A RECENT research from Euromonitor International reported that the GDP growth in East Africa is set to peak at seven per cent by 2017, making it the fastest growing regional economy in Africa. Subsequent research also indicates that the tourism industry in sub-Saharan Africa continues to develop fast, with a 4.7 per cent increase in arrivals in 2012 – higher than the global average of 4.3 per cent and second only to Asia Pacific with 5.1 per cent. By 2017, the number of tourists travelling to sub-Saharan Africa is expected to reach 42.6 million.
In response to these projections, Travelport unveiled its investment plans for this at a press conference held in Nairobi last month. TTN caught up with Mark Meehan, managing director, Travelport Africa to discuss their expansion plans and strategy for East Africa:
What is the current status of the travel industry in Kenya/East Africa? What is your prediction for its growth in the coming years?
For most of the East African markets, the travel and tourism industry accounts for 11 – 13 per cent of GDP, so it’s a big contributor to the economy. In terms of how they are growing, again from a micro economic perspective, it is about seven per cent. Travel and tourism is growing significantly both in terms of fulfilling the need within Kenya in the outbound market both in the corporate and leisure travel as well as inbound travel. That segment of the economy is growing and similarly from a GDS perspective, we see a significant growth. What we have seen in Africa is that a number of start-up airlines, like Fly 540 who established themselves in Kenya reach out to the GDS systems right at the outset as they see the strength of the distribution. The other challenge that is specific to Africa, and a certain extent to the Middle East, is that there are still a lot of cash transactions that take place. Online direct with airlines, credit card penetration is pretty low, so that adds strength to the GDS in collusion with the agency community.
You have launched a number of new solutions already in Africa including Merchandising Platform, Agentivity, Smartpoint and mobile technology. Are there any other technologies that you have available in other parts of the world that are not yet Africa? If so, when do you plan to bring them?
Africa is one of the regions that lead the way in terms of like Smartpoint adoption. Mobile penetration in this region is very high so we have been pushing hard and in some instances using Africa to support innovation and development because of the need that’s there and this includes products like Document Producer and Agentivity being born and bred initially in Africa and exported elsewhere. These products have just come into the Middle East the last few months. There aren’t many major online players in Africa and therefore we see many agents looking for an online channel to add to their traditional bricks and mortar channel and as they do this, the kind of offerings we have for them in the online space along with our support will become more important.
What are your plans ahead?
One thing with Africa is that you can’t stand still and rest on our laurels; we have to continually look at what’s happening with all the trends, the pace of change that there is in Africa from what is going on with travel, watch which countries are more buoyant, which airlines are expending their route networks and to where. We plan to develop at places where we have mature markets, continue to build on service and product, and build a sustainable operation in those new markets.
By Kim Thomson
TTN is the most established trade publication in the Middle East distributed on a controlled circulation basis to members of the travel and tourism industry.
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