Friday, June 14, 2024

How-to understand tourism business activities regulation in Indonesia

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Tourism service business is one of the most potential business opportunities in Indonesia. In fact, almost all tourism services in Indonesia are full of enthusiasts. This bustling business cannot be separated from the fact that Indonesia has extraordinary natural beauty, along with its cultural diversity and uniqueness which is now an attraction for domestic and foreign tourists. On average, this tourism service business serves many customers, both domestic, regional and foreign customers. The diversity of tourist attractions in Indonesia itself, automatically affects tourism service business.

Governing law and regulation 

  • Law No. 10/2009 on Tourism as amended by Law No. 11/2020 concerning Job Creation
  • Government Regulation (PP) No. 5/2021 concerning Implementation of Risk-Based Business Licensing
  • Government Regulation (PP) No. 67/1996 concerning the Implementation of Tourism
  • Minister of Tourism and Creative Economy Regulation (Permenpar) No. 4/2021 concerning Standards for Business Activities in the Implementation of Risk-Based Business Licensing in the Tourism Sector

General rule of tourism business

The tourism business includes: 

  • tourist attraction; 
  • tourism area; 
  • tourist transportation services; 
  • travel services; 
  • food and beverage services; 
  • provision of accommodation; 
  • organizing entertainment and recreational activities; 
  • organizing meetings, incentive trips, conferences and exhibitions; 
  • tourist information services; ​tourism consulting services; 
  • tour guide services; 
  • water tourism; and 
  • spas.

Everyone has the right to have the opportunity to meet tourism needs, run a tourism business, become a tourism worker/labor and play a role in the tourism development process. Everyone and the community in and around tourist destinations have priority rights to become workers/laborers, to organize consignments and to carry out management. Tourism entrepreneurs must pay attention to the rights of tourists, including obtaining accurate information about tourist attractions, tourism services that comply with standards, legal and security protection, health services, protection of personal rights and insurance protection for high-risk tourism activities. Tourists who have physical limitations, children and the elderly are entitled to special facilities according to their needs. Every tourism entrepreneur is also entitled, among others, to obtain equal opportunities in doing business in tourism sector, to form and become members of tourism associations, to obtain legal protection in doing business and to obtain facilities in accordance with the provisions of the legislation.

Every tourism business actor is obliged as follows:

  • maintain and respect religious norms, customs, culture and values ​​that live in the local community;
  • provide accurate and responsible information; ​provide non-discriminatory services;
  • provide comfort, friendliness, protection of security, and safety of tourists;
  • provide insurance protection for tourism businesses with high-risk activities;
  • develop partnerships with local micro, small and cooperative enterprises that need, strengthen and benefit each other;
  • prioritizing the use of local community products, domestic products, and providing opportunities for local workers; improve the competence of the workforce through training and education;
  • take an active role in efforts to develop infrastructure and community empowerment programs;
  • participate in preventing all forms of actions that violate decency and activities that violate the law in the environment where the business is located; maintain a healthy, clean and beautiful environment;
  • maintain the preservation of the natural and cultural environment;
  • maintain the image of Indonesian state and nation through responsible tourism business activities; and
  • fulfill the business licensing from the government.

Travel agency business

The type of tourism service business can be in the form of:

  • travel agency services. The travel agency service business is operated by a Limited Liability Company or Cooperative, in the form of a Travel Bureau. The travel agency must meet the requirements of at least having professional personnel in sufficient quantity and quality and having a permanent office equipped with business support facilities. The business activities of the travel bureau include the following services:
  • planning and packaging of tourism travel components, which include tourist facilities, tourist objects and attractions and other tourism services, especially those in the territory of Indonesia, in the form of tour packages. This is the main activity that must be carried out by the travel bureau
  • organizing and selling tour packages by distributing them through travel agents and or selling them directly to tourists or consumers. This is the main activity that must be carried out by the travel bureau
  • providing tour guide services related to tour packages sold. This is the main activity that must be carried out by the travel bureau
  • provision of tourist transportation services;
  • booking accommodation, restaurants, convention venues, and tickets for cultural arts performances as well as visits to tourist objects and attractions;
  • processing of travel documents, in the form of passports and visas or other equivalent documents;
  • organizing religious worship trips; and
  • organizing incentive trips.

Travel agencies must fulfill the type and quality of the tourism travel components packaged or promised in the tour packages and provide optimal services for tourists who make reservations, manage documents and organize trips through the travel bureau. The travel agency is responsible for the safety of tourists who travel based on the tour packages it sells.

Travel agency service business

The business of travel agent services is carried out by a Limited Liability Company or Cooperative, in the form of a Travel Agent. Travel agents must meet the minimum requirements of having professional staff in sufficient quantity and quality and having a permanent office equipped with business support facilities. The business activities of travel agents include the following services:

  • booking air, sea, and land transportation tickets for both domestic and foreign destinations;
  • intermediary sales of packaged tour packages by the travel bureau;
  • booking accommodation, restaurants and tickets for cultural arts performances, as well as visits to tourist objects and attractions;
  • management of travel documents in the form of passports and visas or other equivalent documents.

Travel agents are required to provide optimal services and are responsible for providing booking services and document processing carried out and taking into account the norms and customs that apply to the provision of intermediary services, in terms of selling tourist tickets packaged by the travel bureau. Travel agents are prohibited from making changes to the components of tourist trips in packages packaged by travel bureaus and organizing tour packages.

