Tourism in Indonesia: pegipegi, a leading online booking platform discusses tourism

Interview with Ryan Kartawidjaja, Deputy CEO of pegipegi

What is a problem solving specialist?

Usually in a company you have two problems, internal and external, related to them.  In this start-up business, the company does have a lot of internal problems within our nine departments.  Mainly, it is about communication problems between all those departments, and information sharing.  My job is to collaborate with each and every department so they have the necessary information, so it is not really mixed up.  That is my main job that I do in here.

Tell me a little more about pegipegi. Why was pegipegi created?

At first, pegipegi was created to support in-region tourism.  On top of that, we also provide online booking systems for hotels.  Why?  Because we would like to make all Indonesian customers able to travel easier.  To also enhance their travel experience, pegipegi also provides additional products, such as flight and train tickets.  By providing all of those selections, we hope that Indonesian customers will be able to select their preferred hotels, their preferred flight, or even train, to travel all around Indonesia.

What additional services you offer?

As an additional service (and our customers can use it for free) we have a very attractive and complete travel blog we called as “Travel Tips”. We can be proud if our blog is the most updated and has a wide range of topics, comparing to our competitor’s.

We update the blog every day and provide all those information for traveling needs.

How competitive is this environment in Indonesia?

Indonesia travel environment is very very competitive. Obviously one saw a lot of competition in our side.  We are trying to make a one-stop travel solution for Indonesian customers by providing three different products:  hotels, flight tickets and also train.  In addition to that, we provide all those in our travel tips.  And what we are good at, is actually we focus, for now, only on Indonesian customers.  That is why we believe that we understand Indonesia better than our competitors.

When are you planning on focusing on international travellers coming to Indonesia?

For the next three years, we are going to focus only on Indonesia.  pegipegi has investors from Japan, Recruit Holdings, which owns the biggest OTA in Japan called jalan.net, and three different OTA in three different countries; one in Indonesia (which is considered to be one of SEA largest market), the second in Vietnam, and also in the Philippines. Possibly in the future, we would like to combine everything as one.

Are the plans of expansion only in Indonesia?

For now, each and every strategy that we have, we focus on Indonesia first for until the next three years.

What are your expectations for pegipegi in the next three years?

As any other companies, we aim to be the best in this field. But, to achieve that, we need the market to grow first. In this case, we are hoping that Indonesia’s tourism grow faster by the support of government’s program.

We believe that our government has tried their best to create amazing plan and strategies to make more people know about Indonesia by building up infrastructures. But we also knew that not 100% that strategies executed well. There’s still many programs here and there that not working as planned.

If the programs can be realized as planned, I believe it’s going to be a very big impact. Why? Because as we all know, Indonesia has a lot (by a lot, I mean A LOT) of different tourist destinations.  They are freaking beautiful but unfortunately is difficult to reach at the moment.
Should the airports, highway, ports, and any other infrastructures built, it will be easier for everyone to explore and enjoy it.

What does growth in the future look like?

We have looked at the data for international travellers on our airlines.  Back then when we checked data 2013-2014, and 2014-2015, the growth rate is not that high.  2013-2014, around four percent, 2014-2015, less than one percent.  Maybe it would not grow that much.  Maybe less than three percent, for now.

Most visitors can get a Visa on arrival.  When do you expect this growth to start happening?

We believe the growth will start happening two years from now because Building infrastructure is not easy, it takes time.

Where are the new travel areas that will attract infrastructure to be built?

The new travel destinations would be Eastern Indonesia because there are soooo many beautiful objects to explore there in the far east. And sadly, current development are mainly focusing in Java & Bali. Sumatra and Kalimantan are already well-known while the eastern such as Papua, Maluku? Not many know them. Some even confuse them as a part of other countries.

Because of lack of infrastructures, in these places (eastern Indonesia) anything are much more exensive compare to those in Java. Food, electricity, gasoline… anything!

