Tour association to proceed with savings scheme

Tour association to proceed with savings scheme

JAKARTA (JP): The Association of Indonesian Tour and Travel
Agencies (Asita) sees no reason to suspend its Plan Save 5, a
scheme requiring its members to save five percentage points of
the nine percent commission they receive from airlines.

"If some agencies do not agree with the scheme, let's discuss
it at Asita's congress, which will open in Medan on Nov. 6," the
association's chairman, Sri Mulyono Herlambang, told a press
conference yesterday.

A number of agencies complained about the scheme to members of
the House of Representatives on Wednesday, which has led a sharp
increase in the funds they are required to provide as a guarantee
to the International Air Transport Association (IATA).

Starting this month, IATA requires each tour and travel agency
to provide guarantee funds of a minimum of US$15,000 or 120
percent of its average sales over 15 days. Previously, the
guarantee required was only 40 percent of average sales over 15
days. IATA and Asita agreed last month that the agencies'
deposits under the Plan Save 5 scheme may be used to pay the
guarantee.

Members of the Golkar faction of Commission V of the House who
met with the travel executives on Wednesday promised to discuss
the problem with related parties and said they would urge the
government to suspend Plan Save 5 because, as reported by the
executives, the new rate of the guarantee funds will hamper the
operations of smaller agencies.

Herlambang said yesterday that Asita groups 1,600 agencies,
231 of which are members of IATA.

"Only 27 of Asita's members are opposed to Plan Save 5. I
don't know why they don't agree because the scheme is quite
proper for better business. Maybe certain parties want --
politically -- to see Asita in a mess and failing to carry out
its mission to help improve the tourist industry," he said.

Plan Save 5 was introduced in November 1993 with the aim of
preventing price wars between agencies. The five percentage
points of the commissions must be deposited with the state-owned
Bank Bumi Daya, which offers an annual interest of seven percent
on the money. After two years, 50 percent of the interest on the
deposits is paid to the Indonesian Tourism Promotion Board for
the promotion of Indonesia's tourist industry abroad, while the
other 50 percent may be withdrawn by the depositors.

Yesterday's press conference was also attended by officials
from the Ministry of Tourism, Post and Telecommunications and the
Ministry of Transportation.

Effects

The Directorate General of Tourism's Director for Travel
Agents Azhari Abdullah said that the government was in agreement
with the savings scheme which, he said, offers several multiplier
effects for the development of Indonesia's tourist industry.

Separately yesterday, Minister of Tourism, Post and
Telecommunications Joop Ave declined to comment on the matter,
saying the parties concerned would have to reach a consensus
among themselves.

Meanwhile, IATA's manager for agency service, billing and
settlement plans in Indonesia, Djuarsa Joedadibrata, said that
the 120 percent financial guarantee was significantly lower than
those in other countries in Asia.

"For instance, the rate is 200 percent in Thailand, Malaysia
and Cambodia, 150 percent in Taiwan and 300 percent in South
Korea," he said.

He said that IATA groups 231 international airlines, some 40
of which serve Indonesia.

Djuarsa said that IATA had raised the financial guarantees in
Indonesia because many airlines had to face higher risks of
delayed payments.

"At this stage about 20 percent of payments are delayed," he
said, adding that in Indonesia total outbound tickets came to
about $500 million per year.

According to Djuarsa, the decision on the guarantee fund
increase was made by a committee called the National Executive
Council which groups 15 parties including 13 airlines, Asita and
IATA. (icn)