On Line and Over Here

(11/25/2012)

The Bali chapter of the Indonesian Tour and Travel Agent Association (ASITA-Bali) is raising the alarm on the increasing number of illegal online travel agents operating in Indonesia.

“We ask the government to enforce the rules and issue warnings to illegal on-line travel agents,” said ASITA-Bali's  vice-chairman for marketing, public relations, research and development, Bagus Sudibya on Tuesday, November 20, 2012.

As reported by Bisnis Bali, Sudibya warned that the presence of illegal on-line travel agents (OTA) also means taxes are being under collected on sales generated from these sources. Continuing his line of questioning, Subidbya asked what contribution is made to Bali by OTAs with offices located outside of Bali?

Subdibya said ASITA would ask the government and the House of Representatives to find a concrete solution to this problem.

Claiming to losses caused by OTAs on Bali parties was large, Sudibya, at the same time, admitted that online booking of travel was an inescapable part of the current business landscape, with 20-30 percent of all travel business generated online. “At this time, legal travel agents derive 50% of their business from online sources. We encourage travel agents to introduce online systems to keep up with the competition,” said Sudibya.

The secretary of ASITA-Bali, Eddy Putra, says the presence of OTAs in the marketplace is diminishing the market share of Bali travel agents, saying, “In addition to taking a share of the tourists, the online travel agents do not provide a benefit that can be enjoyed by the people of Bali.”

Putra said the subject OTAs do not maintain offices or do business in Indonesia, suggesting that online travel operators should be legally established in Indonesia to ensure a local value accrues from each travel transaction.

Tommy Sutrisno, also a director of ASITA, said he felt that many OTAs did not have the required operating licenses, a fact made difficult to prove by their lack of an office in Bali. “It is for certain that their activities cause a loss of market share, seen by the many bookings they (OTAs) make in the region,” he said.

It remain unclear, however, what law, if any, is being broken when a foreign OTA makes a booking for one of their clients with a Bali Hotel.