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Tourism Promotion Board for the promotion of Indonesia's tourist industry abroad, while the other 50 percent may be withdrawn by the depositors.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)