INDONESIA - 2021 Cancellations Ahead, is your booking at risk?

[Dan]

Do you have travel booked for 2021 - LAB or Land? What communications have you received from your op?

Yes. Sangalaki-Kakaban-Maratua 4-10 August, 2021 with 15% off

No communication, yet, as it’s still far enough away. Hopefully the vaccine would make the pandemic situation more manageable by then.

 

[Blackcrusader]

I can say this. Taiwan has now banned contract workers from Indonesia entering Taiwan. They are supposed to be PCR tested and free of the virus before flight. On arrival they are tested and everyone from Indonesia has found to have the Wuhan virus.

Indonesia really had no clue as to how many of the people in country have the virus. Just assume everyone does. I would not pay for any flights or hotels or liveaboards for Indonesia or Philippines for 2021.

Without a vaccine in many Asian countries I think 2021 is being hopeful at best. I'd love to do the 10 day Komodo Raja Ampat liveaboard and a couple of friends both want to do that together.

 

[Dan]

Rich, you can always go cheaper. We sailed on a Komodo trip - Maumare/Lubuan Bajo.

Look carefully at the low cost LAB trips from LB or Bali, they are not aimed at the Arenui market. Now, if you/me were 20 something ... it looks like a great deal of fun.

The Arenui is a luxury trip in all respects.

The Indonesian crew provides top-notch service. Great food, as much assistance as you want with your gear, great diving. Accommodations are spacious, cleaned relentlessly and quite comfortable. Open air dinner and drinks while a volcano shoots flaming rocks into the sky - its over the moon.

On our trip the cruise directors were Lisa Herding (German) and ‘G’ Alcover (Spain). They worked hard to see that the trip went well.

We booked late, joining a photo centric trip composed of two groups. One was lead by the legendary Burt Jones and the other by Keri from GotMuck. The interaction between the two groups was alone worth the trip cost.

Burt Jones and Maurine Shimlock: Three Decades of Inspiration ::
Komodo Gallery Archives - Got Muck

For us, we wouldn’t choose to sail again with such a heavy duty group of photogs. Everyone in this group had huge setups. Some of the sites they were high on weren’t our favorites. Lisa took four of us - gopros and small cameras - to alternate sites once she saw we weren’t interested in camping out on one subject for most of a dive.

Our trip? We flew to Bali, did the tourist tour and dove Tulamben. The Arenui trip next. And then Two Fish Divers Lembongan, wrapping up at the Gills. Each stop was quit different - all were great.

Would we go back. Yes to the Komodo Arenui, Bali diving - No to the Gillis.

I don’t care for the Arenui’s current cancellation policy. I understand that they require you to pay in full to receive credit for a future trip. If you are 50% paid you have to pay the second half to make your credit good, even if your trip was canceled. Not very consumer friendly. We would look at a short booking window once INDO has established that they are open for tourists.

Nothing on the trip was remotely similar to a Caribbean LAB

Interesting info! Burt Jones was on my last trip to Raja Ampat in Jan 2020, Raja Ampat Jan 2020 Trip Report

 

[Cert1967]

But I can imagine that LOB's and resorts are much more looking forward to bookings of guests from which they did not receive a payment yet. I wonder how many would be able to manage it financially to have, let's say, 80% of their capacity used the next year(s) by guests who already paid.

Well, now we are down to the key consumer issue. Yep, it is those guests 'who already paid' and are expecting services for their hard-earned money paid out to ops. Imagine that, a bunch of consumers who expect to get what they paid for - a novel idea isn't it. Foolish weren't they?

The consumer didn't cause the virus and the resulting tourist lockdown, they can't cure it and surely have no control of the situation. Maybe some are restaurant owners and are bearing the same crushing burdens that INDO ops are?

I suppose that INDO ops could say it's not our problem that the country is closed to tourists and you can't get here that's your problem. Well, that would leave a bunch of unhappy customers and a ruined reputation. Collecting cash for future bookings would likely be quite difficult.

