Harumbi Prastya Hidayahningrum, Jakarta – Indonesia is seeing fewer homecoming travelers this Eid holiday, and an analyst believes that the stalling small enterprises is what might have caused this drop.

Every Eid, countless Indonesians will go back to their hometowns, causing a massive exodus all over the country. The government estimates show that 146.48 million people will travel. While this is equivalent to 52 percent of the total population, it marks a 24 percent decline from the 193.6 million Eid travelers recorded last year. Fewer holidaymakers could mean a smaller Eid economy for Indonesia, which is trying to pursue an 8 percent annual growth within the next few years.

Bhima Yudhistira, the executive director at the think-tank Celios, said that people's income – particularly the micro, small, and medium enterprises (MSMEs) – is currently on a decline. As people earn less money, many decide to cancel their travel plans.

"People's income is decreasing, especially for the street vendors, informal traders, and MSMEs. When turnover drops, people feel that it is better not to travel during the Eid holidays," Bhima said on Thursday.

On the other hand, people working in the formal sector choose to save their Eid bonuses in case of layoffs. Indonesian workers typically receive a bonus equal to one month's wage during Eid. However, Indonesia is currently witnessing waves of layoffs across various sectors. The fewer Eid vacationers are set to take a toll on the businesses, particularly those in the hometowns, according to Bhima.

The expert warned that the decline in Eid travelers could affect Indonesia's annual growth.

Amid the weakening Eid economy, Bhima advised the government against making policies that may distort the people's purchasing power.

He went on to say how President Prabowo Subianto's budget austerity measures had led to dire consequences. Prabowo instructed his government to reduce spending by Rp 306.69 trillion (approximately $18.5 billion) for the current fiscal year. According to Bhima, the government should consider extending the electricity discounts. Indonesia should also make sure that its social assistance is going to the right people.

Source: https://jakartaglobe.id/business/stalling-small-enterprises-lead-to-drop-in-eid-travelers-analys