Embrace the uncertainty
THE impact of a weak
rand and flailing
economy will be one of
the biggest challenges for
sectors across the travel
industry in 2017. However,
agents can embrace this
uncertainty by offering valuefor-money
options when
clients turn to them
for advice.
The performance of the
rand will continue to have
an important impact on
travel this year and will
influence many decisions
for leisure travel, says
Marco Ciocchetti, ceo of
XL Travel Group.
He says because travellers
are looking for affordable
prices, agents should
encourage selling value-formoney
destinations.
“Tough times lie ahead for
the leisure market,” agrees
Joanne Visagie, sales and
marketing manager for
Beachcomber Tours South
Africa.
She says if the rand stays
at rates seen recently,
fewer passengers will travel
overseas.
Corporate
South Africa
also remains
under severe
pressure, which
in turn depresses
demand and
price, says
Martin Lydall,
chief commercial
officer at
Europcar South
Africa. He says
the car-rental
industry has felt
the impact of a weak South
African economy.
“The currency devaluation
and the impact on new car
prices are going to be very
challenging to absorb and
some of this will have to be
passed on to customers.”
Clifford Ross, ceo of the
City Lodge Hotel Group, says
demand will be the main
challenge for hotels next
year. He says this is directly
related to the economy,
business confidence and
investment by the public
and private sectors. “We
need a stronger
economy and
more confidence,
which can then
translate into
more business
– and leisure
– travel. This
will improve
occupancies.”
The current
economic
situation has
seen travellers
cut back on
spend and create
a shopping environment,
says Alexis Bekker, head
of sales and marketing for
South Africa and Africa of
LUX* Resorts & Hotels.
She says this could lead
to ‘price dumping’ in the
market, where competitor
hotels drop rates. “This
causes an issue across
the market as there is no
real benchmark for pricing
against star ratings.” As a
result, travellers don’t know
how to judge reasonable
prices for certain room
categories.
Airline likely to cut capacity
CAPACITY cuts by airlines
could become a reality this
year.
The economy will
more than likely be the
biggest game changer
in 2017 for the airline
industry, says Hein Kaiser,
spokesperson for Mango.
He says anticipated growth
remains flat and economic
conditions will likely remain
tight.
Hein says the local
aviation market will likely
see an increasing fight
for market share. “It is
likely that some low-cost
competitors continue to
price unsustainably,” he
says, and that capacity
reductions in the market are
also likely. “Over-capacity
will impact all airlines again
and economic conditions
will dampen growth
prospects. We expect very
little growth and more than
likely an industry-wide period
of consolidation.”
Locally and internationally
the operating environment
will remain difficult, says
Erik Venter, Comair ceo.
He says measures such as
the introduction of biometric
data gathering at OR
Tambo are also making the
South African environment
challenging.
However, Dean Bibb,
Sabre vp Middle East and
Africa, believes there is
a significant opportunity
for African carriers to
grow brand affinity and
improve areas like checkin
ahead of the African
passport introduction in
2018. “In a recent survey
conducted by Sabre, checkin
dissatisfaction was the
number-one gripe of African
travellers. However, it’s
totally in an airline’s control.
If airlines can fix this using
technology, they’ll grow their
customer base.
The experts’ survival guide for 2017
1. Adapt to new technologies
Agencies still relying on outdated
methods of completing transactions
between wholesalers, suppliers,
distributors and customers could face
serious challenges, says XL Travel’s
Marco Ciocchetti.
Club Travel ceo, Wally Gaynor,
says travel agents will need to open
their minds to what’s happening with
technology and see how they can use it
to get an edge on the competition.
2. Charge for great service
It’s important for travel agents in 2017
to evolve from charging transaction
fees to charging for great service, says
Marco.
“Move from transaction fees to
full consultancy. Fees should not be
associated with the booking or the
transaction, but with high levels of
service, highly detailed consulting and
research, and the incorporation of noncommissionable
value adds.”
3. Sell value, not specials
Annemarie Lexow, sales and
marketing manager of Travel Vision
says people are very cautious where
they spend their money, which makes
it easy for suppliers to lure them with
specials and discounts. She warns,
however: “We have to be careful to
continue offering customers valueadds.
Discounts are only a short-term
solution and not sustainable.”
