Indonesia Market Profile 2011
Market Overview 1.1 Market Overview Indonesia was Australia s thirteenth largest inbound market for total expenditure in 2010, with $0.608 billion spent on trips to Australia. In 2010: > > Indonesia was Australia s twelfth largest inbound market for visitor arrivals. There were 124,000 visitor arrivals, a 14 per cent increase compared to 2009. 1 > > Indonesia was Australia s thirteenth largest inbound market for total expenditure, with $0.608 billion spent on trips to Australia, a 14 per cent increase compared to 2009. > > Indonesia was Australia s twelfth largest market for visitor nights, with 4,966,027 nights spent in Australia. > > Indonesia was Australia s thirteenth highest ranking inbound market for dispersed nights, with 1,336,259 nights spent outside Sydney, Melbourne, Brisbane and Perth. > > The average length of stay for visitors from Indonesia was 44 nights, compared to the global average of 34 nights. > > Indonesia ranked eighth for the number of repeat visitors, with 76 per cent of visitors being repeat visitors. > > The largest purpose of visit segment in Indonesia was holiday, representing 44 per cent of total arrivals. 2 Sources: 1 ABS Overseas Arrivals and Departures, Australia, December 2010 2 TRA International Visitor Survey, December Quarter 2010 Total Population 1 Major cities 2 (ranked by population) Language/s Currency Indonesia 237,556,363 (November 2010 est.) City > > Greater Jakarta > > Surabaya > > Bandung > > Medan > > Palembang Bahasa Indonesia Indonesian Rupiah (IDR) GST/VAT 3 10 per cent (VAT ) Annual Leave Entitlement 4 12 days Public holidays 5 > > 1 January > > 3 February > > 15 March > > 4 April > > 22 April > > 9 May > > 2 June > > 28 June > > 17 August > > 31 August > > 7 November > > 26 November > > 25 December Population 8,223,000 2,410,000 2,025,000 1,602,000 1,085,000 New Year s Day Chinese New Year Birth of the Prophet Nyepi (Hindu New Year) Good Friday Waisak Day (Buddha s Birthday) Ascension Day Ascension of the Prophet Indonesian Independence Day Idul Fitri/ Lebaran (End of Ramadan) Idul Adha (Feast of the Sacrifice) Muharram (Islamic New Year) Christmas Day Weather 6 > > Indonesia has a tropical climate which varies from area to area. Market Outlook Visa Sources: 1 Statistics Indonesia (Accessed 23 November 2010) > > The heaviest rainfalls are recorded in December and January with humidity generally between 75 and 100 per cent. > > The eastern monsoon brings the driest weather (June to September), while the western monsoon brings the main rains (December to March). Temperatures range from 21 C to 33 C. For economic, political and market outlooks, please refer to the Indonesia profile, published by the Department of Foreign Affairs and Trade. For information on visa requirements for Indonesia, please visit the Embassy of the Republic of Indonesia 2 City Population (Accessed 23 November 2010) 3 International VAT Services 4 Human Resources Management Asia 5 World Travel Guide 2011 Public Holidays Indonesia 6 World Travel Guide Indonesia Climate 2
Market Performance 2.1 Arrivals Trends There were 123,898 arrivals from Indonesia in calendar year 2010, up 14 per cent on the previous year. The growth in arrivals was driven by holiday travel, up 16 per cent for the year. The peak travel period for Indonesians is the Eid AlFitri (Lebaran) holiday, which fell in September 2010. During that month, holiday arrivals were up 24 per cent compared to the same month in the previous year. Consumer and business confidence remained strong. Indonesia s Gross Domestic Product (GDP) grew six per cent in 2010, confirming its position among the top ranks of emerging markets. Most transactions in Indonesia are made in United States dollars, so the continuous strengthening of the Australian dollar against the United States dollar may impact ground costs for Indonesian visitors. In contrast, the lower Euro against the United States dollar and multidestination shopping opportunities has made Europe an attractive destination. Middle Eastern carriers are also offering attractive fares to Europe, using their Middle East hub. Melbourne and Sydney are the most popular destinations for Indonesian travellers to Australia. Very strong growth has also been registered for Brisbane. 180,000 History of Arrivals from Indonesia into Australia Source: ABS Overseas Arrivals & Departures 160,000 Total Arrivals per Year 140,000 120,000 100,000 80,000 60,000000 40,000 20,000 0 Dec80 Dec82 Dec84 Dec86 Dec88 Dec90 Dec92 Dec94 Dec96 Dec98 Dec00 Dec02 Dec04 Dec06 Dec08 Dec10 3
