National tourism bodies in Asia have been working with online travel agencies, tours and activity platforms, and online bedbanks to drive bookings through campaigns or promotions, that’s nothing new.

But a one-year collaboration between ridehailing service Grab and Indonesia’s tourism ministry is unprecedented. It shows how ridehailing platforms may be the new WeChat in the super app race in Asia, and that the region’s national tourism bodies are waking up to opportunities to work with them.

Grab, which is on track to raise over $3 billion in funding by the end of the year, has a mission statement of “bringing Southeast Asians closer to what matters to them.” That includes travel, aside from delivering transport, food, parcels and groceries, which it does currently. The region has more than 640 million people, larger than the European Union or North America, and a bulging middle class which loves to travel. Over half of the population is millennials and, with over 700 million mobile connections, it’s a mobile-first world.

The Indonesia tie-up, officially launched in Singapore on November 15, sees Grab foraying into destination marketing, tourism infrastructure building, and eventually travel bookings. That is a scale deeper than a three-month digital marketing contract that the ministry signed with Expedia in October to promote bookings to Indonesia, and to allow visitors to book trips to Indonesia on its website via Expedia sites in Singapore, South Korea and Japan through an API.

An Early Glimpse of Grab’s Move into Travel Services

When Singapore residents open their Grab app, it also now features “10 Irresistible Places in Indonesia.” A click on “Wonderful Indonesia Website” opens the ministry’s website where they can get pretty comprehensive and interesting content on the country’s destinations, attractions, events & festivals, and book a trip on the app, with flights, hotels, packages and activities powered by Expedia based on the above agreement.

Keen to go to an event or festival? By this month’s end, customers will be able to buy the ticket or book a ride to the event or festival on the app.

At present, Grab does not earn commissions from those bookings. Ridzki Kramadibrata, its Indonesia managing director, said, “We are just a channel right now, but it’s not something we don’t think about.”

As well, with Booking Holdings taking a $200 million stake in Grab, he said: “We could pull packages from Booking for this and the booking engine could be on our engine, making the process more seamless. That’s what we envision will happen by the time we integrate Booking in the first quarter of 2019.”

Meanwhile, Grab is working with the ministry to offer “Rent a GrabCar” packages and to train drivers to be certified tour guides. Rent a GrabCar is booked by hours (four to 12 hours) and is available in Jakarta, Bandung, Yogyakarta, Bali, Surabaya, Manado, and Makassar.

Anyone who has ever tried renting a car in Indonesia will attest that a Rent a GrabCar service is in itself a coup. “It’s one of the pain points the ministry wants to resolve,” said Kramadibrata. “It’s hard to find a rental car, you don’t know if you’re paying the right price, if it is safe — it’s so opaque. With Grab, it is on-demand, the driver is with you and the price is transparent, including fuel and gas costs.

“We’re also partnering the ministry to equip the drivers with proper knowledge of the popular tourist spots and the relevant events and festivals in those cities.”

Grab is even building digital facilities, including charging stations and WI-Fi, for tourists at airport lounges and tourist information centers, and shelters as designated pick-up/drop-off points for tourists in must-see attractions such as the Garuda Wisnu Kencana Cultural Park in Bali or the Prambanan Temple in Yogyakarta.

Following the Singapore launch, the partners will go on to promote Indonesia in Malaysia, the next biggest contributor of tourists to Indonesia, then Thailand, the Philippines, Vietnam, Myanmar and Cambodia (Grab does not operate in Laos and Brunei).

According to Kramadibrata, neither party is putting additional investment into the partnership than what it is already doing on its own to advance its respective cause in the market. Consider, for example, Grab’s setting up of digital facilities and shelters in Indonesia, or the ministry’s tactical campaigns related to its Wonderful Indonesia branding.

For Grab, the partnership also strengthens its branding in Indonesia, where homegrown Go-Jek holds sway. It also comes at a time when Go-Jek is launching its beta mobile app in Singapore before Christmas.

When in A Hurry, Hitch A Ride

Indonesia’s tourism minister Arief Yahya, answering questions from Skift during the Singapore launch, shows he’s a man in a hurry. The government has tasked him to double arrivals from 10 million to 20 million in his five-year term which ends in October 2019, along with an expectation of over $20 billion tourism earnings, which would for the first time surpass the biggest earner, crude palm oil.

“That means we have to grow by at least 20 percent per year. Last year we achieved 14 million and we’re targeting a 21 percent increase this year to 17 million,” he said.

But this year is proving challenging. Terror attacks in and around Surabaya in May, and a series of earthquakes in Central Sulawesi in September and Lombok in August, clearly had a part to play.

Yahya said his priority is “go digital”, spending 70 percent of promotional budget with digital players — “Google, Baidu, TripAdvisor, Expedia, almost every one of them”.

“The customer is changing. They are more mobile, more personalized, more interactive. Over 70 percent are using digital, so we have to change, there is no other way. And if we have to grow by 20 percent or more, we believe Grab is one of our best partners to achieve that target,” he said.

He pointed out that Indonesia is not getting its full share of the Southeast Asian market. “Fifty percent of Southeast Asians travel intra-ASEAN but Indonesia only receives 40 percent from ASEAN.

“Secondly, our survey shows 50 percent of those who visit Indonesia are millennials and they are more digital in their ways. They are used to ride-hailing apps.

“Besides, our partnership with Grab can be implemented immediately,” he said.

Photo Credit: Indonesia's tourism minister Arief Yahya (left) with Grab's managing director Indonesia Ridzki Kramadibrata launching the partnership in Singapore. Source: Grab Grab