1. Startups

Airy will permanently close the business, OTA is in a fog due to the pandemic

Currently the platform no longer displays listings for orders after 31 May 2020

The bad news is coming from the local OTA (Online Travel Agency) industry. Airy or Airy Rooms will permanently cease operations by the end of May 2020. We initially received the news from someone involved in the company's operations. It was later discovered that several property partners had received an official email notification regarding the planned service closure.

DailySocial tried to contact the management since Wednesday (06/5), his party still could not provide information – although they did not deny the news.

The hurricane of layoffs also continues in Airy, the development of the number is monitored through the website SEAcosystem. com - a worksheet a collaborative effort initiated by a number of Southeast Asian venture capitalists to help affected talent and startups layoffs because of Covid-19. Our informants also confirmed that the layoffs were being carried out in stages.

In addition, from our experiments, currently the Airy platform no longer displays property listings for searches above May 31, 2020. Even for flight ticket bookings, if you enter June 1, 2020 and above, it will not display route search results.

Since the beginning of the year, when the Covid-19 pandemic began to haunt the Southeast Asian region, there has been a sharp decline for Airy service users. Made worse by initiative lockdown and physical distancing in almost all countries where people travel (out of town or abroad) are hardly done by people.

As is known, in addition to offering low-cost lodging accommodations, Airy also provides a flight ticket booking feature.

Decrease in traffic to Airy's website, on desktop and mobile platforms / Similarweb

Earlier this year the company too just do the succession by appointing Louis Alfonso Kodoatie as the new CEO. Armed with 30 thousand rooms spread over 100 cities, they are quite confident that they can continue to penetrate the market. Moreover, at the end of last year Airy for Business was also just launched, as a service that offers services online for corporate travel management.

All OTAs are affected, no exception

Last month there was also news about a significant reduction in employees by Traveloka. The cessation of the operation of intercity public transportation modes such as planes and trains will certainly have an impact on the decline in company income. The almost zero tourist visits also make bookings for accommodation services such as hotels or recreation tickets decline sharply.

Decrease in Traveloka site traffic, on desktop and mobile platforms / Similarweb

Unlike Airy, with status unicorn Traveloka ideally has runway the longer one. Especially since last year the company is also intensifying fundraising up to 7 trillion Rupiah. It was also conveyed on an occasion by Co-Founder & CEO Ferry Unardi that the startup he founded was planned to go dual listing IPO in next 2-3 years - at that time there were no assumptions worstcase due to the pandemic.

Observing the current conditions, to DailySocial Economist from the Center of Reform on Economics (CORE) Yusuf Rendy Manilet believes that OTA players in Indonesia will definitely be hit hard by Covid-19. However, Yusuf saw that they were not hopeless in this precarious situation.

"I think they can take advantage of the potential of domestic tourists but those that are more local in nature, such as culinary tourism," said Yusuf.

A Traveloka representative, who was contacted separately, admit concern on the situation that occurred. But they refused to explain the extent of the impact they received. "Currently our focus is on prioritizing the safety and comfort of users in planning their trips," said Head of Marketing, Transport, Traveloka Andhini Putri.

Pegipegi also felt the same way. The company's response was not much different. They are still busy accommodating the needs of travelers who use their services, including in canceling reservations. "Currently, for customers who want to cancel their order, it can be done easily through the Pegipegi application by using the Online Refund feature," explained Pegipegi Corporate Communications Manager Busyra Oryza to Dailysocial.

OTAs in Indonesia

The local OTA business is filled with local and foreign players, although from the trends in the previous year local players get a larger share of users. Of the many players, five of them have the most traction, including Traveloka, Pegipegi, Tiket, Airy, and Nusatrip.

Popular local OTA platform in Indonesia / DSResearch

Report e-Conomy SEA 2019 also shows, online travel is still the second most influential digital sector after E-commerce. In 2019, the industry recorded GMV reaching US$10 billion and is projected to grow to US$25 billion in the next five years.

The situation can change, even after the pandemic ends "New normal" will be a challenge in all business sectors. To remain on-track To reach its highest potential, every business must be able to adapt and innovate, even for travel. The good thing is, this industry has grown rapidly, OTA players are no longer just selling tickets. More than that, each one transformed into a service with a variety of integrated features.

It is about how the company survives. Basically traveling is a necessity, both for personal and business purposes. When the situation becomes conducive, sooner or later, this sluggish sector will return to gas as usual.

Application Information Will Show Up Here
Are you sure to continue this transaction?
Yes
No
processing your transactions....
Transaction Failed
try Again

Sign up for our
newsletter

Subscribe Newsletter
Are you sure to continue this transaction?
Yes
No
processing your transactions....
Transaction Failed
try Again