More affordable pricing needed to grow local market
ALTHOUGH the South
African domestic market
remains under pressure
since the global financial
crisis, Tourism Minister, Derek
Hanekom, says it is possible
to achieve the target of 18
million domestic tourists by
2020.
At the launch of Tourism
Month, the minister warned
that, to achieve the target,
“we will have to work hard
to ensure that tourism is
more affordable and more
accessible to all South
Africans”.
Wayne Neath, acting
national and international
sales manager for Premier
Hotels & Resorts, says it
is possible to reach the
minister’s target by 2020 by
offering creative packaging
and value-for-money
experiences that speak
directly to South Africa’s varied
cultures. “Where there is a
belief and a collective effort,
the desired result will be
achieved.”
According to Wayne, the
travel industry must define
affordability according to local
perceptions and the target
market within South Africa.
“Overall we all need to look
at our pricing strategy bearing
in mind our sustainability.
To say where pricing should
drop is an anomaly in itself.
However I do believe there is
scope for all travel partners
to contribute in a combined,
revised pricing strategy.”
Amadea Sunney, Holiday
Tours product manager, agrees
that travel offerings need to
speak simultaneously to a
target market’s needs and
budget. “If the cost of the
offer is not affordable to the
consumer, they simply will not
book.”
Amadea says many tourism
stakeholders push lastminute
offers to cover costs
on distressed inventory.
“The cost depends on yield
management, but based on
trends and forecasts, these
stakeholders know when they
will need to push for sales,
which they traditionally do on
a last-minute basis. If they
changed their strategy and
promoted well in advance,
the perception that the cost
of travel in South Africa is
not always affordable would
change.”
Bulelwa Koyana, SATC
ceo, agrees that it is
important for local suppliers
to develop competitively
priced products. She says,
to achieve the targets set by
the minister, more affordable
tourism products will have
to be offered to a new target
audience. “Domestic tourism
will definitely need to become
more affordable if we are to
grow the number of travellers.”
Bulelwa says airfares
can play a role in making
travel more affordable but,
considering the pressures
the airline industry is
under, she does not see a
significant drop in the near
future. “However, the industry
can be creative in as far
as affordable products are
concerned. For instance,
promoting attractive self-drive
options to undiscovered local
destinations would allow more
prospective travellers to take
up such offers.”
According to Tlali Tlali,
spokesperson for SAA, the
airline industry is actively
working to make domestic
travel more affordable. “SAA
supports stimulating tourism
through affordable ticket
prices, which is subject to
variables such as type of
package on offer, product
requirement, seasonality,
destination and class of travel
and taxes. Some of these
variables are outside the
control of the airline. However,
with our tourism partners,
we will continue to look
for opportunities to create
packages that offer value to
the consumer with added
benefits like spa discoun.
more attractive.”
Tlali says there is still
untapped potential for
domestic travel, especially
in the younger age groups.
“Domestic travel will continue
to grow due to its affordability
compared with international
travel. When consumers
encounter economic
challenges due to external or
local factors, they will always
travel but look at more costeffective
ways.”
According to Martin Lydall,
chief commercial officer of
Europcar, from a car-rental
point of view, SA is already
one of the most competitive
markets in the world.
The minister has allocated
R100m to boost SA Tourism’s
domestic tourism marketing
efforts for the 2015/16
financial year, an initiative that
has been welcomed by the
travel industry.
According to South African
Tourism ceo, Thulani Nzima,
the R100m will be split
between efforts to create
awareness of the culture of
travel, driving conversion and
ultimately leading to more
people travelling.
Thulani says there has
been an 8% decrease in
domestic tourism in recent
years. Although statistics are
now on the up, he says: “Any
additional investment toward
promoting domestic tourism
will provide the opportunity to
help reduce the current trend
by stabilising the domestic
tourism footprint in South
Africa. This will be achieved
through reaching a broader
audience via suitable touchpoints
such as advertising,
social media and public
relations.”
Tlali says marketing is
always welcome to drive
domestic tourism growth
and further raise awareness
around the affordability of
domestic travel. “The middle
class in South Africa is
growing rapidly and, though
most industries are benefiting
from this market, tourism is
lagging.”
Wayne says: “Our country
is rich with opportunities and
marketing will aid in changing
perceptions and enhancing the
value of discovering our own
extremely diverse country.” He
says many of the people he
speaks to don’t know about
all the beautiful locations in
South Africa. “In general, the
vast amount of South Africans
don’t know much about their
own country.”
Thulani says the growth of
domestic tourism can only be
achieved through the close
collaboration and synergy
between national government,
provincial and local tourism
authorities. “Tourism is
everybody’s business – it’s a
major driver of GDP growth
and creates and sustains
hundreds of thousands of
jobs and is the livelihood of
millions of South Africans.