Market Performance 2.2 Australia s Market Share Australia s Market Share of Indonesia s Total Outbound > > Outbound travel from Indonesia has increased from 2.8 million trips in 2000, to 6.0 million in 2010 (forecast based on partial data updated on 2 December, 2010). > > Australia s share of Indonesia s total outbound has decreased from 3.5 per cent in 2000, to 2.1 per cent in 2010. Indonesia Total Outbound & Australia's Market Share Source: Tourism Economics (Tourism Decision Metrics) 2,794 3,009 3,241 3,491 3,941 4,106 4,751 5,436 6,076 6,324 5,952 3.5% 3.3% 2.8% 2.6% 2.1% 2.0% 1.8% 1.6% 1.6% 1.7% 2.1% 4.0% Outbound Travellers lers (000s) 2.0% 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 (f) Total Outbound (000s) Australia's Share of Total Outbound (%) Note: 2010 is a forecast value 0.0% Top Five Outbound Destinations > > In 2010, the top five outbound destinations for Indonesians were Singapore, Malaysia, China, Saudi Arabia and Hong Kong. > > Australia ranked 7th among all outbound destinations. 3,000 Top Outbound Destinations from Indonesia Source: Tourism Economics (Tourism Decision Metrics) 2,500 Outbound und Travellers (000s) 0s) 2,000 1,500 1,000 500 0 Singapore Malaysia China Saudi Arabia Hong Kong Australia 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 (f) Note: 2010 is a forecast value 4
Market Performance Australia s Market Share of OutofRegion Travel > > Indonesian travel outside of the South, South East Asia and the Middle East has increased from 0.8 million trips in 2000 to 1.4 million in 2010 (forecast based on partial data updated on 2 December, 2010). > > Australia s share of Indonesian outofregion outbound has decreased from 6.4 per cent in 2000 to 4.8 per cent in 2010. Outbound Out of Region Travellers (000s) 3,000 1,500 Indonesia Out of Region Outbound & Australia's Out of Region Market Share Source: Tourism Economics (Tourism Decision Metrics) 842 804 843 741 933 1,000 1,118 1,261 1,263 1,398 1,406 11.7% 12.2% 10.6% 12.2% 9.0% 8.3% 7.5% 7.1% 7.5% 7.8% 8.9% 20.0% 10.0% 0% 0 0.0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 (f) Total Outbound (000s) Australia's Share of Total Outbound (%) Note: 2010 is a forecast value Top OutofRegion Destinations > > In 2010, Indonesian travellers top destinations outside of South, South East Asia and the Middle East were China, Hong Kong, Australia, Korea and Macao. > > Australia ranked 3rd among outofregion outbound destinations 600 Top Outbound Out of Region Destinations from Indonesia Source: Tourism Economics (Tourism Decision Metrics) Outbound Out of Region Travellers (000s) 0s) 500 400 300 200 100 0 China Hong Kong Australia Korea Macao Japan 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 (f) Note: 2010 is a forecast value 5
Market Performance 2.3 Main Purpose of Visit and Age Visitors from Indonesia by Age and Purpose of Visit for 2010 Source: Australian Bureau of Statistics, Overseas Arrivals & Departures Total Indonesia 123,898 (100%) Other 10,226 (8%) Employment 8,860 (7%) Total Number of Visitors Education 13,472 (11%) Business 15,653 (13%) Visit Friend/ Relatives 21,253 253 (17%) Holiday 54,434 434 (44%) Under 15yrs 15 to 29yrs 30 to 44yrs 45 to 59yrs 60yrs & over 11,957 (10%) 31,243 (25%) 31,594 (26%) 35,292 (28%) 13,812 (11%) Note: Rate of Change charts show year on year changes for 2007 to 2010. Above the axis line indicates growth, below the axis line indicates decline. 6
Market Performance 2.4 Expenditure and Nights Average Visitor Spend $5,636 per trip Stay 42.7 nights Spend $132 per night Purpose of Visit Holiday Spend $2,981 per trip Stay 18.3 nights Spend $162 per night Visiting friends and relatives Spend $3,287 per trip Stay 23.1 nights Spend $142 per night Business Spend $2,914 per trip Stay 10.6 nights Spend $274 per night Other (including education and employment) Spend $12,349 per trip Stay 106.8 nights Spend $116 per night Age Groups 15 to 29 years Spend $9,992 per trip Stay 84.5 nights Spend $118 per night 30 to 44 years Spend $3,916 per trip Stay 31.1 nights Spend $126 per night 45 to 59 years Spend $3,522 per trip Stay 14.8 nights Spend $238 per night 60 years & over Spend $2,792 per trip Stay 24.9 nights Spend $112 per night For more information on international visitors to Australia, see Tourism Research Australia s International Visitor Profiles. Source: TRA International Visitors Survey (2006 to 2010) 7
