Travel agents Turn to Innovation to Remain Relevant  11th Sep 2018

Traditional travel and hospitality industry agents have estimated losing upto 60 per cent of market share to self-booking portals and shared economies.

They lost five to 10 per cent of their business travel market over the last 10 years atleast according to the Kenya Associations of Travel Agents, amounting to about 65 per cent or Sh39 billion annually going by 2017 ticket sales which the association estimated at Sh60 billion.

Speaking to the Star on phone, KATA chief executive Nicanor Sabula further attributed the losses to a fast growing digital savvy population. Latest Statistics by the communication Authority shows that internet subscriptions currently stand at 36.09 million. According to the agents, this high connectivity has allowed more Kenyans to go online to look for travel information such as deals and discounts.

“Many individuals and family are preferring to make bookings on their own through self-booking portals, they do this for hotels and even flights. So travel agents are no longer facilitating this market,” Sabula said. Some of the disruptive platforms and share economies include Booking.com, Uber which has affected their transport arm and Airbnb which has affected their accommodation arm.

Artificial Intelligence which promises to make tourism more efficient with new services like customer service bots and personalised recommendation services has also been pointed out as a key disruptor.

To stay afloat, the agents through their lobby group said they now rely more on the business traveler who currently constitutes 75 per cent of their market. According to Skyward express commercial manager Kelvin Mwasi, accessibility of flights bookings through the internet is a major element in the sector.

“As at June, web bookings increased to 23 per cent from 11 per cent in 2017 with direct bookings dropping to 47 per cent from 60 per cent. Travel agents accounted for 30 per cent of the airlines bookings up from 29 per cent,” Mwasi said.

The 2018 hospitality report by Jumia Travel shows international arrivals to Kenya reached 1.4 million as compared to 1.3 million in 2016/2017 financial year, representing a 9.8 per cent increase despite a bumpy electioneering period. In terms of payments, mobile money payments contribute 26 per cent of the sector's payment mode.

To avoid further loss making, the agents are currently holding talks as they seek help of technology experts to integrating their services with other service providers like Hotels, Car Rental services from a digital perspective. However, Serena hotels regional sales and marketing director Rosemary Mugambi said in the Jumia report that even as industry players become more tech savvy, there needs to be a balance between technology and human interaction.

“It is necessary to keep up with competition and global trends which are stirring creativity and innovativeness, but it is important that the main focus of the industry remains all about unrivalled guest experience and this focus is what must drive the technology trends,” Mugambi said.

Source: https://www.the-star.co.ke/news/2018/09/11/travel-agents-lose-as-market-share-wooed-to-technology_c1816508

 

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