Caesar Indra, president, Traveloka
Caesar Indra joined Indonesia-based Traveloka in 2012 to develop the flights product at a time when the company offered only domestic routes with 10 carriers.
Traveloka landed investment from PTT Oil and Retail last year as well as a $300M financing facility from Indonesia Investment Authority with the funds to go toward further growth.
*Answers edited for brevity.
With China opening up and the rest of the world traveling once more, what do you think has changed in the online travel space in the past three years?
The return of travel in the post-COVID-19 era has been met with optimism by travelers across the world. The excitement has risen with China’s reopening. Currently, however, the appetite for domestic tourism remains much greater compared to outbound travel – a trend that surfaced when cross-border restrictions were still in place.
Staycations and local weekend destinations have a good take-up rate on our platform. But even as people continue to plan for long overdue trips, we have observed how they are buying travel insurance or flexible options to remain adaptable amid changes in regulations and unforeseen disruption.
Another welcome change is technology’s increasingly central role in achieving a seamless travel experience. The pandemic had accelerated Southeast Asia’s digital adoption, bringing 20 million new internet users in the region online in 2022 – most of them via smartphones. Combined with the increasing spending power of a growing middle class, providing new digital avenues for people to easily access travel services is key to success.
Traveloka has been pursuing a local strategy in recent years, will this continue?
Southeast Asia is a diverse region – we have both emerging and developed markets, and as such localization of services is crucial, especially in a market dominated by domestic tourism. Indonesia saw 600 million domestic tourists from January to September 2022, a sharp rise from 275 million people in 2019, while Vietnam welcomed 86 million domestic visitors, exceeding pre-pandemic levels. These sizeable increases underline the importance of the local markets in Southeast Asia when compared to Europe, where domestic travel in the first half of 2022 fell 7% below 2019 levels in the same period.
As Southeast Asia’s leading travel platform, it is in our DNA to solve local problems with our own tech solutions. This allows us to concentrate on supporting our markets to provide products and services suited to their domestic tourism needs.
As travel recovers, services that complement travel – such as local and financial services – will become even more important as travelers in a post-COVID world will have higher expectations of enjoying a holistic and flexible experience.
What is the company’s strategy for growth going forward?
We will continue to deepen our leadership in Southeast Asia by ensuring that our users can discover comprehensive and competitive travel products on our platform, creating a pleasant experience on their travel journey.
We have already seen how the appetite for travel and the incentives for traveling have vastly evolved from the pre-pandemic years to the post-pandemic recovery period. Such dynamic changes can sometimes catch businesses off guard, so being adaptable ranks high in the future of travel. For Traveloka, that means being flexible, agile and fostering a collaborative ecosystem to deliver a connected experience and provide relevant innovations for the travelers of tomorrow.
Traveloka secured a $300 million financing facility last September to go toward growing its digital ecosystem. Can you provide an update on initiatives?
We are lucky to have investors who believe not only in our vision, but our capabilities in execution, having weathered some of the most challenging environments such as the pandemic. The funding has been crucial in strengthening our balance sheet. It has given us the confidence to remain focused on elevating our core business – travel and financial services – while also investing in our future. Southeast Asia’s burgeoning digital economy is filled with potential.
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Our current efforts are aimed at growing our leadership in a region with over 400 million internet users and an internet penetration rate of over 70%. We will continue to build capabilities to enhance our offerings to make sure that our users get the most competitive and comprehensive selection of travel products, as well as acquire an under-penetrated segment of consumers within each of the markets that we operate in today.
Traveloka is said to be the largest online travel app in Southeast Asia. How do you plan to maintain this position?
Traveloka is the region’s leading travel platform with more than 100 million downloads and 55 million monthly active users. Maintaining our position requires a consumer-centric mindset. We pay close attention to our consumers and keep track of their roadblocks so that we can continue to offer new human-centric, tech-based products and services to address their pain points.
Flexibility and choice play a big role in travel today, especially in the post-COVID era of changing needs and unexpected disruptions. As such, we work closely with our suppliers to provide more options. Traveloka not only works with medium and large operators, but also small ones, such as individual activities providers. Our market management team has historically supported local suppliers to ensure that their product offering is relevant to the consumer at any given time.
Take sustainable tourism, an increasingly popular travel trend, for instance. More than half of our users surveyed in Indonesia would be willing to pay a premium for sustainable accommodation. With travel back in full swing, we want to provide sustainable options as part of our product and operations strategy moving forward.
What is your view on the potential for super apps in travel?
We believe that there is a need for a seamless, integrated experience. The pandemic has accelerated digital adoption, and consumers have become accustomed to the convenience of mobile apps and platforms. These, combined with the desire for easy access to goods and services, have created a culture of instant gratification, one which consumers have grown used to and have come to expect, all on one platform. But it is not just about putting a slew of products together on an app. What’s important is serving consumers throughout their travel journey, on top of showing them the options.