INDONESIA Market Performance 2.5 Dispersal Nights Spent in Australia by Visitors from Indonesia S Source: IInternational t ti l Vi Visitors it SSurvey, 20062010, 2006 20 0 Average A Ni Nights ht per Y Year Legend Darwin 44,538k nights 1% of all nights 0 to 27,209,200 27,209,200 to 44,538,200 44,538,200 to 124,652,200 124,652,200 to 544,999,400 544,999,400 Not available Cairns Brisbane 174,861k nights 5% of all nights Gold Coast Perth 544 999k nights 544,999k 15% of all nights Sydney 1,159,235k nights 32% of all nights Adelaide 158,849k nights 4% of all nights T 6 Regions Top R i Outside O t id Capital C it l Cities Citi Nights (000s) % of Total Nights South Coast (NSW) 73,516 2% Gold Coast (QLD) 44,525 1% Hunter (NSW) 37,348 1% Tropical North Queensland 27,209 1% Australia's North West (WA) 20 526 20,526 1% Australia's South West (WA) 9,869 0% Note: The above map shows visitor nights spent in tourism regions, as defined by the Australian Bureau of Statistics. Please note that there may be one or two key destinations within the boundaries of each region where the majority of visitor nights are spent. 8 ACT 124,652k nights 3% of all nights Melbourne 1,165,545k nights 32% of all nights Hobart 15,061k nights 0% of all nights
Market Performance 2.6 Growth Outlook The Tourism Forecasting Committee Forecast Issue 2 (November 2010) estimates that arrivals from Indonesia will increase by 6.8 per cent in 2011 and 6.7 per cent in 2012, with a compound annual growth rate of 9.2 per cent between 20092014. The 2020 Tourism Industry Potential is a rallying call to Australian industry and governments to focus on increased returns from the tourism industry. The Potential, focused on overnight visitor expenditure, sets scenarios for growth for priority markets that exceed TFC forecasts. Globally, by 2020 the Potential for Australian tourism is estimated to be between $115 billion and $140 billion in overnight expenditure. Indonesia was Australia s thirteenth largest inbound market for total expenditure in 2010, with $0.608 billion spent on trips to Australia. $140 billion Australian Tourism by 2020 $150 $130 Global Potential for Overnight Tourism Expenditure in Australia by 2020 Source: International Visitors Survey & projection by BDA Marketing Planning Trend Potential $Billions, nominal $110 $90 $70 $50 $30 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 9
Aviation 3.1 Aviation Summary > > Direct capacity on the Indonesia to Australia route continued to show strong growth in 2010. > > Load factors remained relatively high during most of 2010 despite strong capacity growth, suggesting strong demand for the additional services. > > Services from legacy airline Garuda Indonesia grew as well as services from AirAsia, Virgin Blue and Jetstar. Jetstar opened up new destinations across Australia including Perth, Adelaide and Brisbane. Singapore Jakarta: GA(17; 7 via DPS) QF(4) JQ(2) Bali: GA(31) JQ(25) DJ(35) QZ(28) VC(3) XR(2) Port Hedland: XR(2) VC(1) > > Bilateral agreements were expanded in 2010 but already appear to be restricting growth on the route, with many airlines only granted a fraction of the capacity they applied for. > > In the past, capacity growth has primarily benefited Australians travelling outbound rather than Indonesians travelling to Australia, as the majority of growth is focused on Bali rather than Jakarta and Surabaya. However, this now appears to be changing. Darwin: JQ(10) QZ(7) Townsville: VC(2) Brisbane: JQ(7 via DRW) DJ(10) Aviation Summary Major carriers Garuda Qantas Singapore Airlines Seasonal Peaks June/July School holiday break, Lebaran Holiday and Christmas Direct seats (calendar year 2010) Load factors Calendar year 2010 Percentage change in average airfares Nov 2010 against Nov 2009 Percentage change in average airfares Nov 2010 against Sep 2008 1,050,600 (up 29%) 75% (up 2%) 9% 30% Sources: Department of Immigration and Citizenship Bureau of Infrastructure, Transport and Regional Economics International Air Transport Association Perth: GA(21) JQ(9) DJ(9) QZ(21) Adelaide: DJ(4) Sydney: GA(13) JQ(7; 2 via MEL) QF(4) DJ(5) Melbourne: GA(7) JQ(3) DJ(7) Key ( ) Direct services per week GA: Garuda Indonesia, JQ: Jetstar, QF: Qantas, DJ: Pacific Blue, QZ: Indonesia AirAsia, VC: Strategic Airlines, XR: SkyWest, DPS: Bali (Denpasar), DRW: Darwin, MEL: Melbourne Source: International Air Transport Intelligence, AirportIS Northern Summer (27 March 201129 October 2011) 2011 schedules and Origin Destination traffic for year ended November 2010 10
