INDONESIA

MARKET PROFILE Market overview

Over $1bn

In 2015, Indonesia was Australia’s 12th largest inbound market for visitor arrivals, 15th largest market for total visitor spend and 18th for visitor nights.

Potential to be worth by 2020

Key importance factors for holiday destination choice1

152,000

Safety and security 55%

Visitor arrivals3 (á 1 per cent)

Value for money 43% World class nature 38% Welcoming people 35% Family friendly 31%

Aviation routes from Indonesia to Australia2 Jakarta

Holidayפ

Visiting friends & relativesפ

49%

20%

Businessפ

Educationפ

9%

10%

Denpasar

Darwin Cairns Townsville

Port Hedland

Brisbane Perth Adelaide

$0.6bn

Sydney Melbourne

Total spend4 (á 4 per cent)

Which airlines3 do Indonesian visitors use to travel to Australia? Airline

2011

2012

2013

2014

2015

Garuda Indonesia

42%

44%

41%

40%

40%

Singapore Airlines

18%

14%

15%

14%

15%

Qantas Airways

17%

15%

15%

14%

13%

Air Asia X

8%

10%

12%

10%

8%

Jetstar

6%

8%

6%

5%

6%

Malaysia Airlines

3%

2%

3%

3%

2%

Virgin Australia

1%

2%

2%

2%

2%

Others

5%

6%

7%

11%

12%

34

*4

Average nights stayed◊

10

**4

Median nights stayed◊

May-Aug and Dec Booking peak period

Lebaran and Dec Travel peak period

Purchase funnel1 In Indonesia, Australia is ranked #5 for aspiration, behind Japan and Hawaii. Australia sits at #4 for awareness of experiences and ranks #2 with respect to intention. Australia’s ranking falls to #6 on a visitation basis, despite the country’s proximity. Japan is the clear leader for aspiration, awareness and intention, but #5 for visitation where China and Hong Kong are clear leaders.

5TH 4TH 2ND 6TH

ASPIRATION

AWARENESS

INTENTION

VISITATION

Notes:*Average nights: the sum of all nights divided by the sum of all visitors. **Median nights: represents the midpoint length of stay for which 50% of visitors stay less and 50% stay longer. ◊Data refers to an average of 2011-2015. §Refers to share of arrivals of respective purpose. Sources:1.Tourism Australia, Consumer Demand Project, 2015. 2.Department of Infrastructure and Regional Development, December 2015. 3.Department of Immigration and Border Protection, December 2015. 4.Tourism Research Australia, International Visitor Survey, December 2015.

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INDONESIA Market Profile 2016

INDONESIA

MARKET PERFORMANCE »» The charts on this page provide a trend overview of visitor arrivals and spend over the last 10 years by main purpose of visit, by first time and repeat leisureΔ visitors and also a snapshot of age demographic split of leisure visitors and spend.

Visitor spend2

0.3

90 Holiday

Jun-15

Dec-15

Jun-14

Dec-14

Jun-13

Jun-12

Dec-13 Dec-15

Jun-15

Dec-14

Jun-14

Jun-13

Dec-13

Jun-12

Dec-12

Year ending

Year ending

First and repeat leisure visitor arrivals2

First and repeat leisure visitor spend2 300

70 Return visit

60 50 40

First visit

30 20

Total trip spend (A$000s)

80

250 Return visit 200 150 First visit

100

Leisure arrivals by age2† 15 – 29 yrs 23%

15 – 29 yrs 17% 45 – 59 yrs 46%

30 – 44 yrs 31%

30 – 44 yrs 26%

Notes: Δ Leisure refers to main purpose of visit of holiday and visiting friends and relatives. † Age profile data refers to an average of 2011-2015. Sources: 1. Department of Immigration and Border Protection, December 2015. 2. Tourism Research Australia, International Visitor Survey, December 2015.

Jun-15

Dec-15

Jun-14

Dec-14

Dec-13

Leisure spend by age2† 60 yrs & over 11%

45 –59 yrs 33%

INDONESIA Market Profile 2016

Jun-13

Jun-12

Dec-12

Dec-11

Jun-11

Year ending

Year ending

60 yrs & over 13%

Dec-10

Jun-10

Jun-09

Dec-09

Jun-08

Dec-08

Dec-07

Dec-15

Jun-15

Dec-14

Jun-14

Jun-13

Dec-13

Jun-12

Dec-12

Jun-11

Dec-11

Dec-10

Jun-10

Dec-09

Jun-09

Dec-08

Jun-08

Dec-07

Jun-07

Dec-06

0

Jun-07

50

10

Dec-06

Visitor arrivals (000s)

