Tourism Industry Rejects Discourse on Quoting Tourism Funds on Flight Tickets

The Minister of Tourism and Creative Economy (Menparekraf), Sandiaga Uno, confirmed the coordination meeting to discuss the plan for sustainable tourism funding. The meeting is planned to be held by the Coordinating Ministry for Maritime Affairs and Investment on Wednesday (24/4/2024).

"Don't worry, this plan will not burden the community with higher ticket prices. This is still under review and of course, we are aware of input from the community that ticket prices are still high, so we will not add to the burden," said Sandi in a weekly press conference in Jakarta, on Monday (22/4/2204).

We are currently exploring several options to collect or gather tourism funds. As of now, there has been no decision regarding the plan, including the considerations and amount of contributions. We hope for everyone's patience.

Sandi guarantees transparency in the collection of tourism fees, if implemented. Mandatory reports will be carried out as a form of supervision.

"We must ensure that airplane tickets are not too burdensome because compared to international tickets, domestic tickets are quite burdensome," he said.

Also read: Will Airplane Ticket Prices Be Affordable Again?

The tourism fee through airplane tickets is considered a risky move as it may decrease the public's interest to travel by air. Various parties, including the public, will blame the airlines for this tariff hike.

"Later ticket prices will rise again, we will be the ones to blame. Yes, fewer (people) want to fly. "Passengers should not be burdened with anything else," said the Director of Utama PT Garuda Indonesia Tbk, Irfan Everyson.

If this decision is to be implemented, Irfan believes that separate charges can be collected, outside of the airline ticket. However, he did not specify what form it would take.

The general chairman of the Indonesian Tourism Industry Association (GIPI), Hariyadi Sukamdani, also expressed his objection. He reminded that implementing levies must be done carefully.

Taking a cue from hotel and restaurant taxes, as well as tourism taxes, revenue flows into the pockets of local governments. In reality, the funds returned for tourism purposes are very minimal. Until this discourse surfaced publicly, those in the tourism industry have not been invited to participate in discussions.

“The remaining money is used for the regional budget. That's within the scope of what's already happening. "It should be for promotions, etc., it doesn't come back (for tourism)," said Hariyadi, who is also chairman of the Indonesian Hotel and Restaurant Association.

Also read: Expensive Airplane Tickets Become a Global Complaint

Similar views were expressed by the Chairman of the Indonesian Flight Service Users Association (APJAPI), Alvin Lie, who opposed the plan to impose aircraft fees through airline tickets. He questioned why only air transportation is subject to this fee, while other modes of transportation are not.

"The plan to collect tourism fees is worth questioning, why is it imposed on airplane tickets? Are all airplane passengers tourists? Why only air transportation? People who fly have different needs," said Alvin.

If this continues to be implemented without proper planning, the community may switch to other modes of transportation. The cost paid by consumers to buy tickets will be higher.

Currently, the condition of airlines has not fully recovered. Firstly, the maximum tariffs have not been revised by the Ministry of Transportation since 2019, which should be adjusted according to other components of costs.

Secondly, the exchange rate has reached Rp 16,224 per US dollar as of Monday (22/4/2024). The price of oil is also expected to be high. Especially if tensions in the Middle East escalate.

"This is equivalent to killing our air transportation industry because the public thinks that the price of the ticket is what they are paying for, even though the money does not go to the airline. This is very unfair," said Alvin, who is also an aviation expert.

Based on APJAPI's research, the biggest reason for airline passengers is not for tourism. The majority of respondents take flights for business or work meetings (29.7 percent).

The reasons for this are followed by personal needs (18.6%), returning from activities (12.9%), and visiting family or attending weddings (12.3%). Only the remaining 12.1% of respondents use airplanes for tourism.

The Association conducted research in January 2024 on 7,414 boarding pass holder respondents. The method used was stratified random sampling at five international airports.

The five airports in question include Soekarno-Hatta Airport (Banten), Juanda Airport (East Java), I Gusti Ngurah Rai Airport (Bali), Kualanamu Airport (North Sumatra), and Sultan Hasanuddin Airport (South Sulawesi).

Also read: Market Mechanism, Options to Press Airfares

Alvin continued, the International Air Transport Association (IATA) regulates that ticket prices cannot be charged for anything other than the agreed components. The components in question are value-added tax, air passenger service charges (PJP2U), and mandatory insurance.

There is also an additional component, namely an additional surcharge as compensation for fuel costs. "Don't charge for tickets because the impact is as if ticket prices have increased. Even though the ones that went up were the ones that were tucked in. "Later the airlines will be burdened again, even though the money doesn't go to the airlines," said Alvin.

He also questions the transparency of the tourism contribution fund that has been collected, from the perspective of the supervisory party and how they monitor and use the funds. Because the fund is used from and for the community, therefore they must be able to oversee where the contribution is directed.

Taking a lesson from zakat funds, there is an organization responsible for them, namely the National Zakat Amil Agency. This agency is responsible for managing and overseeing the collected and distributed zakat. The concept of tourism fees should also be designed similarly with clear accountability.

Also read: This is the Difference between a Tourist Visit Visa and a "Visa on Arrival"

Hariyadi also emphasizes the importance of using and monitoring tourism fees through airplane tickets. Discussion of tourism fees should be comprehensively discussed, including legal framework and policy basis. If this plan is not properly matured, there is a risk of misuse of funds.

"What is the mechanism? Who has control? This could be an unclear levy. It doesn't go back to the industry. We do not accept being labeled as tourism, but it doesn't go back to the industry," said Hariyadi.