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How This Indonesian Startup is Balancing Profit and Social Impact in Sustainable Tourism Sector?

Jinny Kim

August 29, 2024

Wise Steps: Building Circular Destinations in Indonesia for Sustainable Tourism

As global trends shift towards more sustainable and meaningful travel experiences, the sustainable tourism sector is growing remarkably with the global sustainable tourism market expected to reach $249.16 billion in 2024, a 13.5% increase from the previous year. Projections suggest this figure could soar to $428.97 billion by 2028.

Indonesia, with its rich biodiversity and cultural heritage, is particularly well-positioned to capitalize on this trend. The country's sustainable tourism industry, valued at $17.4 billion in 2024, is projected to expand at an impressive CAGR of 27.3%, potentially reaching $195 billion by 2034.

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Wise Steps Group is an Indonesian social enterprise that provides sustainable travel and tourism services , while creating economic opportunities around education, employment, entrepreneurship, and environment(4 E’s) programs through its foundation.

We met Ayu Masita, the co-founder of Wise Steps Group and the executive director of Wise Steps Foundation, to follow their meaningful journey.

With her 13-year career in the nonprofit sector, she is leading the transformation of the tourism industry in Indonesia by communicating and cooperating with communities, the government, and other stakeholders. We discussed how the group works, what the circular economy is, how the sustainability tourism services and programs operate and many more.

‍“How does Wise Steps Group operate? Why have you become a sustainable tourism company? How are sustainability and tourism connected? What is the circular economy and how does it work? What can be the role of Wise Steps Foundation in the Indonesian tourism industry? How do you keep the balance between the business and social impact?”

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How Wise Steps Runs to Make Impact

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Q. How did the Wise Steps start?

We set up the company in March 2017. At that time, I was still working for a non-profit organization focused on sustainable tourism development. I met the co-founder, Matteo Bierschneider, whose background is in sustainable tourism and who was working for a profit-oriented travel company.

We discussed how we realized that the non-profit sector needed more social enterprises, as there are limitations in securing funds from various sources. We also met another co-founder, Mochamad Nalendra, who was interested in sustainable tourism and development and focused on consulting in this area. That’s how we got started.

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Q. How has the whole journey been since you’ve started?

We were lucky to grow dramatically from 2018 to 2020. However, the COVID pandemic occurred, and the travel industry suddenly went into hibernation. We had to stop our plans and had to tell our employees to either work part-time at Wise Steps or leave. As no one knew how long it would last, most of them left. It was a really hard time for us.

At the same time, as I was running the foundation, we received various funded programs to support tourism villages and workers who got impacted from the pandemic. A handful of NGO from all over the world and government institutions, including KOICA(Korea International Cooperation Agency), supported tourism villages and guides quite heavily through our foundation. It was extremely helpful for us because we didn’t have any clients for our travel and consulting business.

After the pandemic, the foundation is getting funded but the main resources are from our own business. It’s alive again and it’s going well. Currently, we are conducting many projects with the government and private partners to focus on the domestic market.

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Q. So there are Travel, Consulting and Foundation in the group, right? How does it run?

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‍Yes, we refer to these as divisions based on our own expertise. Each division's leaders have expertise in their respective sectors, just like I do. I oversee finance and HR internally, and my day-to-day job is to lead our foundation to ensure social and environmental impacts are delivered and communities are benefiting from tourism development in selected destinations..

When it comes to the business part, the Travel and Consulting divisions help our foundation. They provide 5-10% of their profit to the foundation so that we can implement the social impact programs.

Of course, the foundation supports them as well. For example, one of our foundation's programs provides scholarships for students who want to study tourism. Some of these students come to the Travel division to become interns.

Additionally, our foundation collaborates with the Consulting division on a program to work with communities, providing more responsibly made products and souvenirs, such as cleaning products. We suggest hospitality industry to recycle their waste to remake them into souvenirs or hotel amenities

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Q. What’s the impact of this cooperation to the whole ecosystem?

‍We are filling the gap and creating opportunities between communities and tourism companies. As I mentioned earlier, we gather the liquid soaps that remain from hospitality companies, such as hotels, and bring some to women who haven’t been able to work for their families so they can recycle them into solid soap.

Also, we deliver workshops to the communities to make recycled materials such as bottles and plastics. We give them the opportunities to sell those products to the hospitality companies and the tourists. It’s the virtuous circle.

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Wise Steps’ Journey to Pursue Sustainable Tourism

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Q. What’s the difference between ecotourism and sustainable tourism?

Eco-tourism is about nature-friendly travel. On the other hand, sustainable tourism, in which Wise Steps operates, is broader and deeper than that it involves engaging with the tourism industry responsibly. It’s also closely related to the circular economy that we aim to achieve.

We only choose partner hotels that care about the environment. They strive to reduce food waste and work with local communities. We also assess whether the hotels prioritize environmental and community concerns for our clients. If they do not, we suggest alternative hotels to our clients. I believe this is very important. If the clients or tourists traveling with us can think more about sustainability, responsibility, and the lives around them, then we have achieved our goal.