The dirty little secret - well not so secret - most Indonesian boats and resorts spent forward booking consumer deposits on current operating expenses. Simply put, spending future deposits on current expenses - while counting on more deposits coming in or future bookings - is a Ponzi scheme. Pure and simple. And simply put it is robbing Peter to pay Paul.

So, the flu hit, and the merry-go-round of future booking deposits coming in stopped.

Faced with the conundrum of customers wanting refunds - impossible given that their money was already spent in most cases - the gig was up. And the problem is the sole responsibility of the op, they took money from their customers knowing full well that it would be spent before they arrived. A secret that they never told their customers. Some ops even spoke directly to this issue - 'we spent your money today and have to have cash for our future booking spaces'. Told this upfront, consumers may well have kept their cash in their pocketbook.

I am told that a few boats - at outside investors' insistence - actually escrow future booking deposits. The accounting is simple, debit cash (ideally some type of escrow account) and credit a liability account for future bookings. Perhaps a novel concept to many ops - they have someone else's money and haven't provided the promised service. When the service is delivered the liability account is debited and sales are credited. Everyone benefits when the cash is used for the reason it was accepted from the customer - to secure their time/space/services that make up their vacation.

Without a doubt, INDO ops are in a tough spot. Some won't make it. Many consumers are likely to lose their deposits. It is a lousy situation for both the ops and their customers.

 

[Cert1967]

Interesting info! Burt Jones was on my last trip to Raja Ampat in Jan 2020, Raja Ampat Jan 2020 Trip Report
View attachment 632296

He ages well. Komodo 2015 snap, looking a little pensive, good hair

 

[drrich2]

The dirty little secret - well not so secret - most Indonesian boats and resorts spent forward booking consumer deposits on current operating expenses. Simply put, spending future deposits on current expenses - while counting on more deposits coming in or future bookings - ...

It's been my understanding from elsewhere this is likely common, and not unique to Indonesia. As a conservative I see the appeal in only not spending money from a customer until providing the service to that customer...but I'm not sure how practically workable that is in real world practice. It's not unique to them, either...think of the concept of there being a 'run on the banks.' Not keeping enough liquid cash in hand to pay off all creditors on demand is common in business.

You're right, these business are now in a hard situation...some literally can't refund all the money. And if they can't afford to block out a solid year of 'payback' trips with no new cash flow, maybe that means...waiting a long time for the payback.

But if the vendor is willing to make good on the trip at a (much) later date, does that mean one's travelers' insurance won't pay what they might otherwise cover?

Were the airlines accommodating of such a lengthy reschedule? Researching a possible Raja Ampat trip, I read where Dan mentioned boats can be filling a year in advance, but talking with my dive travel agent, I learned the time frame to book airfare is likely 9 to 10 months out. By the time you learn you're cancelled, I assume you've bought roundtrip airfare, maybe even reserved an overnight hotel going and coming?

Is 2021 shaping up to be 2020's mean little brother?

 

[Indah]

Well, now we are down to the key consumer issue. Yep, it is those guests 'who already paid' and are expecting services for their hard-earned money paid out to ops. Imagine that, a bunch of consumers who expect to get what they paid for - a novel idea isn't it. Foolish weren't they?

The consumer didn't cause the virus and the resulting tourist lockdown, they can't cure it and surely have no control of the situation. Maybe some are restaurant owners and are bearing the same crushing burdens that INDO ops are?

I suppose that INDO ops could say it's not our problem that the country is closed to tourists and you can't get here that's your problem. Well, that would leave a bunch of unhappy customers and a ruined reputation. Collecting cash for future bookings would likely be quite difficult.

The dirty little secret - well not so secret - most Indonesian boats and resorts spent forward booking consumer deposits on current operating expenses. Simply put, spending future deposits on current expenses - while counting on more deposits coming in or future bookings - is a Ponzi scheme. Pure and simple. And simply put it is robbing Peter to pay Paul.

So, the flu hit, and the merry-go-round of future booking deposits coming in stopped.