“Don’t sell just cheap to win a
booking for today but lose a client
forever,” agrees Beachomber’s
Joanne Visagie.
“Rather make sure you find out the
travellers’ needs and sell them a
holiday that will make them happy so
they come back to you next year when
they travel.”
4. Know your worth
Promote your value to corporations
and suppliers, advises Sabre’s Dean
Bibb. “Offer a high-yielding channel
for business travel, and compliance
and security tools that are critical for
corporate travel.”
5. Sell cruises
Consultants who take an interest and
invest their time in understanding and
selling cruises will retain and even
expand their customer base and their
sales, says George Argyropoulos, ceo
of Cruises International. George says a
cruise is one of the very few products
that offer substantial commissions and
is still affordable compared with landbased
alternatives.
6. Don’t discard a destination
For those agents who have the
pleasure of numerous repeat clients,
Lesley Simpson, spokesperson of the
Tourism Authority of Thailand in South
Africa, advises agents not to exclude
Thailand just because clients have
been previously.
“Rather look to another region that
suits their interests, for example Udon
Thani, which is an important regional
hub connecting north-eastern Thailand
with the rest of the country as well
as neighbouring Laos. It has its own
airport so is easily accessible from
Bangkok.”
7. Continue to upskill
“The need for training and upskilling
of staff is still a very important matter
in trying to grow an industry,” says
Kim Botti, director at Lee Botti and
Associates. “There is an urgent need
to upskill to ensure that travel remains
an attractive and exciting industry to
people.”
This year's top destinations
DESTINATIONS that offer
value for money will draw
South Africans in 2017.
Beachcomber’s Joanne
Visagie says Mauritius
will remain a very popular
destination. “Clients find it
a trusted destination with
great value for money.”
Thailand will also continue
to appeal to the South
African market as it is still
regarded as an exotic and
affordable holiday, says
TAT’s Lesley Simpson.
She says although TAT
will continue to promote
the southern section of
the country, including more
of Krabi, Koh Samui and
Phuket, a greater emphasis
will be placed on the
northern section, including
Chiang Mai and the
Golden Triangle, especially
for repeat South African
travellers. “It’s not just
about Phuket, there is so
much more to explore.”
Wally Gaynor of Club
Travel, says we can expect
destinations such as
Turkey to become hugely
popular as a result of cost
effectiveness.
“The Turkish lira has
fallen as much as the
rand, so it’s a value-formoney
destination offering
everything to SA travellers,
from great shopping to
sights, beaches and so
much more.”
“Tourism to Turkey is on
the increase – we believe
this will be one of our best
sellers for 2017,” agrees
Alexis Bekker of LUX*.
Visa-free countries will be
enticing for cost-conscious
South African travellers,
comments Megan Wilson,
marketing manager of
Border Air (GSA for LATAM
Airlines). She says LATAM
Airlines’ flight to South
Africa has opened up a new
market as Latin America
was previously not an
obvious destination for
many travellers.
“Latin America is a very
cost-effective destination for
South Africans. Many of the
countries in the region have
experienced similar currency
devaluation to South Africa.”
Local will also be lekker in
2017. Annemarie Lexow of
Travel Vision, says people
will definitely be shopping
around for the best price
this year.
“The travel magazines
are boosting local travel
and adventure outings by
province and by theme.
“It’s really nice to see how
much our own country has
to offer, without breaking the
bank!
Opportunities in mobile
MOBILE
technology
will be a big
opportunity
for agents this
year.
“The typical
traveller of
2017 – whether
they travel
for leisure
or business
– wants the
ability to selfserve
and
manage their
own bookings,
which means
that mobile
technology
and apps are
becoming
increasingly
important,” says
Robyn Christie,
country manager,
South Africa,
Travelport.
Paul de
Villiers, vp, Amadeus
Africa, says mobile devices
are already shaping the
market and their role as
a major disruptor in the
industry will continue to
grow in 2017.
“Their portability is
driving demand for 24-hour
services during
travel.
“Micro-moment
searching and
booking are
likely to grow,”
he says, with
consumers
taking
advantage
of short
moments
to glance at
their mobiles
through the
day.
A game
changer in
technology
could be a
more complete
offering in the
mobile booking
tool space,
says Yolandé
Bouwer, gm
of Agentivity
Southern
Africa. “We
see the potential for
integrated corporate
mobile booking tools,
where the tool fully
incorporates the
corporate’s travel policy.”
