How has the corporate travel market grown in the past five years?

It has grown significantly. In the past, travel agencies handled everything – ticketing, inbound, outbound. When the global travel management companies started to enter Indonesia in the early 1990s, they began to open the path, introducing their concept. Only then was the corporate market as a segment introduced to Indonesia.

How big is the market?

It is hard to tell as there is no survey on it. Just some indication – roughly 60 per cent of the business of major travel agencies in the key cities comes from the corporate market.

However, they may not be purely business travel. Secretaries do not only book their bosses’ tickets for business trips, but for their personal or family trips as well, and agents count them as corporate travel booking.

If you look at the top travel agencies in Indonesia, they are all tied to international travel management companies, today. This shows there is a significant market, with lots of potential still.

Are more companies recognising the value of a travel management company?

More and more Indonesian companies are making alliances with multinational companies in order to make themselves more competitive globally. Multinational companies normally have a competent travel management company to help fulfil their travel needs. It is through these alliances that the value of a travel management company penetrates through Indonesian companies.

Are you focusing on the multinationals, or those affiliated with such companies?

Some 80 per cent of our business today is from multinational companies, but this does not mean we are not after the local market. We opened Carlson Wagonlit Travel in Indonesia to develop the market here. In business, we cannot rely only on one segment.

The local market, however, still has to go through the education process. It is our job to show them that using our services as their consultant in managing their travel expenses totally – rather than just selling them cheap airline tickets or book hotel rooms – can benefit them more. We are different from the traditional travel agencies they know.

What are the challenges in dealing with the local market?

It is like changing a culture, and you cannot expect to change anything in a day. The market is very price-driven, especially today, when belt tightening and budget cutting are happening everywhere. Many companies still think efficiency means finding the cheapest air fares. They will always shop around to find the “best” offer, and will easily move to another agent who offers just a dollar less.

But, slowly, we begin to see travel managers realising the value of travel management companies such as us.

Our target is to balance business between our multinational and local companies in five years, providing all external factors support the business environment in the country.

Who are your competitors here – other travel management companies or traditional ticketing agents?

Both. We compete with the global travel management companies for the multinational accounts, but with the ticketing agents for the local accounts.

How is Carlson Wagonlit Travel Indonesia positioned in this competition?

We are not the first to enter the market, but as Carlson Wagonlit is a big name internationally, multinational companies here recognise us. We don’t have to start from scratch. Therefore, although we are new, we are leading in the market.

We manage to increase business by 20 per cent from last year, and I’m expecting it will grow at the same rate next year. This is a moderate target. If economic conditions in the country are stable, we may get more.

The growth of corporate travel in Indonesia really depends on the growth of the economy and the business climate, within the country and in the world.

While the economists say growth in the country will not be rocketing, business is promising for our company in the next five years. Travel management is still immature; there are big opportunities for us to grab from just the existing market.

For our company, the professional staff and programmes we offer to clients are the factors. Plus, our ability to convince them we can save their travel expenditure.

What needs to be done to foster the growth of the corporate travel market in Indonesia?

The more conducive the country is for business, the better the growth will be. Indonesia needs to deregulate foreign investments, introduce tax holidays and trim country risks.

On the travel players side, offer professional services and stay away from dumping prices. Price wars will only benefit buyers; they will not do any good for any business.