Tour guide business

The tour guide service business is organized by a Limited Liability Company or Cooperative. A tour guide service business entity must meet the requirements of at least having a permanent office equipped with business support facilities and employing professional tour guides on a regular basis. The business activities of tour guide services include providing tour guides or coordinating freelance tour guides to meet the needs of individual tourists or the needs of the travel bureau. The activity of coordinating freelance tour guides can only be carried out if the supply of tour guides owned by the tour guide service business entity is not sufficient to meet the existing needs. A tour guide service business entity is required to employ tour guides who have met the applicable skill requirements and continue to strive to improve the skills of the tour guides concerned.

Convention services, incentive travel and exhibitions

Convention services, incentive trips and exhibitions are organized by Limited Liability Companies or Cooperatives. Business entities providing convention, incentive travel and exhibition services must meet the requirements of at least having professional personnel in sufficient quantity and quality and having a permanent office equipped with business support facilities. Convention, incentive travel and exhibition service business activities include:

  • organizing convention activities;
  • planning, preparation and implementation of incentive travel programs;
  • planning and organizing exhibitions;
  • preparation and coordination of tourism implementation before, during and after the convention;
  • providing secretarial services for organizing conventions, incentive trips and exhibitions; and
  • other activities to meet the needs of convention participants, incentive trips and exhibitions.

Convention, incentive travel and exhibition service business entities are obligated to fulfill the type and quality of services packaged and/or promised in the offer for organizing conventions, incentive trips and exhibitions and administering the necessary permits for the organization of convention and exhibition activities in accordance with the prevailing laws and regulations. Convention, incentive travel and exhibition service companies are responsible for the safety of tourists who travel based on the incentive travel programs they sell.

Impresario service business

The impresario service business is run by a Limited Liability Company or Cooperative. An impresario service business entity must meet the requirements of at least having professional personnel in sufficient quantity and quality and having a permanent office equipped with business support facilities. Article 28 Impresario service business activities include:

  • management and organization of entertainment performances by Indonesian artists, artists and sportsmen who perform domestically and or abroad;
  • management and organization of entertainment performances by foreign artists, artists and sportsmen who travel in Indonesia;
  • arranging travel documents, accommodation, transportation for artists, artists and sportsmen who will hold entertainment performances; and
  • organizing promotional activities and publication of performances.
  • Impresario service business entities are required to:
  • preserving Indonesian cultural arts;
  • pay attention to religious values, customs, views and values ​​that live in society, and prevent violations of decency and public order; and
  • take care of the necessary permits for the organization of official entertainment performances in accordance with the applicable laws and regulations.

The impresario service business entity is responsible for the integrity of the performance and the interests of the artist, artist and/or sportsman who performs entertainment performances organized by the business entity.

Tourism consulting services

The tourism consulting service business is organized by a Limited Liability Company or Cooperative. A tourism consulting service business entity was established solely to provide consulting services in the tourism sector. A tourism consulting service business entity must meet the requirements of at least having a permanent office equipped with business support facilities and having experts in accordance with the field of work carried out. The business activities of tourism consulting services include the delivery of views, suggestions, preparation of feasibility studies, planning, supervision, management and research in tourism sector. The tourism consulting service business entity must guarantee and be responsible for the quality of the consulting services provided and continuously make efforts to improve the professionalism of the experts working for the company.

Tourism information service business

The tourism information service business is organized by a Limited Liability Company or Cooperative. In addition, tourism information service businesses can also be organized by individuals or social groups in the community. A tourism information service business entity must at least have a permanent office equipped with business support facilities. Tourism information service business activities include

  • providing information on tourism objects and tariffs, tourism facilities, transportation tourism services, and other information required by tourists;
  • dissemination of information about tourism businesses or other information needed by tourists through print media, electronic media or other communication media; and
  • providing information regarding booking services, accommodation, restaurants, flights, land transportation and sea transportation.

The tourism information service business operator is responsible for the correctness of the information provided.

Awards for tourism business activities

Every individual, tourism organization, government institution and business entity that has outstanding achievements or contributed greatly in their participation in promoting development, pioneering and service in the field of tourism which can be proven by concrete facts will be rewarded. The award is given by the government or other trusted institution. The award can be in the form of giving a certificate, money, or other forms of reward that are useful.

Licensing

Based on Article 1 PP No. 5/2021 Risk-Based Business Licensing is a Business Licensing based on the level of business activity Risk. Risk is the potential for injury or loss from a hazard or a combination of the possibilities and consequences of a hazard. Furthermore, Article 6 Paragraph 3 stipulates that the Risk-Based Business Licensing in each sector as referred to in paragraph (2) includes setting the relevant Indonesian Standard Industrial Classification (KBLI)/KBLI code, KBLI title, scope of activities, Risk parameters, Risk level, Business Licensing, time period, validity period, and authority. The distribution of permit risk for each sector is categorized into 4 categories, namely: Low Risk, Medium Low, Medium High, High. Tourism Sector Risk-Based Business Licensing Requirements refer to the KBLI selected by the applicant by considering the Risk level analysis by the KBLI system. To find out what are the requirements of each tourism sector according to the KBLI, you can refer to this link.

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