Jun-11

Dec-15

Jun-15

Dec-14

Jun-14

Jun-13

Dec-13

Jun-12

Dec-12

Jun-11

Dec-11

Jun-10

Dec-10

Dec-09

Jun-09

Dec-08

Jun-08

Dec-07

Jun-07

0

Dec-11

Other

Other Dec-06

Employment

50

Dec-10

Employment

10

Business

100

Jun-10

20

Visiting friends or relatives

Jun-09

Business

30

150

Dec-09

Education

40

Jun-08

50

Holiday

Dec-08

Visiting friends or relatives

Education

200

Dec-07

60

250

Jun-07

70

Total trip spend (A$000s)

Visitor arrivals (000s)

80

2

Dec-12

Visitor spend by main purpose of visit2

Dec-06

Visitor arrivals by main purpose of visit1

0

Jun-11

Year ending

Year ending

0

Dec-11

Dec-06

Jun-15

Dec-15

Jun-14

Dec-14

Jun-13

Dec-13

Jun-12

Dec-12

Jun-11

Dec-11

Jun-10

Dec-10

Jun-09

Dec-09

Jun-08

Dec-08

Jun-07

0.0 Dec-07

0.1

0

Jun-10

0.2

20

Dec-10

40

0.4

Jun-09

60

0.5

Dec-09

80

Jun-08

100

0.6

Dec-08

120

$0.6bn

0.7 Total trip spend ($bn)

140

Dec-06

Visitor arrivals (000s)

0.8

152,000

160

Jun-07

180

Dec-07

Visitor arrivals1

INDONESIA

MARKET PERFORMANCE »» The following˚table provides a summary of arrivals, spend and the proportion of repeat visitors to Australia by main purpose of visit: holiday, visiting friends and relatives, business and education. HOLIDAY

VISITING FRIENDS AND RELATIVES

BUSINESS

EDUCATION

70,000 (49%§)

28,700 (20%§)

13,500 (9%§)

14,900 (10%§)

$2,859

$3,672

$3,251

$17,104

Spend per night

$176

$159

$295

$127

Repeat visitors

66%

87%

70%

82%

Average nights stayed2

16

23

11

134

Median nights stayed

8

12

6

120

Arrivals

1

Spend per trip2 2

2

2

»» The following provides an overview of top 9 regions visited by leisure visitors*

Top 9 regions visited by leisure visitors◊*2 Sydney 44% Melbourne 38% Perth 21% Gold Coast 9% Brisbane 8% Canberra 3% Adelaide 2% Australia’s South West, Western Australia 2% Darwin 1%

Notes: o Data refers to an average of 2011-2015. § Refers to share of arrivals of respective purpose of visit. ◊Top 10 regions visited data refers to an average of 2011-2015. Percentages will not add to 100% as one person can visit multiple regions. The data refers to visitors who spent at least one night in the region. * Leisure refers to main purpose of visit of holiday and visiting friends and relatives. Sources: 1. Department of Immigration and Border Protection, December 2015. 2. Tourism Research Australia, International Visitor Survey, December 2015..

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INDONESIA Market Profile 2016

INDONESIA

AVIATION LANDSCAPE »» Around 40 per cent of Indonesian visitors to Australia travelled on Garuda Indonesia, with Singapore Airlines being the next most utilised airline (15 per cent), followed by Qantas (13 per cent) and Indonesia AirAsia (8 per cent) (see table on page 1).

five per cent. This boosted average load factors which increased six percentage points to 76 per cent in 2015. »» However, a number of existing carriers and new entrants (e.g. Lion Air, Batik Air) are awaiting significant aircraft orders and are expected to add substantial capacity in subsequent years. Lion Air is expecting 45 deliveries in 2016. Both Lion Air and its long haul subsidiary Batik Air are looking to fly to Australia.

»» After a strong uplift (21 per cent) in direct capacity from Indonesia to Australia in 2014, growth has moderated in 2015 with a decline of

Direct aviation capacity from Indonesia to Australia1 600 Jetstar

Seats per year (000s)

500

Garuda Indonesia

400

Virgin Australia Indonesia AirAsia

300

Indonesia AirAsia Extra Qantas Airways

200

Strategic Airlines

100

Year ending

Sources: 1. Department of Infrastructure and Regional Development, Aviation Statistics, December 2015.

