E-tourism Growing in Africa

E-tourism has always seemed like a no-brainer for the continent as money could be paid direct to hotels and suppliers. But obstacles like the high cost of bandwidth, the lack of integrated, real-time reservation systems and local online payment gateways stymied progress.

But now with the arrival of cheaper bandwidth these barriers are coming down and the world’s Online Travel Agencies like Expedia are showing a real interest in the continent. Russell Southwood spoke to Damian Cook, CEO, e-Tourism Frontiers, a company that does training and events for the tourism trade.

Ten years ago no-one was talking about online tourism. The tourism trade tended to focus on going to the big trade event, World Tourism Markets, with brochures for B2B selling and do support advertising in key markets. The travel agents tended to suggest where people went and to some extent picked the destinations. As a result, a great deal of the revenues went to large, international hotel chains and not much of the money was retained locally.

Now 56% of travel globally is booked online and the rise of the Online Travel Agents has been unstoppable. The Online Travel Agents (OTAs as they are known in the trade) include Expedia, Travelocity, Lastminute.com and Bookings.com (who have significant market share in Africa). Expedia have actually opened an office to focus on Africa.

In 2005, less than 2% of tourism revenues in Africa came from online booking. In 2010, buoyed by the World Cup that percentage rose to 5% and looks set to go to somewhere between 15-20% by 2015. The World Cup may have been a one-off boost but it accelerated the growth of online tourism in South Africa. 50% of Americans read an online review before booking internationally and that’s usually either Trip Advisor or Facebook. (Trip Advisor is now owned by Expedia).

International travellers have credit cards and increasingly expect to be able to book online anything from the smallest travel lodge to the largest hotel chain. So what are the barriers? According to Damian Cook, CEO, e-Tourism Frontiers:” The missing piece was e-commerce. There used to be no route for doing online transactions. Online distribution by the OTAs requires a reservation system that offers real-time availability. OTAs won’t do business with you unless you have that”.

The second missing piece was the ability and tools to do online marketing: “The companies needed marketing skill, especially with social media. Today’s tourist wants to hear from other travellers (through Facebook and Trip Advisor) and are not that interested in what the hotel has to say”.

So how did Cook tackle these tackle these difficulties?:”We went to KCB in Kenya who have a presence across the region. We lobbied them about the importance of foreign exchange that you get through tourism and as a result, late last year they launched the first payment gateway across the region”.

“We bought up Nightsbridge from South Africa who have a real-time software reservations system, which has a strong presence within the small-scale hotels trade. It’s simple but effective. There’s a flat fee based on how many rooms are allocated a month and it costs around $50 a month. It partnered with KCB who provide a specific account for tourism clients that includes a Point-Of-Sale terminal and the Nightsbridge software. It was launched 2 months ago and all the big hotel chains have signed up and some of the smaller guys like camps and lodges”.

On social media marketing, Cook gives the example of the Il Ngwesi Lodge in Northern Kenya. Their only Internet connection was from a log in their grounds between two hills via a mobile dongle:”Nevertheless, they’ve set up their own blog and are doing online reservations”.

“The example I always come back to is Born in the Kruger (a fight between three species over a baby calf) that’s 8 minutes long and has had 61 million views. That’s the best User Generated Content example in tourism. Another example is Uganda where they have set up Facebook pages for the gorillas. You can then friend the ones you’ve seen and each of the pages has a booking link. So what past visitors say drives future visitors.”

In overall terms, the strongest online tourism destinations in Africa are probably South Africa and Morocco. Outside South Africa, it’s very much a contrast between often well developed private sectors and considerably less well developed public sectors:”Kenya is strong in the private sector but weak in the public sector. Tanzania strong in the private sector and Uganda is beginning to invest”. Botswana and Namibia are learning from the South African example. The third missing piece was the inability of hotels, lodges and guest houses to offer online, real-time reservations.

Cook was in Accra to investigate rolling out his services in West Africa:”Ghana is 70% corporate. It’s heading increasingly online. Expedia have a really good business travel service. Business travellers often like to add on a day. There’s also big potential in places like Sierra Leone and Liberia. The former is becoming a surfing destination”.

e-Tourism Frontiers has a two-pronged approach: direct training of the public and private sector to get awareness across and training and business facilitation: “Through our events we bring the local tourism industry together with the Online Travel Agencies.”

“We have a strong partnership with the South African Tourism Board. They are further on than anyone else on the continent because of the World Cup. It has a strong digital team. The private sector there is getting very good at doing online”.

“In East Africa we alternate every year with a tourism road show in 8 tourism centres with a conference and facilitation event. We’re just starting to see what we can do in West Africa.

E-Tourism Frontiers is based in Kenya but has done work globally:”We’ve done work in Qatar and Jordan and are going to be doing work in Greece this year as well as Black Sea region, Malta and Brazil”.

Now that the cheap bandwidth is slowly becoming available, telcos and ISPs now need to adopt an industry sector approach to those that are most likely to make the online transition fastest. It’s easy to become obsessed with banks as corporate customers but to miss the business generating sector that is tourism.