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Indonesia's government earmarks US$21.5 million to lift tourism businesses

Indonesia’s government earmarks US$21.5 million to lift tourism businesses

The Indonesia government has rolled out a range of incentives aimed at airlines, tour operators and tourist areas to combat the tourism slump.

Indonesia’s minister of finance Sri Mulyani Indrawati yesterday announced that the government has set aside a budget of 298.5 billion rupiah (US$21.5 million) to help stabilise Indonesia’s economy and pull tourism businesses through the economic slowdown.

Indonesia’s government rolls out incentives to boost tourism during the Covid-19 outbreak; tourists at terraced rice fields in Bali, Indonesia pictured

Incentives for airlines and tour operators, valued at 98.5 billion rupiah, aim to encourage special discounts for foreign tourists.

Some 103 billion rupiah has been allotted for promotional activities, 25 billion rupiah will go towards improving tourist areas, and another 72 billion rupiah will be invested on influencers.

Additionally, to spur domestic tourism, the government will grant 443 billion rupiah to airlines, in the form of a 30 per cent discount for 25 per cent of the total available seats per flight to 10 tourist destinations such as Yogyakarta, Manado, Bali, Mandalika, Labuan Bajo, Bangka Belitung, and Batam.

Transportation minister Budi Karya Sumadi d that the government will inject additional incentives of up to 50 per cent for flight tickets to 10 tourist destinations.

Total support directed at airlines, including aviation fuel discounts and reduced Aircraft Passenger Services fees, valued at an estimated 860 billion rupiah, will be funded by the Ministry of Transportation, Angkasa Pura Airport Authorities and AirNav.

Furthermore, the central government will provide grants of 3.3 trillion rupiah to 33 district and city governments in the ten tourist destinations in return for waiving hotel and restaurant taxes for the next six months, said Sri Mulyani.

While industry players TTG Asia spoke to said the incentive schemes will help lift the tourism industry, some suggested that more could be done.

Adjie Wahjono, operations manager of Aneka Kartika Tours, said the financial aids to reduce airfares will only benefit travellers and the airlines, and not the DMCs and travel companies which are just as affected by the outbreak.

Budijanto Ardijansyah, vice chairman of the Association of Indonesian Tours and Travel Agencies, sought clarity on the technical distribution of the subsidies, such as if the benefits were the same for LCCs and full-service carriers, and the type of travel companies that can qualify for incentives.

Adjie suggested that a real help for the tourism industry would be tax relief for DMCs and travel companies.

Donny D, founder of Adonta Global Trip, would like the government to organise tourism exhibitions to promote the main destinations in Indonesia, such as Jakarta, Banten, West Java, and East Java, and provide subsidies to allow for cheaper entrance fees, free highway tickets for tour buses, and support schemes for tour guides.

Such efforts, Donny said, would complement the attractive weekend getaway packages created by local travel companies and sold at the recent ASTINDO Travel Fair.

“After the agent creates the package, the government provides subsidies to lower prices. Everyone is happy. Agents get a bigger profit margin, travellers can enjoy cheaper tour packages, and the airlines (get their planes filled),” he said.