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Q. Could you tell us your initial story to compare it with the current version of yourself?

We didn’t focus on a certain target market but the whole Indonesia at first. So it was too big for us to make and feel the impact. And it was hard to do workshops everywhere. Then, we happened to host workshops in Lombok many times so we decided to settle here.

Also, we started our company from zero base and we had to not only follow the trend but also align with our passion for sustainability as we wanted to transform people’s minds about the travel industry.

So at the very beginning, we focused more on the revenue to try diverse markets and offered fancy travel packages to the clients. However, during the pandemic, we realized what’s important for us and people to decide to focus sharply on sustainability. Of course, we followed what our clients wanted before and during the pandemic because we were in survival mode.

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Now, the foundation is based in Lombok and concentrating on the four areas - education, employment, entrepreneurship and environment. We take the projects and programs only when they support these four areas. It’s possible as we can run our company independently with our passion. The Consulting division is also mainly focusing on sustainability tourism and developing circular destinations based on the roadmap on how Indonesia will reach sustainability in years.

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Q. What was your personal passion like as a co-founder and the leader of the foundation?

Tourism can be engaged in various sectors, such as forestry, fishery, astronomy, and even medicine. Sustainability can be applied to any sector, including tourism. For me, this was actually the reason I became interested in tourism, as I was looking for something that connects different sectors.

I believed that tourism and education were those kinds of sectors. Even now, they remain my main interests, as the foundation runs many educational programs, such as training, workshops, and mentorships for communities and stakeholders. That’s how I combine these two areas in my work.

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For example, the Wise Steps Foundation has an environmental program that collects food waste from the tourism industry, including restaurants. We then turn this waste into chicken feed and sell the chickens to restaurants involved in the tourism industry. In this way, we engage in poultry and organic agriculture as a sustainable tourism company, contributing to a circular economy.

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Q. Then, what can be done to be sustainable?

It’s rather simple. There are many different aspects you can change, and it requires careful consideration.

The communities can also make a big difference, by collaborating with the hospitality industry and waste banks to recycle waste to develop souvenirs or hotel amenities and sell back to the hospitality industry or directly to tourists.

To do this, we are engaging stakeholders such as the government, tourism communities, and the nonprofit sector. We encourage them to adopt a sustainable lifestyle.

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Role of Wise Steps in Building Circular Economy

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Q. How do you communicate with the stakeholders?

Yes. Actually, communicating actively with stakeholders is very beneficial for Wise Steps. We are working with diverse stakeholders that’s related to sustainable tourism such as tourists, private industry, government and communities. Therefore, we understand their real needs.

‍Thanks to this, we understand the current trends and needs, as well as know how to approach and influence them to achieve sustainable tourism together. This approach enriches us in terms of know-how, collaboration, and information. We are lucky to have various perspectives and experts to communicate with.

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Q. How do you approach, for example?

I believe we are rebuilding the ecosystem. We are giving the incentive to the stakeholders to make them go in the direction that can support and achieve sustainable tourism.

Here’s another example: our Consulting division is collaborating with the government to design a circular economic village, then the pilot project can be conducted in the village where our Foundation has been working with, and to ensure continuity, the Travel division will offer a visit or workshop for tourists in that selected village.

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Q. How can you play this role making a social impact? What’s your strategy?

It’s thanks to our structure.

Firstly, there are divisions responsible for generating profits, not only to grow the business but also to fund the foundation to conduct social impact projects and programs. As I mentioned earlier, the Travel and Consulting divisions make profits through their services that are channeled to the foundation. The foundation can then focus on the 4E’s programs. Of course, we have donors, but we are not solely dependent on them.
Secondly, it’s important to have a division that focuses on impact. Otherwise, it’s difficult to maintain impact mapping. There must be a division that keeps track of these elements and ensures they are achieved. Additionally, they need a talent or expert who understands both the business and non-profit sectors.

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Q. What’s Wise Steps’ unique position in building circular destinations in Indonesia?

Every division has its role in making Wise Steps richer in knowledge and information. For example, if there’s a project to build a circular tourism village, the Consulting division will provide perspectives from policy makers and the industry, while the Foundation considers the need at the grassroots level, what the community needs, and what they currently do, lastly the Travel division can consider the interests of tourists.

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Q. What is the goal of Wise Steps?

Hopefully, we will build a center where everyone can come to learn and discuss the circular economy and sustainable development. At the center, we can provide workshops, training for stakeholders including travelers, leaders from the various industries and government. We are hiring the locals as trainers as well. It will be in the next 2~3 years.

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Q. Please give some advice for social entrepreneurs in the early stage.

It’s extremely important to have one team or some experts who are dedicated to the social impact. You need someone with relevant background to map the plan, implement it and keep track of it which is a lot of work with an enormous amount of research.

I know running business itself is already challenging but you should remember that social impact is still aligned and make sure that the whole company is understanding it well.

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Interviewed by Jinny Kim (ud.)

Written by May Jang (Link)

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