Aviation 3.2 Aviation Forecast > > Strong aviation capacity growth is forecast on the Indonesia to Australia route with significant interest among existing carriers such as Pacific Blue, Jetstar, Garuda Indonesia and AirAsia and among new entrants such as Strategic Airlines, SkyWest and Batavia. > > The key aviation challenge for the future is to fill the increased capacity with more inbound than outbound tourists during low travel periods, and to meet the high inbound demand from Indonesia during the peak travel periods of Lebaran, the midyear school holidays and Christmas. > > In recent years, capacity growth has focused on Bali (Denpasar) and Perth, but in 2011 growth is also expected from Jakarta, which is more beneficial for Indonesian tourists visiting Australia. Growth is also expected for Brisbane as well as the new ports of Darwin and Port Hedland. > > Garuda Indonesia added four weekly Jakarta to Sydney services in January 2011 and suspended the daily Bali to Perth service from August 2010 to July 2011. > > Lion Air has been identified as an airline to watch in 2011 by the Centre for Asia Pacific Aviation (CAPA) with aggressive international expansion plans, mainly focussed on China. The carrier has 139 aircraft on order, expecting two aircraft to be delivered every month between 2011 and 2015. > > With this strong growth forecast, Australia is expected to gain market share of overall capacity out of Indonesia. Singapore, Malaysia, Thailand and Middle Eastern destinations are also experiencing strong growth. Indonesia Outbound Seats to Australia Year End Dec09 Year End Dec10 Year End Dec11 (f) Bali Jakarta 83% 83% 83% 17% 17% 17% Indonesia Inbound Seats to Australia 0% 0% 3% 5% Year End Dec09 Year End Dec10 Year End Dec11 (f) 0% 43% 43% 39% 2% 1% 26% 25% 4% 9% 9% 14% 16% 1% 25% 1% 9% 2% 9% 14% Perth Sydney Melbourne Brisbane Darwin Adelaide Port Hedland Townsville Pie charts refer to direct capacity. Source: Airport Coordination Australia, Centre for Asia Pacific Aviation Bureau of Infrastructure, Transport and Regional Economics International Air Transport Association 11
Distribution 4.1 Distribution System Whilst there are a number of channels available to Indonesian consumers for planning and booking travel, most consumers book through traditional retail travel agencies. The internet is primarily used as a research tool, with many Indonesian travellers not yet comfortable with booking online. The free independent travel (FIT) sector is also growing in the Indonesian market. Wholesalers/ Large Agents Commission Level: Wholesalers will add markups onto net rates provided by inbound tour operators, to offer as commission to retail agents. > > Eight active wholesalers have developed their own packages to promote Australia. > > Key wholesalers include Avia Tour, Bayu Buana Travel, Dwidaya Tour, Golden Rama Express, Panen Tour, Smailing Tour, Wita Tour and Vaya Tour. > > The travel trade in Indonesia continues to operate under the traditional retail system, although the larger retail agents often take on the role of wholesalers. These retail agents market their own programs with links to inbound tour operators, on selling to smaller agencies. Retail Agents Commission Level: 10% to 15% > > Competitive consortium operations are common in Indonesia; particularly for group travel as it helps to generate larger group sizes. The two main consortiums are Holidays Wonders Consortium (Dwidaya Tour and Smailing Tour) and Our Holidays Consortium (Avia Tour, Bayu Buana Travel, Golden Rama Express and Wita Tour). Special Interest > > Best Tour is the only agent that handles school excursion tours and education travel, which is currently a small niche segment. Online > > A large percentage of free independent travel segment (FIT) use the internet to search for information on holiday destinations. However the majority of consumers book through travel agents. > > The internet is primarily used by travel agencies as a source of information and communication; not for making bookings. Agents generally prefer to make reservations via traditional Computer Reservation Systems, wholesalers and Inbound Tour Operators. > > Recently, airlines have increased their emphasis on internet bookings in an attempt to reduce costs. Aussie Specialists > > As at December 2010, there were 39 qualified Aussie Specialist agents in Indonesia. Inbound Tour Operators Commission Level: Inbound Tour Operators (ITOs) will usually offer a net rate to agents. > > ITOs are still responsible for the vast majority of group holiday business into Australia, including incentive bookings from agents. Business events > > Most retail agencies handle both leisure and business events in a highly competitive market. However, there are a few agencies that solely concentrate on incentive business, though numbers are relatively small to date. 12
