaining its popularity for Indonesia market. No-pork meal & space for praying must be considered to attract Muslim community / Muslim travelers while travelling. Outbound tour operator continues to offer low fares for tour packages with aggressive promotion at Shopping Malls as well as online campaign. Some major tour operator enlarge their FIT divisions to create flexible tour packages and tailor made tours. Visa process at selected embassies within European countries are the key consideration for tour manager to create product developments. Golden Triangle product (Netherlands, Brussel and France) are key products for West Europe giving 60% shares of tour collections in Tour operator products catalogues. Media promotions for Tour operators now is shifting to digital marketing where tour operators create collaborations with Travel Bloggers, Vlogers, Youtubers and Instagram celebrity giving endorsement and sharing experience in order to create viral information. 11
Trends and developments The most popular Holland destination for Indonesian Market from Year to Year: Amsterdam with Canal Cruise, Volendam, Zaanse Schans, Keukenhof (Seasonal), Madurodam and Roermond Shopping Outlet. Giethoorn starting become a popular destination this year, promoted by trades. Golden Rama Tour Brochure Antavaya Tour Brochure 12
Destination Holland: SWOT Strengths Popularity of Europe due to its rich cultural and historical heritage High awareness of Holland. Long historic, cultural and economic ties between Indonesia and Holland Holland is considered to be the gateway to Europe Daily (direct) flights from Jakarta to Amsterdam Assets of Holland; cultural heritage and the natural beauty of the country (flowers) (Pidgin) English is widely spoken in Indonesian cities Relatively easy to obtain Schengen visa Opportunities Growing interest of Indonesian citizens in travelling abroad Expected (more gradually) economic growth and growing (middle- and upper-class) population able to travel Growing flight capacity to Europe and Holland Indonesians are big spenders especially on shopping (but increasing price sensitivity and weak rupiah declines spending) Growing internet usage (mobile, social media and online bookings) Weaknesses Airport capacity difficulties in Indonesia On line booking difficulties for the Indonesians: - lack of broadband internet connections - low credit card penetration - lack of confidence in security of e-commerce In comparison to other European countries, Holland has a weak image concerning shopping/fashion and family attractions Europe is considered to be expensive The Dutch weather Schengen Visa Process via appointed agency takes longer process compare to France and Italy embassies Threats Indonesian market is difficult to enter Difficult to reach a relatively small target group Pressure on expanding flight services to Europe Dominance of intra-regional (and domestic) tourism Younger (upcoming) generation has no historical/emotional tie with Holland Expected upcoming competition between European countries 13
Holland Marketing in Indonesia 14
Contact More information or advice? The MarketScan is a product of NBTC Research. NBTC can offer your organisation tailor-made advice for instance about local network (trade and press), local market opportunities, cultural expertise, advice on marketing, communication, co-marketing opportunities etc. Office Contact NBTC Holland Marketing Ms. Carola van Rijn P.O. Box 63470 2502 JL The Hague The Netherlands +31 (0)70 370 53 89 cvanrijn@holland.com 15
References BPS, Statistics Indonesia, Ministry of Tourism Centraal Bureau voor de Statistiek (CBS), 2015. Statline CIA World Factbook, 2017 (www.cia.gov) Currency-converter.net International Monetary Fund (www.imf.org) Mastercard, Future of Outbound Travel in Asia Pacific (2016-2021), 2016 NBTC Statistics Incoming Tourism, 2014 NBTC The Future Perspective Destination Holland 2025 OECD, 2017 PhocusWright, The Southeast Asian Traveler, 2017 Skift (https://skift.com/2017/03/10/medical-tourism-is-big-business-but-still-an-emerging-market/) RDC Apex (www.rdcapex.com) Sydney Business Chamber, Asia regional Tourism Outlook and Key Markets, 2017 UNWTO. Key Outbound Tourism Markets in South East Asia Wearesocial & Hootesuite, 2017 (https://www.slideshare.net/wearesocialsg/digital-in-2017-southeast-asia) 16