The competition in travel agency business is getting stiffer in the wake of the free trade agreement of ASEAN Economic Community (AEC). The free trade agreement implementation has seen foreign travel agencies competing directly with local agencies, including in Yogyakarta.
“Foreign travel agencies have been expanding into Yogya in the past two years,” said Edwin Ismedi Himna, Counsellor of Asita Associatoin of The Indonesia Tour & Travel Agencies (Asita) Yogyakarta.
He said that the foreign travel agencies are originated from Korea, Japan, the United States and France.
The free trade agreement implementation will see foreign travel agencies handle both domestic and overseas vacation packages. “Local agencies are being left behind despite efforts [to compete] by setting competitive or cheaper prices,” Edwin said.
According to Edwin, of 190ish current member travel agencies incorporated in Asita Yogyakarta, only 30 percent are still handling European and American tourists. “Most agencies prefer to keep targeting Asian tourists that are deemed to have more potential by exploiting short-haul destination programs,” he said.