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Short stay
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Whale Coast Hermanus
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A special of R3 159pps
ex-Johannesburg (R2 905
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It includes return economyclass
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with 200km free per day.
Three Cities Le
Franschhoek Hotel & Spa:
A special of R3 965pps for
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price is R4 069pps. Return
economy-class flights from
OR Tambo or Lanseria to
Cape Town, and three days’
car rental (Group T) on
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Travellers will also receive
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Supplements apply on peak
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Garden Court South Beach:
At R3 069pps for three
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three days’ car rental (Group
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the price is R3 159.
Valid from November
1-January 31, but high
season supplements apply
from December 19 to
January 31.
All packages are available
from Holiday Tours.
Earn extra comm!
The Tshwane Events Centre
is offering travel agents the
opportunity to earn some
extra commission if they
refer clients to the centre.
Ricky Da Costa, marketing
manager for the Tshwane
Events Centre, is running
an incentive campaign
for November. During this
period agents can earn an
agency fee of 15% of the
total nett value of a deal
after VAT, for any business
they have referred to the
events centre.
South Africans opt for self-booking
WHILE travellers in the UK
are increasingly turning
to travel agents for their
domestic bookings, the
same trend is not seen yet
in South Africa.
According to research
conducted by the
Association of British Travel
Agents (Abta), one in 10
respondents said they had
booked a domestic holiday
with a high street travel
agent in 2014 (up from 7%
in 2013) and 16% booked
with an online travel agent
(up from 12% in 2013).
However, in South Africa,
industry players say
travellers continue to selfbook
their domestic trips.
Wayne Neath, says: “My
belief is that South Africans
like to be involved in the
process and would like to
be hands-on when booking
their holidays. This is a
major investment for them
and the online platforms
have certainly given South
Africans the resources to
plan, book and review their
holidays personally.”
Martin Lydall agrees
that although travel agents
remain key partners and will
continue to be recognised
professionals by the public,
most people self-book
domestic trips. “Due to the
low levels of disposable
income, the public will
continue to be very price
sensitive, which in turn
increases demand for selfbooked
holidays and is
further facilitated by online
technology improvements,
making this more
transparent and easier.”
Bulelwa Koyana says:
“In the local market, travel
agents can play a role in
assisting travellers with
their arrangements. Given
the cost considerations
though, local travellers are
likely to choose to book
directly to obtain the lowest
prices possible. The more
experienced, less costconscious
travellers are
likely to use the services of
travel agents.”
However, Tlali Tlali says
this trend could soon change
as travel agents often have
access to better prices.
“Depending on the online
technology the travel agents
have as a booking tool, more
people will make use of their
services as they do enjoy
better rates from preferred
tour operators.”
Thulani Nzima agrees
that a great number of
consumers in South Africa
use travel agents because
they have the benefit of
highly negotiated rates,
which make deals and
special packages more
attractive to the end
consumers. He says spikes
have been seen in the use
of travel agents over the
high season in particular,
as well as for event-specific
travel. This is due to travel
agents having access to
accommodation and other
services, which gives them
an advantage over direct
bookings.
He adds that South
Africans in certain Living
Standard Measurement
segments may not all have
access to the Internet and
prefer to use travel agents
or tour operators, taking
advantage of face-to-face
interaction and the ability
to physically go back to the
agent if they need to query
or if they have an issue.
Crunching the numbers
IN 2013, 12 million South
Africans took 25,2 million
domestic trips, contributing
R24,3 billion to the local
economy.
In the first quarter
of 2014, 7,8 million
domestic trips were taken,
which represents a 48%
increase compared with
the 5,3 million trips taken
in the same period in
2013.
As a result of higher
average spend per trip and
more frequent trips taken,
total revenue generated
from domestic tourism
increased from R5,2 billion
in the first quarter in 2013
to R6,4 billion the same
quarter in 2014.
In the second quarter
of 2014, 6,9 million
domestic trips were taken,
which represents a 24%
increase compared with
the 5,5m trips taken
during the same period
in 2013. This resulted in
a 38% increase in total
spend from R5,2 billion to
R7,2 billion.
AHA specials for early birds
African Hotels and
Adventures has implemented
an early-bird special of
R695pps on a bed-andbreakfast
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It is valid from January 5 to
February 15 and is subject
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Payment must be made
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The group has also
introduced a corporate special
for Leisure Bay Luxury Suites
in Cape Town at R990 per
room. The spouse stays free
and only pays for breakfast. It
is valid from January 5 to
March 31, excluding
weekends.
For leisure travellers, there’s
a special of R650pps on a
B&B basis for a minimum twonight
stay that must include
a Saturday night. Payment
for both deals must be made
before December 15.
#Summmer
Woodford Car Hire is running a special promotion for agents and travellers, who stand the chance
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