The pandemic had accelerated Southeast Asia’s digital adoption, bringing 20 million new internet users in the region online in 2022 – most of them via smartphones.
The International Air Transport Association revealed that the top post-COVID travel concerns were focused on simplification and convenience. In the past, searching for travel and accommodation options was difficult. Consumers could spend an hour at a physical agency just to book a hotel or flight. With the development of technology and digital services, they can now complete the same task within minutes on a versatile platform that has already been ingrained in their daily lives.
Traveloka builds tech solutions that are intertwined with our relationships with consumers and suppliers. This mindset gives us a crystal clear vision on the kind of solutions that are relevant to our consumers every step of the way. For instance, our high flexibility tickets as well as options such as “pay upon check-in” and “buy now, stay later” options have proven useful with the changing travel restrictions and have provided a positive experience for consumers.
Meanwhile in Indonesia, bus operators tap our software to manage their passenger check-in and boarding processes, which ensures a seamless end-to-end travel experience for our users.
You have launched many payment options for travelers in your markets including a buy-now-pay-later service. Do you have plans for other fintech-type services?
We believe that technology and fintech are powerful enablers that democratize access to financial services for consumers. We will focus on deepening our existing product offerings to ensure consumers get the best end-to-end travel experience as far as possible.
Having invested in a wide range of products, including insurance, we are constantly striving towards our goal of helping consumers achieve their travel aspirations and to travel with ease. With Southeast Asia’s digital lending transactions expected to hit $92 billion by 2025, we want to tap that growth by offering travelers choice. As such, we have collaborated with global partners to offer more than 30 digital payment options on our platform, as well as developed our own in-house “buy now, pay later” solution, Traveloka PayLater, which helps underserved but eligible travelers get access to credit for their travel needs.
Other digital payment methods in our key markets include bill payments at convenience stores in Thailand.
There is talk of a funding winter in Southeast Asia. What is your view on the state of startup funding and valuations?
The drop in startup deal volume has occurred globally. It is important for any company, especially startups, to be disciplined with their finances and have a sound business model with a clear path to profitability. We are fortunate to have a strong bench of committed investors who believe in our vision to be the leading travel platform by weathering the challenging and unpredictable market conditions. The travel sector is one of the brighter gems with steady recovery already underway, and we expect to see a full rebound by 2024.
You worked your way up through Traveloka before becoming president. What experience from previous roles across the company do you apply now?
When Traveloka CEO and co-founder Ferry Unardi convinced me to join his journey to build the company 10 years ago, he gave me the task of developing our flight products and operations. Traveloka was only available in web interface back then, and most transactions were done on desktop.
At the time, we only offered domestic flights within Indonesia on fewer than 10 airlines. I worked alone as almost everyone else was busy preparing for the launch of our first hotel booking product. But that experience taught me that there was no such thing as a predefined role – I did what was necessary to help Traveloka survive and thrive. From convincing local airlines to invest in their own tech infrastructure to managing the customer care team, I was able to lay the foundation for the business growth on a wide range of transport products across our six key markets in Southeast Asia.
It is difficult to pinpoint a specific experience, but what I can say is that my knack for problem solving, building and leading a diverse team, and a curiosity to learn new things have put me in good stead to continue contributing in my current role.
You believe in improving the world through technology. How do you think the travel industry is doing that?
The industry has come a long way in improving the world through technology by increasing connectivity, raising efficiency and establishing a high quality of service. Traditionally, the sector has been known for its manual processes, but the advent of multiple digital payment options has changed that.
For instance, users who previously did not have access to credit are now able to finance their travels with PayLater – close to 10% of our transactions are paid for using PayLater.
We have connected close to 120,000 local hotels in Southeast Asia to both regional and global markets that they previously found difficult to reach.
We also led the digitalization of Indonesia’s bus industry, where millions of people had to queue for hours to buy tickets previously. Developing the right technology to create a wide and robust network of transport groups within the country not only increased convenience and efficiency, it led to a high quality of service as consumers could constantly give feedback to operators through our platform.
Technology has also started helping in reducing the environmental impact of travel by enabling more sustainable practices, such as carbon offsetting programs, the use of renewable energy sources and green fuels. In 2022, we partnered with the Global Sustainable Tourism Council (GSTC) to facilitate sustainability training to hotels. Our users will then be able to identify hotels with GSTC certification.
See below for an executive panel session with Caesar Indra during The Phocuswright Conference which focuses on opportunities for growth:
Executive Panel: The Bridge Series - The New World Beckons - The Phocuswright Conference 2022
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PhocusWire talks to leaders across the digital travel landscape.