Traveloka is nearly profitable despite Covid-19

Indonesian online travel agency Traveloka is poised to break even soon despite worldwide quarantines aimed at limiting the movement of people to curb the spread of Covid-19, said company president Henry Hendrawan.

Photo credit: Traveloka.

Speaking onstage at this year’s Tech in Asia conference, Hendrawan said that the company has been marching to profitability as its transaction numbers in Vietnam and Thailand have reached nearly 100% of its pre-Covid-19 levels.

When pressed by East Ventures co-founder Willson Cuaca during the discussion, Hendrawan confirmed that Traveloka is set to break even by the end of 2020 or early 2021 and will be profitable soon. East Ventures is an investor in the startup.

“Travel is recovering surprisingly well in Southeast Asia,” Hendrawan said. “In the three domestic markets that we have – Indonesia, Thailand, and Vietnam – the recovery has been going strong.” He also said that in Indonesia, the company’s total hotel transaction reaches about 70% to 75% of its results before the Covid-19 pandemic hit.

Traveloka’s weekly active user count on Android has been recovering since a steep drop in March, although it’s still some distance away from pre-pandemic levels, according to a third-party estimate seen by Tech in Asia.

“What we see is that people are changing their travel behavior. They make short trips outside the city or take ‘staycations’ inside the city,” Hendrawan shared. “The strength of Traveloka is in domestic and local travel, so this is actually playing into [our] strengths.”

The company also recently bolstered its Online Xperience offering by adding virtual tours to 15 destinations in Indonesia while it waits for travel restrictions to ease. This is in partnership with local tourism firm Atourin Teknologi Nusantata.

Tech in Asia has reached out to Traveloka for further information.

Startups and other businesses, particularly in the travel industry, have been severely affected by Covid-19 when it began spreading across the world in March.

See also: A roadmap for online travel’s long, painful path to recovery

In May, Indonesian budget hotels aggregator Airy announced it had permanently shut down due to “a significant technical decline and a reduction in human resources.”

It was also reported that Traveloka cut around 100 employees, or 10% of its workforce, in April this year. In July, the company said it saw daily refunds and booking rescheduling requests increase by as much as 10x since February.

However, the travel unicorn said in August that it had already cleared up 90% of the roughly 1 million flight ticket refund requests it received amid the pandemic. The refunds were worth a total of 1.4 trillion rupiah (US$95.9 million), according to a LinkedIn post by East Ventures’ Cuaca.