And we appreciate our current government that starting to taking more care about eastern Indonesia’s development. We believe, if those facilities are built, more new travel destinations will be discovered, and economic growth of the local is increasing as well.

Is there social and economic impact the tourism sector can have in all these new potential destinations?

Of course it is. The improvement in tourism sectors always brings a domino effect for local’s growth, both in economic and social. In economic, we see that tourism growth also increase local’s empowerment, resulting in the rise of their income, etc.

In social, we see that there will be change in the culture, including the will of the locals to study about tourism, learning foreign languages, and any other skills that can make them better person, and a growing, wealthier society

Is Indonesia taking advantage of how safe the country is?

Yes, Indonesia is quite a safe country and tourists love to come because of this safety things. Although for several cities, I can say it is not that safe. When you are talking about Bali, of course it would be safe.  When you are talking about other cities, especially Jakarta, and which part of Jakarta we are talking about, some places are really dangerous.  We believe the government is working on it by increasing the police force. 

Do you focus on Indonesia travellers going to different countries in the region?

We trust the power of focus, and we believe that the Indonesian market is very large.  Why not focus on this first, and then we tackle other markets after we are number one?

We trust the power of focus, and we believe that the Indonesian market is very large. 

Travellers want to know what to visit and what activities are available.  Is that something you are working on?

Aside of that, currently we have a travel blog that probably the most active blog compared to our competitors. This travel blog contains not only recommended destination and activities which we updated daily

Do you see yourself as one of the top travel agents in Indonesia?

The travel industry is a big thing.  It’s true that conventional travel agent has already been in existence for a long time in Indonesia and win a quite a big share.

But  in the online travel agent, which is the new model of business, we believe pegipegi is one of the top agents.

Why Indonesia?  What makes it attractive?

The market is potentially large.  Indonesia has a lot of different tourism destinations.  By looking at these two points, why not Indonesia?

Who are the other players?

For domestic players, we are competing against Traveloka, and also Tiket.com.  We look at both of them as the strongest competitors for us, for now.  But we never forget about Agoda because they have already been in existence for seven, eight years as an international competitor.  Two of the strongest media groups, MNC Group and EMTEK Group, have started to establish new  online travel agents.

Is the market getting more competitive?

Yes, the market is getting more and very competitive as I mentioned before, currently more and more players are compete in this field, including 2 giant media groups.

But, pegipegi doesn’t think of them as competitors, but more as a partner to support Indonesia tourism.

What are some of the technical steps you take in order for pegipegi to be number one?

What pegipegi does is invest in people.   Also, we try to find more partners so we can collaborate with each other to give our customers a better promotion, and of course everyday we widen our hotel network to provide more choices to our customers. 
For boosting promotional benefit, we are partnering not only with online partners, but we also do a lot  with the offline ones.

Talk about the growth of the company.  What is your number of employees?

In terms of number of employees, last year the company had approximately 100 employees.  Right now, we have around 170 employees, so the company has been growing.  In terms of transactions, we have grown around 355 percent from 2014 to 2015, and we are looking for even better growth this year.

Do you feel there is market potential?

As we all know, the economic condition in Indonesia is not doing really well right now.  When we are looking at the travel business, we are talking about pleasure.  It seems a lot of people are stressed out, so they do travel more.  And instead of travelling internationally, they travel domestic, because the cost is cheaper and you actually can find good places in Indonesia.  Because of those reasons, yes I can say our business is doing really great because this potential market.

What is your market share?

For market shares, we never do any research.  But, of course we monitor our positioning to each of our vendors (hotel, flight and trains). For some vendors, we already be the best OTA, while on some we aren’t achieve yet.

Do you show that people still use traditional travel agents?

Yes, currently there still a lot of people using traditional travel agent as a result of trust issues (fear of fraud, not familiar with payment method, etc). This is also the reason why traditional, big player as Parnorama and Dwidaya are still existed till now, although the main focus is already different (they are focusing on tour package mostly)