Indonesia’s rising tourism business has new players, including the Indonesia Tourism Exchange, or ITX, which provides a platform for tourism operators to market their products online. GlobeAsia sat down with ITX’s general manager for marketing Syafrul Hidayat.
By Eko Prasetyo
Boasting a live inventory in various regions in Indonesia, members of Indonesia Tourism Exchange (ITX) can market their products in line with the amenities, accessibility and attractions - 3A – formula of the Ministry of Tourism.
With the goal of supporting tourism industry players to go digital, ITX has ambitions to increase its customer experience comprehensively and cost-effectively.
Based in Serpong, Tangerang, ITX measures its success in supporting tourism by conducting acquisitions of tourism products to be connected digitally to distributors for a global market outlook; converting the “look,” or digital viewing, into bookings and payments to create a conversion rate from marketing to sales.
ITX’s general manager for marketing Syafrul Hidayat explains that the early objective is to create visitor traffic through the distributor’s website, so that the supplier can experience the direct benefits with an over 50% rate of conversion.
Since the start of 2017, ITX has included a variety of products under its banner, from accommodation, ticketing and tourism events to creating a positive impact with increased quality of services and products. It has also played an advisory role for some suppliers with marketing and product development.
Hidayat noted that Indonesia has more tourism attractions — or content — than any other region in the world, despite not being as digitally advanced as neighboring countries like Malaysia, Thailand and Vietnam, where based on the number of overseas visitors, their numbers are way above those of Indonesia.
Generating traffic and growth
The main question, according to Hidayat, is how to generated traffic and the origins of the traffic. “Essentially, we are talking about connectivity, meaning the ease of access to Indonesia’s tourism products from all available access points from across the globe,” he said.
“The point is how to collect the inventory of Indonesia’s tourism products into one big data set, as well as categorizing the products within each respective type. This includes accommodation —chain hotels, individual hotels, villas, resorts and others — up to transportation modes like car rentals,” he said.
ITX aims to unite all of these elements, as supplier and distributor, into an ecosystem with the sole purpose of strengthening the content itself. In addition, Hidayat added, it would also create manageable accessibility for prospective customers. “This means a hotel will be able to individually connect to various online travel agents, but they can manage (the bookings) in our channel manager,” he said.
As a digital B-to-B company, ITX has recorded more than 15,000 suppliers across the archipelago as well as over 150 distributors listed within the platform including Agoda, Booking.com, Expedia, Ctrip.com from China as well as Indonesia.travel. The ongoing effort is to approach Traveloka, tiket.com and others.
“ITX will be in the middle as a hub to provide access for both parties,” said Hidayat. “Since we started in the first quarter of 2016, we aimed to provide the channel manager, meaning the system. We have two basic systems in the e-commerce world: the booking and payment system. ITX, in default, has both in its platform, but the industry has the flexibility and options since we cannot force them to use only our platform if they have more varied methods.”
In terms of growth, ITX has listed 20% of the total number of suppliers in all sectors in Indonesia. As a comparison, this number is still below the Ministry of Tourism’s target of having an additional 20,000 homestays in Indonesia by 2019.
“We are actually following the nature of e-commerce business, which is not seeking profits or operational revenues, while focusing on how this connectivity will create traffic — meaning the distributor will be able to invite the market to use the products provided by these suppliers,” he added. With only a year of live operation, Hidayat said he was unable to disclose any numbers that reflect growth. However, he said this type of ecosystem is only available in two global regions: Australia and Indonesia. “In Australia, there is Tourism Exchange Australia, and we set them as our benchmark. So, we are unable to create any benchmarks yet in Indonesia.”
However, looking at the exponential growth of digital business, ITX expects to see greater growth in 2018. Digital business is also growing rapidly, based on high public demand for technology. The means to digitizing the tourism industry have been achieved, among others, by a partnership between the Ministry of Tourism and state-owned telcom giant PT Telkom, as the market leader in information technology.
ITX, as a product, originated from an idea of the Ministry of Tourism, which has provided access and connectivity to mobilize tourism industry players. Meanwhile, Telkom plays a role as provider for the IT applications needed in creating a digital solution for the tourism industry in the country.
“Telkom Sigma is the leading IT solution company under Telkom, so Sigma was trusted to run the platform, system and operations,” Hidayat said, adding that ITX itself is a subsidiary of Telkom, under a partnership with the Tourism Ministry.
“We are creating a display window to promote Indonesia’s tourism sector, while also seeking distributors to drive traffic from India, Japan and other regions into Indonesia.”
Additional platforms and socializations
To educate the public, ITX has conducted workshops and roadshows as part of its acquisition phase, aligned with schedules from the Ministry of Tourism. “We usually spend a day or two at a destination for a roadshow on digitizing tourism, targeting the tourism industry in that region — including hotels, tourism spots or homestays,” Hidayat said.
More than 70% of ITX’s acquisitions are gained as part of the ministry’s program. “We also have direct acquisitions, such as approaching the suppliers or distributors personally under our flag. They can also register online through our website,” adds Hidayat.
The next five to ten years should bring great opportunity. “We can gather users from across the globe, while our domestic products will also be known widely,” he said, adding that trust is also the currency of trade since people would not purchase or plan a trip with an unknown or untrusted source.
ITX has partnered with several companies, such as Klikstay, to develop a booking system for small hotels and homestays. This is to tackle the challenges of reaching out to remote areas, with the integrated property management system (PMS) and booking system maximizing the back office and reservation management of a hotel or homestay.
ITX is also developing QR code verification for several tourism attractions and events, to ease the check-in process at the location.