She says this is something
that is not happening
extensively today.”
Rise of the sharing economy
INCREASED
competition
from the sharing
economy will
feature in both
the hospitality
and car-rental
spaces.
This year will
continue to bring
a competitive
environment for
hotels, with the
more traditional
hospitality
industry
competing with
Airbnb and
guesthouses,
says City Lodge’s
Clifford Ross.
However, he
says travellers
will increasingly
look for more
consistency of
experience and
service delivery
in a diversified market.
Car-sharing programmes
do have an impact, mostly
affecting same-day rentals,
says Melissa Storey,
executive head: Strategy,
Development
and Marketing
at First Car
Rental. On
multiple-journey
rentals that
involve greater
distances, the
sharing economy
has less of
an impact
because the
Uber equivalent
is costlier than
renting a car.
For Europcar’s
Martin Lydall,
car-sharing
trends such
as Uber can in
many ways be
seen as both
a threat and
an opportunity.
“Uber does
cannibalise
certain
segments of the
market but also works in
a complementary fashion,
servicing demand for
short rentals that are not
necessarily profitable for the
car-rental industry.
Travel will get more personal
TMCS expect technology
that allows greater
personalisation will play
an increasingly important
role in the travel industry in
South Africa.
“Voice technology and
personalisation will be the
talking points of 2017 and
beyond,” says Club Travel’s
Wally Gaynor.
XL Travel’s Marco
Ciocchetti says technology
that can meet the unique
expectations of millennials
– such as mobile apps
that will evolve into ‘real
companions’ that can
predict individual needs
– will be one of the main
game changers for 2017.
“Retail will permeate
people’s lives as mobile
virtual assistants point
out nearby restaurants
and shops, and guide
people’s purchasing choices
based on their personal
preferences, buying history
and moods at different
times of the day,” says Paul
de Villiers of Amadeus.
He says the effects of
this new world, driven by
consumer expectations, will
rapidly spill over into the
travel distribution industry.
Artificial intelligence is
closer than everyone thinks
and next year will see more
experimentation of this in
travel, says Sabre’s Dean
Bibb.
“For example, ‘Logan’
is a prototype chat bot
embedded into Facebook’s
messaging system that you
can ask to find flights, get
check-in information and
find hotel locations.”
Stephen Forbes,
spokesperson for British
Airways in SA, says airlines
have tapped into technology
to improve both customer
experience and operational
efficiencies.
“Our parents’ generation
returned to the same resort
or hotel year after year
because of the comfortable
familiarity of being
recognised and having their
needs anticipated.
“Today our digital profiles
allow airlines, hotels and
even restaurants to provide
more intuitive customer
service.”
“Personalisation is one
of the major strategies
adopted by airlines seeking
to deliver a seamless
experience and service
throughout the passenger’s
journey while being
responsive to the individual
requirements of travellers,”
agrees Robyn Christie of
Travelport.
Sabre recently asked
African travellers how
much they would pay to
personalise their trips and
the results showed that it
was over US$100
(R1 379). “Yet today,
airlines on average only
make US$16 (R220) per
passenger, so that’s a lot of
lost revenue for carriers,”
says Dean.
He says leveraging
customer data insights
and making ancillary
services available across
all distribution channels,
including the agency one,
will be key to success.
Expect growth in cruising
CRUISING experts expect
growth in the sector for
the year ahead, with luxury
cruise sales, in particular,
likely to rise.
Jackie Adami, md of
Development Promotions,
says the cruise industry
is growing and becoming
a popular way to travel for
South African consumers.
The opportunities for
cruising in 2017 are
endless, says Jackie, as
more ships are being
built. “This increases the
diversity of cruising and
the destinations one can
cruise to.”
George Argyropoulos of
Cruises International, says
there will be an increase in
sales of luxury cruises. “As
the economy struggles and
consumers are financially
challenged, it will be the
affluent sector that will
grow.
“Early in 2017 Seabourn
will launch its first
generation of luxury ships.
Towards the end of the
year Crystal Symphony
will operate a number of
cruises between Mauritius
and Cape Town, and a
Cape Town to Cape Town
holiday cruise. And Crystal
Symphony, will commence
its world cruise on January
7, 2018, in Cape Town" says George.
