Travel Agencies Cut Jobs as Coronavirus Weighs on Businesses

TEMPO.CO, Jakarta - The cancellation of flights and hotel reservations due to the spread of the coronavirus is hitting the travel agency business hard. Some travel agents even have to cut jobs to reduce costs.

Pauline Suharno, secretary-general of the Indonesian Travel Agents Association (Astindo), said the coronavirus situation had dampened people's desire to travel, causing businesses to slow over unsold or returned tickets and tour packages.

Pauline said that a number of employers had to reduce the number of its employees. "We are surveying the numbers because the decision was only made on March 1," she told Tempo on Thursday, March 5.

The situation has led to a drastic decline in income throughout January and February. This week alone, Astindo noted group tour cancellations by several companies, with more than 3,000 participants.

Pauline said entrepreneurs need the government's help to stay afloat. Incentives in the form of tax cuts, loan rates reductions, as well as lowered electricity tariffs are urgent, she argued, citing similar policies implemented in neighboring countries affected by the Wuhan virus such as Singapore, Malaysia, and Hong Kong.

These incentives are seen as more effective than marketing assistance—as planned by the government. She said that promotions will not work amid travelers' fear of catching the virus.

"Our members still have to pay for operational costs such as office rent, bank loan interest, salaries, taxes, electricity bills, telephone bills, and others," she said.

To date, Astindo has around 7,000 registered members.

The Indonesian Travel Companies Association (Asita) deputy Budijanto Ardiansjah shares Pauline's sentiments. The decline in tourist visits due to the coronavirus outbreak made Asita members reduce business activity, with "some beginning to cut down on working hours and sending workers on unpaid leaves." 

He hopes that the government will not only provide incentives to the 10 major tourist destinations. The impact of the coronavirus, he said, has reached all provinces.

He also hopes that incentives can be given for at least six months, including during low seasons.

GANGSAR PARIKESIT | CAESAR AKBAR | VINDRY FLORENTIN