Airlines and tourism in Southern Africa. Cleared for takeoff?
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If you look at the programme for HICA 2013, you’ll see that one of the panel discussions will be called ‘Hard talk between airlines, tour operators, and hoteliers.’
“What needs to be done to generate the required numbers of tourist to visit the region – address issues such as seasonality, geographic spread, increasing the tourist’s average length of stay and spend,” says the prospectus.
I thought the premise of the question was wrong, so I asked Michael Tollman, executive chairman and CEO of Cullinan Holdings, whether we shouldn’t rather be looking at what visitors want, and then working towards delivering on that?
Surely we should consider demand, rather than what *we* want?
The most helpful way to answer me, he said, was to look at the problem from a global perspective. Southern Africa is just one destination, and it’s competing against many other major markets in which pricing and products are more competitive.
“We should be doing more to assess the trends in travel, and working together to grow the business.
“Look at Egypt before its current political problems: its tourism industry pulled together and their arrivals grew from almost nothing to 16 million a year.
“Southern Africa should be getting those numbers.
“This is a beautiful country with fantastic infrastructure.”
Michael is a director of various companies that have interests in hotels, cruising, coach touring, tour operations, and more, and he said that their experience is that people want value and service.
“South Africa is expensive if you compare the price per mile or per hour against other long-haul destinations.”
He wanted to illustrate his point, so he got quotes for return flights on a given day in May for both business and economy class travellers from London to New York, Miami, Sydney, or Johannesburg. (“Business class tourists are of particular interest because they spend more.”)
“It takes 22 hours 55 to fly from the UK to Sydney, and 10 hours 45 to Johannesburg – but even though it’s more than double the flying time, the flight to Sydney was 9% less expensive than the flight to Johannesburg.
“And whilst it takes almost the same amount of time to Miami or Johannesburg, business class to Johannesburg is 69% more expensive than business class to Miami.”
The actual quotes?
- London/New York/London (7 hours 30 minutes): Business class £ 2,504.75; Economy class £ 773.75 (this was the lowest possible fare in business class. A fare of £ 427.75 was available in economy);
- London/Miami/London (9 hours 5 minutes): Business class £ 3,150.75; Economy class £ 854.75 (the cheapest possible fare in business class was £ 2,821.75, and in economy: £ 572.75);
- London/Sydney/London: (22 hours 55 minutes): Business class £ 4,877.85; Economy class £ 1,297.85 (the cheapest possible fare in business class was £ 4,054.85, and in economy: £ 970.85)
- London/Johannesburg/London (10 hours 45 minutes): Business class £ 5,323.85; Economy class £ 873.85 (the cheapest possible fare in business class was £ 5,125.85, and in economy: £ 873.85)
5,323.85 pounds from London to Johannesburg? It shouldn’t be like that.
“You can’t successfully set prices in isolation,” said Michael.
“Travel and hospitality are like any other business – to be perceived as offering value you have to pitch your prices in line with what’s being charged in other markets.”
This isn’t the only reason South Africa’s lagging behind, he said: there’s also the generally accepted perception about crime (and, I’d suggest, the way we report about it. But that’s another discussion.)
“I don’t believe crime should be an issue when it comes to tourism because if you look at the data, the number of crimes against tourists is negligible: crime generally doesn’t happen in the places where tourism takes place.”
Also, he said, visas are a challenge – and here I laughed because I’d recently idled through the back pages of The GSA, and read the visa requirements of the various countries, and shook my head at all the hoops they expect you to jump through before they’ll deign to allow you to visit.
“It’s almost as though they don’t want tourists,” I said.
Michael agreed. “It would be good to achieve a uni-visa for all Southern African countries, including Mauritius.”
In the end, though, he came back to that simplest and most difficult of business basics: value.
“Tour operators, airlines, and hotels – it’s important that we all work together to give value to our customers.
“If they leave and we’ve exceeded their expectations, they’ll come back, and they’ll send their friends.”
And this’ll be the position he’ll take at HICA 2013 when he talks with acting GM of commercial operations at SAA, Manoj Papa; the CEO of the KwaZulu-Natal Tourism Authority, Ndabo Khoza; Air Mauritius’ regional manager for Southern Africa and Latin America, Carla da Silva; and John Lee, the resorts director at Sun International.
The discussion will be moderated by Paul Bannister, CEO of Ignite.
Registration for HICA 2013 will take begin next Wednesday, 8 May, and the conference itself will takes place on Thursday and Friday, the 9th and 10th, at Durban’s Elangeni Hotel.
To book for HICA 2013, please visit http://hica.co.za/2013/
Now go away on holiday. It’s in the economy’s best interest
With best Barefoot Wishes – M
MARTIN HATCHUEL, Barefoot Writer
Specialist writer for the tourism industry
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