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INDONESIA Market Profile 2016

Dec-15

Jun-15

Jun-14

Dec-14

Jun-13

Dec-13

Jun-12

Dec-12

Dec-11

Jun-11

Jun-10

Dec-10

Jun-09

Dec-09

Dec-08

Jun-08

Jun-07

Dec-07

Dec-06

Other airlines 0

»» The ASEAN single market agreement, which is expected to fully liberalise air travel between member states in the ASEAN region, has been an ongoing negotiation. However, there are hopes it could be finalised in the near future. Once the agreement is ratified by all members, demand is expected to be diverted away from Australia in the short term as intraAsian travel is stimulated.

INDONESIA

AVIATION LANDSCAPE Weekly services to Australia2 Operating Airlines Garuda Indonesia

Jetstar

Virgin Australia

Indonesia AirAsia Indonesia AirAsia X Qantas Tigerair Australia

Flights per week Route

Alliance/ code share partner (on route)

7

Bali – Melbourne

Etihad

7

Bali – Sydney

Etihad, KLM

7

Bali – Perth

Etihad

4

Jakarta – Melbourne

Etihad, KLM

4

Jakarta – Perth

Etihad, KLM

4

Jakarta – Sydney

Etihad, KLM

7

Bali – Adelaide

Qantas

5

Bali – Brisbane

3

Bali – Cairns

4

Bali – Darwin

10

Bali – Melbourne

12

Bali – Perth

7

Singapore – Bali – Perth

3

Bali – Townsville

7

Bali – Sydney

5

Bali – Adelaide

10

Bali – Brisbane

7

Bali – Melbourne

8

Bali – Perth

9

Bali-Sydney

1

Bali – Port Hedland

4

Bali – Darwin

28

Bali – Perth

7

Bali – Melbourne

7

Bali – Sydney

4

Bali – Sydney

4

Jakarta – Sydney

5

Bali – Adelaide

7

Bali – Melbourne

7

Bali – Perth

Delta

Delta

Jetstar

Sources: 2. Department of Infrastructure and Regional Development, International Airlines Timetable Summary (Northern Winter), 2015-2016.

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INDONESIA Market Profile 2016

INDONESIA

PLANNING AND BOOKING INFORMATION SOURCES »» The following charts highlight the information sources that Indonesian consumers use to plan and book their holidays.

Preferred sources for early planning and inspiration Friends or relatives who have been or live there 35% General internet searching 32% Tour operator 30% Online and social media photos and blogs 27% Any other travel website 25% Brochures 24% An advertised deal or package 23% Travel or guide books 22% Online travellers’ opinions and reviews 21% Airline 20%

Preferred sources for seeking information about Australia specifically Friends or relatives who have been before or live there 42% Tour operator 38% General internet searching 35% Online and social media photos and blogs 32% Brochures 30% Travel or guide books 29% Any other travel website 28% An advertised deal or package 26% Online travel agent 26% Accommodation/activity/experience provider website 25%

Preferred sources used to book a holiday to Australia Travel agent (telephone or in person) 43% Travel agent (online) 37% Tour operator (telephone or in person) 32% Tour operator (online) 25% Directly through airline (online) 24% Directly through airline (telephone or in person) 20% Accommodation provider (online) 20% Other travel booking website 16% Accommodation provider (telephone or in person) 16% Other online source 10%

Source: Tourism Australia, Consumer Demand Project, 2015

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INDONESIA Market Profile 2016

INDONESIA DISTRIBUTION

»» Whilst there are a number of channels available to Indonesian consumers for planning and booking travel, most consumers book through traditional retail travel agencies. The internet is primarily used as a research tool, with many Indonesian travelers not yet comfortable with booking online. The Free and Independent Travel (FIT) segment is also growing in the Indonesian market.

Distribution system Wholesalers/ Large Agencies

Commission Level: Wholesalers will usually offer a net rate to agents »» 12 active wholesalers have developed their own packages to promote Australia and promote them through their own retail chains throughout Indonesia. »» Key wholesalers include: Avia Tour, Bayu Buana Travel, Celindo Tour, Dwidaya Tour, Golden Rama Express, Monas Tour, Panen Tour, Panorama Tour, Australia Centre, Smailing Tour, Wita Tour, and Antavaya Tour. »» The travel trade in Indonesia continues to operate under the traditional retail system, although the larger retail agents often take on the role of wholesalers. These retail agents market their own programs with links to inbound tour operators (ITOs), on-selling to smaller agencies.

Retail Agents

Commission Level: 10% to 15% »» Most retail agencies handle both leisure and business events in a highly competitive market. However, there are a few agencies that solely concentrate on incentive business

Aussie Specialists

»» The Aussie Specialist Program (ASP) is the primary platform for Tourism Australia to train and develop front line travel sellers to best sell Australia. »» As at April 2016, there were 68 qualified Aussie Specialist agents in Indonesia.