Distribution Brochures and Rates Brochures and Rates Brochure Validity > > Due to price fluctuations throughout the year, agents generally do not publish prices in their annual brochures, Only suggested itineraries are featured. The latest prices are published on a new flyer when available, and attached to the brochures accordingly. Brochure Space Policy > > Generally, agents do not ask for contributions. Setting Rates > > The peak period is June and July, September and year end Christmas holidays, whilst off peak is January to May and October to November. Standard Rate Validity Periods > > Rates are valid from April to September and October to March, subject to peak periods. There is also a black out period during Lebaran (August to September) and in the Christmas holiday period. Seasonality of Indonesia Arrivals Source: ABS Overseas Arrivals & Departures, 2006 to 2010 110% Variation from Monthly Average Arrivals more than the average 55% 0% 55% less than the average 110% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec All Purposes Leisure Business Other Avg: 8,326 Avg: 4,881 Avg: 1,121 Avg: 5,783 Seasonality > > The peak booking periods for travel to Australia are May, August to September and November. > > The peak travel periods to Australia are September and December. 13
Distribution 4.2 Trends Planning and Purchasing Travel > > When buying travel there are a number of distribution channels available to consumers. They may research and book their trip using a combination of traditional distribution partners and online options. > > Though internet bookings are increasing, consumers are generally not comfortable to book online, due to concerns that something may go wrong with their booking. Indonesian consumers traditionally purchase through travel agents, as they seek assurance that someone will take responsibility if anything goes wrong with their purchase. > > There is a shift towards FIT travel, with many consumers still choosing to book flights through agents, but making fewer bookings for accommodation prior to departure. > > Groups tend to travel during peak season when the major holidays (school, Lebaran and Christmas) occur. The lead time is three to four weeks prior to the peak season. FIT travel more during the off peak months and have a shorter lead time compared to groups. > > There are two consumer segments; one which is price driven and more inclined to switch operators based on the ability to get a better deal, the other consists of affluent consumers who stay loyal to agencies who provide customised service. > > The majority of Australian sales are from Jakarta (Indonesia s key outbound market) due to the number of direct services to Australia and to hubs such as Singapore and Kuala Lumpur, which have frequent services to Australia. 4.3 Planning a Visit to market Top tips for sales calls > > Avoid sales call in the peak June and July school holiday season, Lebaran and Christmas holidays. > > Trust and relationship management is important in the Indonesian market as it helps to build loyalty. > > Due to heavy traffic conditions, a realistic program is five to six sales calls a day. > > Plan and combine visits that are in the same geographical area so you can maximise the number of sales calls. Rent a car for the day to avoid having to look for taxis and encountering miscommunication issues as not all Indonesian taxi drivers speak English. > > The best time for sales calls is January to April and October to November. > > The key market centre to visit is Jakarta. > > For more general information on sales calls and planning a visit to market, please see Tourism Australia s Planning for Inbound Success. 4.4 Key Trade and Consumer Events Key Trade and Consumer Events Event Location Date In House or Shopping Mall Travel Fairs Jakarta June/July, August/September, December 14
Contacts Tourism Australia Tourism Australia s activities in Indonesia are managed from the Tourism Australia Kuala Lumpur office. Tourism Australia Suite 121 Faber Imperial Court Jalan Sultan Ismail 50250 Tel 60 3 2611 1148 Fax 60 3 2070 4302 State and Territory Tourism Organisations There are no STO offices based in Indonesia. Austrade Australian Embassy Level 3 JL H.R. Rasuna Said Kav C1516 Kuningan Jakarta 12940 Tel 62 21 2994 5411 Fax 62 21 2994 5401 For trade enquiries please contact Kelvin Yin (in Malaysia) Tel 60 3 2611 1136 kyin@tourism.australia.com 15