Good Corporate Governance

Risk Management Policy

RISK MANAGEMENT POLICY

In carrying out its business activities, ABT Travel is inseparable from various kinds of risks that can affect business performance. The following business risks and general risks are material risks for ABT Travel. These risks have been compiled based on weighting of risks that have the greatest impact to the least impact on ABT Travel's business performance and financial performance. To minimize these risks, the Company carries out risk management, including:

Main Risks That Have a Significant Effect on the Continuity of ABT Travel's Business Activities

  • Government Policy Risk
    To mitigate the risk of changing government policies, the company tries to be active in associations that are partners with the government, to voice dialogue with the association before the policy is implemented. So that ABT Travel can get information earlier which can reduce greater business risks. In addition, the company targets that the hotel room rental market for Madinah and Mecca is not only for Indonesian citizens. However, it also includes markets outside Indonesia, such as Malaysia, Thailand, the Philippines, Pakistan, Bangladesh, India, Australia, New Zealand, and countries where the population is Muslim.

    With the exception of government policies (either the government of the Republic of Indonesia or Saudi Arabia) which are of an extraordinary nature such as termination of diplomatic relations, war, pandemics and the like, there is no government policy that has a direct impact on the Company's business and investment activities. Meanwhile, government policies and other institutions in the fields of fiscal, monetary, public economy, and politics that have an indirect impact on the Company's business activities and investments:

  • Business Competition Risk
    The making of futures contracts 5 to 10 is one of the strategies implemented to anticipate this risk, especially for hotels close to the Grand Mosque in Mecca and the Prophet's Mosque in Medina. In addition, the contract price negotiation strategy and Saudi Arabia's local cultural approach will also be implemented. Such as negotiations with hotel owners carried out by people who have lived for a long time in Mecca and Medina (understand the local language and culture).

Business-Related Risks

  • Human Resources Risk
    In mitigating this risk, there are several things that are carried out by the Company. To risk shortages or loss of human resources with expertise in information technology, the Company built a technology infrastructure that has several separate modules and provides management of each module to different employees. So that if an employee resigns, it will not affect the Company's system as a whole. In addition, the Company also provides relatively competitive awards and facilities to prevent high employee turnover. Meanwhile, for the risk of HR quality not in accordance with the standards set by the Company, especially travel assistants, the Company always asks for feedback from consumers and provides incentives for travel assistants to always improve service quality and other capabilities.
  • Reputation Risk of Business Partners
    To mitigate this risk, the Company strives to always choose partners with good track records. In addition, the Company also conducts education both in person and online for business partners to always maintain the reputation of the partners, which will also have an impact on the business development of the partners themselves.
  • Exchange Rate Risk
    Exchange rate risk often occurs in companies managing the Umrah worship where transactions related to Umrah pilgrimage activities are carried out in three different currencies, namely Rupiah (Rp), US Dollar (USD), and Saudi Arabian Real (SAR). To mitigate this risk, the Company is hedging.
  • Risk of Contract Cancellation
    The occurrence of contract price offers that are more than the company's competitors to hotel owners who are contracted by the Company is one of the main causes of this risk. In addition, there was also a sudden cancellation by the ticket orderer after inserting the name (Insert Name) which resulted in the ticket not being refunded. To mitigate this risk, the Company makes contracts for medium and long terms where a year before the contract is completed the company can automatically renew the contract. To maintain good relations, the Company makes rules / policies related to order cancellation by the customer where the customer bears 100% of the ticket value.

General Risk

  • Liquidity Risk
    To trigger faster payment due from customers, the company will implement a price discount strategy. For example, customers are allowed to be able to book more hotel rooms at a lower price but will be given an option with an early payment due so that it will improve the conversion period for trade accounts receivable. In addition, negotiating strategies with vendors to provide a longer tempo, including holding more than one supplier.
  • Currency Fluctuation Risk
    One of the mitigations that the company will implement is hedging for transactions in foreign currencies. Although the inflation rate and the Price Consumption Index (PCI) in Saudi Arabia are relatively stable.
  • Risk of Termination of Contract
    In the contract, it must state that the termination of the employment contract occurs if it is comprehensive in nature which can prevent the achievement of the revenue projections that have been made by the Company previously and can result in business disruption, especially in Full Rental Hotels and hotel room allotments.
  • Risk of Employee Strike
    The Company is highly committed to following the applicable labor regulations, including providing additional incentives for employees such as annual bonuses outside of remuneration or monthly compensation.

OUR SERVICES

Hotel rooms in the City of Mecca and Medina to fulfill all the needs of the Umrah and Hajj pilgrims while in the Holy Land.

Serving all handling, guide / muthawif needs as well as modes of transportation for the needs of the congregation for the organizers of the Umrah and Hajj pilgrimages.

Booking airline group tickets is easier and of course cheaper through our services.