2017 is one year that many travel agents in Kenya will want to quickly forget. In a year characterised by uncertainty brought about by the longest electioneering period ever witnessed in the history of the country, travel agents had to surmount several business challenges to remain afloat. Many African countries are accustomed to periods of slowed economic growth during an election year but the events in Kenya earnestly began early in the year, run for almost a whole year punctuated with an unprecedented repeat election following the nullification of the August 8 presidential election.
Julie Dabaly-Scott, Managing Director of Bunson travel in an interview with a local business daily at the height of the electioneering period aptly captured the predicament travel agents faced. She told the reporter how a group of about 70 business people that were to jet into Nairobi from around the world for a regional management meeting had changed the venue to Arusha, Tanzania, citing concerns over the volatile political situation in Kenya. “At around 5 pm, several e-mails dropped in indicating three more parties of business tourists, each numbering about 30, had cancelled their Nairobi meetings — moving them to countries they thought were safer”.
As if to hammer the final nail in the coffin of Travel agents businesses, IATA sent shockwaves to the market by its December announcement that it was suspending the Default Insurance Programme (DIP) following disagreements with the insurance provider Saham Ltd. They demanded that travel agents provide a bank guarantee before the end of month, a demand that was impossible to meet. After weeks of anxiety and following intensive lobbying by KATA, IATA finally came to an agreement with Saham late in December and agreed to reinstate the DIP.
Speaking to a number of agents in early January, the situation seems to have tremendously changed. The aura of gloom has quickly been replaced with an air of great optimism and expectations. Shilen Jobanputra, the Managing Director of Travel N’ Style is optimistic that the New Year will bring good tidings to the industry. “As far as business outlook is concerned, we are all optimistic and positive and looking forward to a better year because all the indicators are up. Politics is now behind us, the infrastructure is developing, the transport network is improving; all this will have a good impact on our business and the industry in general. Slowly business is rebounding” he says.
Across town, Mira Bid of Muthaiga Travel and Bancy Njeru of Primate Tours are excited that 2018 is looking good and positive and “undeniably it will be a better year than 2017”.
There are various events that would positively shape the travel business in 2018. As the world of sports prepares itself for the FIFA World Cup set to take place in Russia this year, many football fans will want to book their travel tickets ahead of the tournament. Bunson Travel Services- Kenya, a KATA registered travel agency has received approval to sell tickets to fans across Tanzania, Ethiopia and Uganda. Julie Scott reveals that business is looking up and they expect to do good business following the great interest shown by Kenyans in wanting to attend the games.
According to JTB-2018 Global Travel Forecast for Businesses, the global airline industry is expected to grow at 6% in 2018. Part of this growth is due to further segmentation of pricing, including the introduction of basic economy fares by many carriers. Airfares overall are expected to grow 3.5% globally.
It is however not all agents that are openly optimistic about the New Year. Some like Martin Murimi, Managing Director of Global Star Tours and Travel advice caution as IATA moves to make key changes in the Passenger Agency Programme. “Even though we are optimistic that politicking is now over, the new IATA changes are likely to negatively affect us”. Shilen of Travel n Style shares in this concern stating that the NewGen ISS might be negative for business.
The International Air Transport Association (IATA) announced last year that the Passenger Agency Conference (PAConf), composed of IATA’s member airlines, had adopted Resolutions for the full implementation of the New Generation of IATA Settlement Systems (NewGen ISS) initiative. NewGen ISS and Transparency in Payments will be rolled out progressively from March 2018.
Thomas Njuguna, Managing Director at Globus Tours and Travel Ltd is cautious about government tenders which have a 50/50 effect on business especially now that the government is coming up with supplementary budgets, and other government procedures that need to be put in place first but is optimistic once the government is settled, business will obviously be better than last year if no disruptions pop up.
Ms. Njeru who has already put in place plans to recruit new staff in anticipation of the expected growth has one single advice for the industry, “technology is picking up every day giving online travel agencies advantage. We have therefore to up our game, otherwise clients might not see the need of a traditional travel agent unless they are buying tickets on credit. But of course there are those who understand especially the frequent travellers that you always need a travel agent.”
Kenya Association of Travel Agents CEO Nicanor Sabula supports the optimism expressed by travel agents saying that after every cloud there is always a silver lining. History has shown us, the periods following elections witness rapid economic growth and therefore it is only those who prepare adequately that shall reap maximum benefits. He advises travel agents to prepare for the changes brought about by IATA as they are likely to significantly affect their businesses. It is not going to be business as usual.
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