Faced with the conundrum of customers wanting refunds - impossible given that their money was already spent in most cases - the gig was up. And the problem is the sole responsibility of the op, they took money from their customers knowing full well that it would be spent before they arrived. A secret that they never told their customers. Some ops even spoke directly to this issue - 'we spent your money today and have to have cash for our future booking spaces'. Told this upfront, consumers may well have kept their cash in their pocketbook.

I am told that a few boats - at outside investors' insistence - actually escrow future booking deposits. The accounting is simple, debit cash (ideally some type of escrow account) and credit a liability account for future bookings. Perhaps a novel concept to many ops - they have someone else's money and haven't provided the promised service. When the service is delivered the liability account is debited and sales are credited. Everyone benefits when the cash is used for the reason it was accepted from the customer - to secure their time/space/services that make up their vacation.

Without a doubt, INDO ops are in a tough spot. Some won't make it. Many consumers are likely to lose their deposits. It is a lousy situation for both the ops and their customers.

It would have taken all what you wrote more serious if you would have let out the sentence: "the flu hit". But apart from that I do not disagree that much with you. I just wrote my thoughts in reponse to the original post. Without attaching a moral judgement to it. By the way, we did not demand any deposit the last couple of years for reservations in our resorts. And will still offer the service to pay at the end of the stay with us. But I think that the whole dive tourism industry in Indonesia, and probably some other countries, is in deep trouble. You are correct that we far too much expected continous growth. Investments have been done and staff trained. Money is very expensive in Indonesia with interest rates of 15% -20% or more. Inflation rates of 8% (before Covid) and laws that payments have to be done in Indonesian currency.

 

[Cert1967]

<<>>but talking with my dive travel agent, I learned the time frame to book airfare is likely 9 to 10 months out.<<>>

Well, I don't think that your agent is correct.

The USA to Asia sees one of the lowest per-mile cost structure of any international travel.

The cost crusher? The big three Chinese air carriers. The lowest cost trip is often via China.

While you can't travel on these dates (biz visas excluded), January sees LAX-CGK listed at $645 RT, JAL/AC. At times the cost for this route is below $600.

Close-in air costs? Much less of a premium - often none - compared to USA - Europe travel.

And close in award seats? Yep, this too.

Options? East or West, whatever suits your FF status, biz v coach, upgrade sensitivity, time horizon, and more. So many route and cost options.

Last trip to CGK - one couple flew LAX-PVG-CGK and return - for $750. That about 14k miles RT.

I call BS on 9-10 months out.

 

[Cert1967]

It would have taken all what you wrote more serious if you would have let out the sentence: "the flu hit". But apart from that I do not disagree that much with you. I just wrote my thoughts in reponse to the original post. Without attaching a moral judgement to it.

Well, OK the Virus hit and hit hard. That would be the 'severe acute respiratory syndrome coronavirus 2, (SARS-CoV-2), a different virus than the flu. But at the same time, quite similar.

Me - attaching a moral judgment? Hardly. Just facts. And while I am not familiar with Indonesian consumer protection laws ...

In Colorado taking deposits and not delivering may well result in criminal liability. Ponzi schemes violate both state and federal laws in the USA.

I see that you own an INDO resort. Your booking and payment policies seem consumer-friendly. We have encountered a few INDO ops that didn't require a deposit - only a notice of our air booking.

Your website looks good. I hope you make it. Good Luck.

 

[Indah]

Well, OK the Virus hit and hit hard. That would be the 'severe acute respiratory syndrome coronavirus 2, (SARS-CoV-2), a different virus than the flu. But at the same time, quite similar.

Me - attaching a moral judgment? Hardly. Just facts. And while I am not familiar with Indonesian consumer protection laws ...

In Colorado taking deposits and not delivering may well result in criminal liability. Ponzi schemes violate both state and federal laws in the USA.

I see that you own an INDO resort. Your booking and payment policies seem consumer-friendly. We have encountered a few INDO ops that didn't require a deposit - only a notice of our air booking.

Your website looks good. I hope you make it. Good Luck.

Sorry, did not intend to say that you attached a moral judgement. And neither did I. Are these laws also true for banks and insurrance companies? For flight carriers? For retirement funds??