Permanent shift

Permanent shift

Food and hospitality business expects some pandemic-era changes to take root over the long term in Indonesia.

Indonesia's culinary and tourism sectors are changing the way they do business as they cope with the ways in which the Covid-19 pandemic has has drastically transformed customer behaviour and battered the economy.

Some of the changes are expected to linger long after the virus has receded, even though social and travel restrictions have been gradually eased and tourism destinations such as Bali are putting out the welcome mat again.

"There will be no more mass tourism and it will change course to quality tourism," National Development Planning Minister Suharso Monoarfa said last Tuesday during an online forum about Bali's reopening plans.

Bali embarked on the second phase of its recovery plan by welcoming tourists from other parts of Indonesia on July 31, after a first-phase reopening for island residents.

It is scheduled to begin the third and last phase on Sept 11 by reopening to foreign tourists. However, it remains unclear whether the central government will revoke a regulation that bans foreigners except those with essential business as part of the country's coronavirus control measures.

I Made Badra, head of the tourism agency of Badung regency, where Bali's major tourism spots are located, said authorities on the island are preparing to hold a major event to mark the Sept 11 reopening and they expect President Joko Widodo to attend.

"All our stakeholders will implement clean, healthy, safe and environmentally sustainable concepts in their practices as we adapt the new behaviour in accordance with World Health Organization guidelines," Mr Badra said at a webinar held on July 17 to discuss the tourism outlook. For example, he said, venues should only accommodate half of their total capacity and maintain social distancing between visitors.

"In the future, it will not be business as usual anymore as we adapt to what nature sets down for us," he added. "The main concern will be about quality of service in keeping with the current situation in pandemic times. We will enforce health protocols everywhere so that people will be more aware about it."

Badung regency is encouraging collaboration between the farming and tourism sectors on the island so that hotels and restaurants can source food ingredients locally, with farmers focusing on providing a sustainable supply.

"We will consult and cooperate with chefs to make sure local produce meets their standards," Mr Badra said.

The fallout from the pandemic caused Indonesia's economic growth to contract in the second quarter of this year by 5.3% year-on-year. The country has recorded nearly 117,000 cases of Covid-19 and 5,452 deaths as of last Thursday.

Data from Statistics Indonesia also showed that foreign tourist arrivals as of May had plunged 86.9% year-on-year, while the central bank said the revenue stream from tourism had contracted by 97.3%.

"The adverse impact of the pandemic is real in all sectors, especially tourism. Now it is time for us to recover the economy and today is a momentous day as we reopen Bali for tourists," Coordinating Minister for Maritime Affairs and Investment, Luhut Pandjaitan, said at a ceremony on the island on July 31.

Most of Bali's regions are classified as green zones, meaning they have had low or no infections for a certain period of time. This is the main consideration behind the government's decision to reopen the island.

Hotels and restaurants in the country suffered losses estimated at a whopping 85 trillion rupiah (US$5.8 billion) following the halt in economic activity, Hariyadi Sukamdani, the chairman of the Indonesian Hotel and Restaurant Association (PHRI), told lawmakers in mid-July.

But not all is doom and gloom in the culinary business. Some players have found a silver lining amid the pandemic and their their businesses are growing, said Stefani Kurniadi, a food and beverage entrepreneur and a panelist who took part in the July 17 webinar.

"It depends on their business models. A few months into the pandemic, those that focus on frozen food, healthy food, and other types of food that match the shift in consumer behaviour have seen their businesses thriving," said Ms Kurniadi, the founder of the F&B education platform, Foodizz.id.

The pivot was inevitable as they could no longer rely on the pre-pandemic, traditional market strategy, such as aiming to have a location near office buildings or campuses where potential customers were found.

"Now people are home most of the time. So business players have to be around them. The customers are the same, they consume the same stuff, except their behaviour has changed. People still drink coffee but they no longer sit in coffee shops for hours with friends to enjoy it," she said.

Having an online presence, signing up with a food delivery service or using a cloud kitchen are some of the keys for a business to survive.

The move to online ordering and delivery has become a new revenue stream for many businesses, even though some have seen revenues flowing back from their dine-in outlets as social restrictions are eased, she said.

In any case, gaining customers' trust is paramount. This includes ensuring safety and hygiene in food preparation and delivery, and communicating this well to their customers, Ms Kurniadi said, adding that maintaining a constant online presence is also essential to generate more revenue.

"What people see in their digital platforms may inspire them in terms of what they want to eat for lunch or dinner. … We don't want to lose their business just because they can't get our products through online channels."

As the pandemic is set to linger for an unforeseeable future in the absence of a vaccine, large weddings and corporate events, which used to be a major revenue stream, seem to be off the menu, said Stefu Santoso, a professional chef and President of the Association of Culinary Professionals of Indonesia.

"On the positive side, retail food business is on the rise. Lunch boxes, frozen food and comfort food in accordance with local tastes will also be business mainstays," Chef Santoso said. He cited an example from a European colleague whose fine dining establishment has switched to serving burgers as it is the comfort food that the restaurant's customers prefer at the moment.

"We can't be too idealistic, we have to adapt by offering a daily menu in accordance with current market demands," he said. "We must also be more considerate about price given customers' lower spending power and reduce the price margin as long as it is sufficient to survive."

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