As global travel brands eye growth in Africa’s online travel agency (OTA) market, concerns have been raised about the impact of the increased competition on local businesses.
Speaking on a panel discussion at the recent WiT (Web in Travel) Africa event in Cape Town on March 13 on the topic of ‘Leapfrogging into the Next Generation’, Albert Fernanda, CEO of Travel Wings, emphasises that while concerns exist, the presence of global brands could accelerate market development. “South Africa is quite mature, East Africa is growing, West Africa is way behind, and Central and North Africa offer many opportunities. The market is quite big. We shouldn’t be concerned – it helps to grow ourselves.”
Andy Hedley, MD of Travelstart, echoes this sentiment, seeing competition as a motivator. “They keep us on our toes. We have the advantage in that we are in Africa; we understand the complexities and differences. We have a good head start – and I can’t see them catching up; they are too far behind.”
Growth beyond air
While many OTAs have primarily focused on air, there is a growing realisation that diversification is key in order to survive amidst increased competition. Hedley pointed out that South Africa’s leisure market is reaching its limits. “Big players have been interested in South Africa and trying to come in, but there’s a limit to where you can go as a purely leisure-focused OTA. You have to expand your verticals. Cars are a big thing for South Africans travelling abroad, and we haven’t really tapped into that market yet.”
Bayo Adedeji, Group CEO of Nigeria-based OTA Wakanow, highlights a different challenge – the dominance of global giants in marketing. “We can’t win against Expedia and Google on marketing spend – we have to outthink them. For example, we go door-to-door to approach hotels.” The panel explained that distribution works differently in Africa, with few companies having dedicated channel managers, so the contracting process is still about physically approaching each property on an individual, in-person basis.
Another factor that will impact global players’ success in Africa is whether they are able to have flexibility in their policies. Hedley points out that in order to operate effectively, international OTAs will have to be willing to make exceptions to global policies. “Most won’t be able to do business as they usually do,” he adds.