Online

»» Anecdotally, a large percentage of the Free and Independent Travel segment use the internet to search for information on holiday destinations. However, the majority of consumers book through travel agents. »» Credit card penetration is increasing as banks become more aggressive in capturing market share. Whilst credit card penetration is increasing, the current trend is for low credit limits, limiting the ability to pay for a whole trip. »» Likewise, the internet is primarily used by travel agencies as a source of information and communication, not for making bookings. Agents generally prefer to make reservations via traditional computer reservation systems, wholesalers and ITOs. »» Recently, airlines have increased their emphasis on internet bookings.

Inbound Tour Operators

Commission Level: ITOs will usually offer a net rate to agents »» ITOs are still responsible for the vast majority of group holiday business into Australia, including incentive bookings from agents.

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INDONESIA Market Profile 2016

INDONESIA DISTRIBUTION Trends

Planning a visit to market

Planning and purchasing travel »» Most consumers book through traditional retail travel agencies. The internet is primarily used as a research tool, while consumers generally purchase through travel agents, as they seek assurance that someone will take responsibility for their purchase should there be any issues.

Top tips for sales calls »» Avoid sales calls in the peak seasons (June – July school holiday season, Lebaran and Christmas holidays) and during consumer travel fair (March – April, September – October). The best time for sales calls is January to early March and end of October to November.

»» Indonesians are increasingly booking tickets during consumer travel fairs to take advantage of favourable promotional fair and other benefits from the Bank (cash back, double points rewards, Shopping voucher, Souvenirs). This is leading to a climate where consumers are waiting to purchase tickets at these fairs to avoid missing out on discounts/promotions.

»» Trust and relationship management is important in the Indonesian market as it helps to build loyalty.

»» There is a shift towards Free Independent and Travel (FIT), with many consumers still choosing to book flights through agents, but making fewer bookings for accommodation prior to departure. »» Groups tend to travel during peak season when the major holidays such as school holidays, Lebaran and Christmas occur. The lead time is three to four weeks prior to the peak season. FITs travel more during the off peak months and have a shorter lead time than group travellers. »» There are two consumer segments in Indonesia. One segment is price driven and more inclined to switch travel agents to get a better deal. The other consists of affluent consumers who stay loyal to travel agencies who provide a customised service. »» Jakarta is the main source market for Australia. The city has the highest concentration of people able to afford travel, as well as the best connectivity with both non-stop services and direct services to Australia. »» Surabaya is the second largest target market for Tourism Australia. Whilst the market is still more likely to use traditional distribution channels, there is a segment of experiences tgravellers with higher incomes that are ideal targets for Australia.

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INDONESIA Market Profile 2016

»» The key cities for sales calls are Jakarta and Surabaya. In Jakarta make realistic plans for travelling around given heavy traffic is common. »» Plan and combine visits that are in the same geographical area within the city so you can maximise the number of sales calls and minimise commuting times. »» For more general information on sales calls and planning a visit to market, please see Tourism Australia’s Planning for Inbound Success ebook at www.tourism.australia.com/ inboundsuccess

INDONESIA DISTRIBUTION

Key trade and consumer events Event

Location

Date

Consumer Travel Fairs

Jakarta & Surabaya, Indonesia,

September-October 2016

Corroboree Asia

Perth, Australia

4-9 September 2016

Australian Tourism Exchange (ATE) Sydney, Australia

14-18 May 2017

Where to find more information Tourism Australia’s activities in Indonesia are managed from its Singapore office. For more information, visit Tourism Australia’s corporate website at www.tourism.australia.com. Australian State and Territory Tourism Organisations operating in Indonesia include: Tourism & Events Queensland and Tourism Western Australia. Also see: Indonesia Country Brief published by the Department of Foreign Affairs and Trade at: www.dfat.gov.au/geo For the latest arrivals statistics, visit: www.tourism.australia.com/arrivals For additional statistical reports refer to theAustralian Bureau of Statistics (ABS) and Tourism Research Australia (TRA) websites: www.abs.gov.au and www.tra.gov.au

Contact Level 29, 420 George Street Sydney, NSW, 2000 Telephone: +61 2 9360 1111 Email: [email protected] Corporate: tourism.australia.com | twitter.com/TourismAus Consumer: australia.com | twitter.com/Australia | facebook.com/SeeAustralia

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INDONESIA Market Profile 2016