Traveloka says it has cleared nearly $100m in refunds

Indonesian online travel unicorn Traveloka said it has cleared up 90% of the roughly 1 million flight ticket refund requests it received since the beginning of the Covid-19 pandemic.

Traveloka employees giving out masks to passengers at Jakarta airport earlier this year / Photo credit: Traveloka

The refunds were worth a total of 1.4 trillion rupiah (US$95.9 million), according to a post by East Ventures co-founder Willson Cuaca. East Ventures is an early investor in Traveloka.

Cuaca noted that Traveloka mostly relied on the processing flow of the airlines on its platforms, making the refund process complicated for the company. Traveloka said it’s also bound to comply with the policies set by its partners, including the form of refund (e.g. travel voucher) and waiting period, among others.

The company’s head of marketing for transport Andhini Putri told Tech in Asia that requests for refunds and booking rescheduling increased by as much as 10x since February this year. To tackle this, the startup had to bolster its back-end system and allocate more than half of its staff to help with the requests.

“This results in the clearance of more than 90% refund requests that we received, whereby we are waiting for our partners to further process and provide their confirmation for a considerable amount of the requests,” Putri added.

Late last month, the hotel and flight booking platform said it has raised US$250 million in new funding to strengthen its balance sheet and help deepen its offerings in select priority areas.

The new funding came as the company witnessed a “historic drop” in activity due to the pandemic and strict movement restrictions. However, Traveloka said it has started seeing “encouraging recovery” across domestic and short-distance travels as well as activities bookings.

Putri said that the company is still closely monitoring the situation to make further strategic decisions. It’s also constantly improving its systems and processes specifically for refund and rescheduling requests. “This is part of our effort to have a preemptive measure should a similar situation occur in the future,” the exec added.

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

Online travel agencies, along with the wider travel industry, have borne the brunt of the Covid-19 crisis. One less fortunate player in the region is Airy, which had to shut down its operations permanently.

Ctrip, a major player in China, is looking to delist from Nasdaq amid the pandemic and escalating US-China tensions.

In a previous interview, MDI Ventures vice president of investments Aldi Hartanto told Tech in Asia that online travel agencies would need to shore up a runway of at least 18 months, do emergency fundraising, or merge with a bigger player to survive the crisis.