Eid, Household Consumption Driven by Increase in Travel Platform Transactions

Eid encourages economic turnaround. However, this household consumption is only temporary.

Clothing merchants' stalls are crowded with visitors to buy new clothes ahead of Eid al-Fitr at Johar Market, Semarang City, Central Java, Sunday (7/4/2024). This long holiday season Eid encourages economic turnover in various sectors from retail trade in goods and services to tourism. This week, residents will use their money for various consumer needs during the Eid holiday.

JAKARTA, KOMPAS – Household consumption has the potential to drive economic growth in the second quarter of 2024. The disbursement of salaries and holiday allowances or THR simultaneously supports public consumption. This is reflected in the increase in transport, accommodation and recreation ticket transactions on online travel platforms.

According to the Executive Director of the Institute for Development of Economics and Finance (Indef) Esther Sri Astuti, the effect of money circulation will boost household consumption. Economic growth this quarter is estimated at around 4.8-5 percent. Eid al-Fitr has a multiplier effect. This period also contributes to economic growth in the second quarter of 2024.

"The disbursement of salaries and Eid bonuses coincided this year, which is what prompted people to go home. During Eid, it is our tradition to go back to our hometowns. If we don't have money, we make it happen somehow. After Eid, we'll look for money again," said Esther in Jakarta on Monday (8/4/2024).

This applies to all segments of society. Even those in the lower and middle classes will strive to return to their hometowns regardless of their economic condition. After the holiday season, they will then focus once again on making money.

Esther continued, Eid al-Fitr does indeed boost household consumption. People celebrate Eid al-Fitr more festively by shopping for various things, including food and clothing. However, this consumption is only temporary.

Household consumption is also reflected in the data from online travel agencies (OTA). They recorded an increase in transactions for various modes of transportation leading up to Eid al-Fitr. Communities have secured their tickets well in advance.

Also read: Ramadan Arrives, Motor Vehicle Financing is Expected to Be Back to Success

Traveloka's internal data shows that the peak of train (KA) transactions is actually furthest from the Eid holiday compared to other modes of transportation. Peak transactions occurred from February 20 2024 to March 8 2024. Throughout March, searches for train tickets increased more than 30 times compared to February 2024

"The ground transportation mode, such as trains, buses, and travel, is still a choice for people to travel, especially in the inter-Java Island region," said CEO of Transport Traveloka Iko Putera.

Apart from trains, the community is also searching for buses approaching the Eid al-Fitr holiday. The trend of searching for buses and travel during the Eid al-Fitr period has increased almost 12 times. The favorite destinations of the community using land transportation include Yogyakarta, Surabaya (East Java), Semarang (Central Java), Malang (East Java), Bandar Lampung (Lampung), and Padang (West Sumatra).

KOMPAS/NASRUN KATINGKA

Passenger activities at Sentani Jayapura Airport, Papua, Sunday (7/4/2024).

Meanwhile, the peak of airplane ticket transactions occurred on March 23-30, 2024. The trend of searching for domestic destination tickets increased up to twice as much in March 2024 compared to the previous month.

Favorite cities in search are Surabaya (East Java), Yogyakarta, Padang, Makassar (South Sulawesi), and Bali. During the same period, international destinations are also in demand, including Kuala Lumpur (Malaysia), Singapore, and Bangkok (Thailand).

Iko added that searches for accommodation via Traveloka during the Eid holiday period increased by more than 50 percent in March 2024, compared to February. Four star hotels are the most frequently referred to, both for staying in the city (staycation) and outside the city. Tourist attractions and theme parks also show similar trends.

Also read: Competition vs Collaboration with Travel Agents

A similar condition also occurred on the Tiket.com platform. Approaching Eid, people's enthusiasm for vacationing is reflected in the increase in transportation orders (60.8 percent), accommodation (18.4 percent), and tourist activities (16.5 percent) compared to Eid 2023.

During the Eid al-Fitr holiday, the highest increase in transportation bookings was experienced by buses and travel agencies, up to 330.8% compared to the same period last year. This trend was followed by trains (60.9%) and planes (49.6%).

“Ferry performancealso grew in a positive direction, recording a 10 percent increase in bookings in the first week of Ramadan when compared to the previous week. "Most orders are from the Merak-Bakauheni route, followed by the reverse route," said Tiket.com Co-Founder and Chief Marketing Officer Gaery Undarsa.

KOMPAS/RONY ARIYANTO NUGROHO

The atmosphere of the street vendors around the Pasar Tanah Abang area in Jakarta overflowed onto the road on Sunday (7/4/2024). The traffic situation in the area looked chaotic and crowded. Some street vendors occupied part of the road to sell their wares. Although some residents have already returned to their hometowns, the bustling shopping activity in Pasar Tanah Abang is still evident.

Be aware of inflation

Household consumption is only temporary, so its contribution cannot be expected to grow consistently.

Esther stated that the economic growth in the second quarter of 2024 was boosted by household consumption which reached 53 percent. However, inflation tends to be a challenge after the Eid al-Fitr holiday.

"The price of food has gone up, but it hasn't returned to its original price. As long as the execution of supplies for certain goods, especially sufficient food needs, runs smoothly, inflation is still under control," he said.

Economic growth will be sustainable if driven by investment and exports. Therefore, these two aspects need to be pursued in the future. Price stability and exchange rate stability of the rupiah need to be maintained.

Price stability can be achieved through adequate supply of goods and smooth distribution. The exchange rate balance can be encouraged by attracting more foreign investment into Indonesia, increasing exports, and reducing imports.

Also read: What is the holiday allowance used for?