“Growth of the African Tourism as industry remains resilient"
How is the African tourism sector performing and which are the driving factors?
International tourist arrivals in Africa are estimated to have increased by 8%. Results were driven by the continued recovery in North Africa and the solid growth in most destinations that reported data. Tunisia continued to rebound strongly in 2017 with a 23% growth in arrivals, while Morocco also enjoyed better results after weaker demand in the previous year. Growing demand from European source markets and a more stable environment contributed to the positive results. In Sub Saharan Africa, strong performance continued in large destinations including Kenya, Côte d’Ivoire, Mauritius and Zimbabwe. South Africa reported slower growth in arrivals though a strong increase in expenditure. Island destinations Seychelles, Cabo Verde and Reunion Island; all reported double-digit growth in arrivals, benefiting from increased air connectivity.
The driving factors
The Africa agenda 2063 remained a strong driving factor to the growth of the industry; Issuance of the AU e-Passport and creation of visa upon arrival, e-visa and visa-free travel for African citizens in line with the concept of unrestricted movement of persons, goods and services across the countries. Others include; infrastructure development aiming at unlocking intra-regional economic exchange and establishing regional value chains for increased competitiveness, as well as political good will and mainstreaming of national agenda and implementation of tourism transformation policies.
What are the greatest challenges facing the growth and expansion of the tourism sector in Africa?
Among challenges hindering the growth of the sector are travel advisories by international tourist sources and Political instability at some. Inadequate air travel between the major African cities due to poor intra-African air connectivity and lack of strategic marketing of brand Africa are also among top issues. We are also dealing with negative perception of brand identity and image of the continent. Africa is not a country but a continent, home to more than a billion very creative, entrepreneurial and tech savvy Africans. It is however viewed as the only home to a fascinating wildlife and torn apart by war, poverty and diseases. Last but not least, underdeveloped tourism infrastructure, visa restrictions and lack of a common visa policy, and lack of access to adequate funding and underfunding at the ministerial level.
In response to these challenges, the UNWTO is aligning and developing national tourism strategies and policies in line with national agenda. The 10 point UNWTO Africa Agenda is a road map towards the maximization of Africa’s tourism potential. We are putting emphasis on travel and Tourism as a driver of jobs growth and economic recovery, provision of technical support to governments and affiliate private sector organizations for the development and promotion of sustainable tourism at the destinations. UNWTO is also providing Risk and Crisis Management courses in conflict prone zones as well as helping in the establishment of brand and image of African campaigns.
What role is the rising Middle Class playing in boosting Africa’s domestic tourism, as a contribution towards achieving the middle income status?
People’s movement is no longer a luxury set aside for the few with high per capita income but a basic need for the ever increasing majority of the middle class who create and shape the future generation entrepreneurs. A growing middle class is a sign of a robust economy. The existence of domestic tourists who have more money to spend at their disposal and thus willing to travel more, has led to the mushrooming of low cost airlines, upward growth of bed capacity in main cities, flourishing of the so called shared economy etc.
Traditionally, tourism was seen as a thing for the foreigners but this myth has been demystified by the fact that travel and leisure is not the sole domain of foreigners but also, for the locals to have a real life experience of the richness and diversity of their countries which translates positively into the national economy.
“Jumia Travel's Positioning in the African Digital Eco-system”
How is the Internet transforming behaviors in Africa?
Digital services are becoming omnipresent on the continent. This is evidenced by the increase in the number of consumers adopting the convenience and time-saving benefits of online marketplaces, made possible through the Internet. As the adoption of online services becomes more popular, footfall in most brick and mortar stores continues to fade out.
Affordable smartphones, competitive data tariffs, and the growing Internet penetration (with more than 453 million users in Africa) are among the factors driving fast adoption of digital services in Africa.
Jumia is unquestionably relevant to travelers who are looking to save time and money for their daily needs online, checking information, ordering food, booking flight tickets, hotel rooms, paying bills and even shopping online.
What are some of the factors influencing Jumia’s growth in the continent?
The African market is full of great potential for the travel industry, accounting today for only 5% of international travels, and 2% of the air passenger traffic. The demand is increasing due to strong economic growth, a middle class on the rise and a young population.In that context, there are a number of drivers to Jumia’s growth and success in the continent.
On the demand side, smartphones and Internet penetration. A large majority of travelers are connected to the internet through their smartphones, spending a huge amount of time surfing the Internet & Social Media, looking for interesting content and good deals, to help them save time and money.
To meet that demand, Jumia has three main assets. First, we have bespoke products corresponding to the needs of travelers in Africa: we have developed travel plans tailored to each customer’s preference, in terms of choice of destination, preferred flights and hotels, within a reasonable budget.
Second, convenience. Through our platform, we bridge the gap between travelers and offline travel agencies, by helping individuals to book their hotel and airline anytime, anywhere on their desktop computer, tablet, or smartphone. Additionally, our travel marketplace also provides useful reviews on the level of service delivery to expect from each hotel or airline.
Third, largest inventory in Africa. With over 25,000 hotels listed on our platform across Africa, we have the largest hotel/flight inventory in the continent, ranging from the cheapest to the most expensive categories. All the airlines flying all routes within and outside of Africa are listed on our marketplace. We have also partnered with relevant online travel agencies outside of Africa to cater for our customers traveling to other continents. I would say it is nearly impossible for people not to find their preferred hotel or flight on Jumia.
What are your thoughts about the future of travelers 2.0 in Africa ?
The average age of the population in Africa is around 20 year old. It’s a young population adopting new technologies and changing habits. They will be more connected, more informed and will travel more within their own country and region. Jumia will thus keep adapting the services of its ecosystem to accommodate them. The Internet and smartphone will become central in their life, and they will use them for all their travel plans. They will use it to make their purchases, book for holidays, and even check out destination information through social media. It is an exciting time for travel in Africa, and we are enthusiastic about the future.
“The Industry from an OTA’s Perspective”
How would you describe the African market for online travel?
The African market for online travel is still nascent. Most customers are still more comfortable booking for their travel over the phone or at an agency but customers who make the first booking online rarely go back to booking offline. Of course some populations are more tech savvy than others. In Nigeria and Kenya we have seen a faster adoption of online travel services. The fact that we are now also selling flight tickets on our platform has been a driver of online service adoption. We have also seen great improvement in terms of trust in online services. More hotel managers now believe and can testify that online services can and has helped them grow their business and revenue and will be a main source of bookings in the near future.
Who is Jumia’s target audience and how have you met their travel needs?
Jumia's target audience is the African middle class: business men and women across the continent who travel regularly both for business and leisure. We are also seeing more students also traveling in groups, and we have tailored our services to ensure we meet each of our audience’s unique needs. For instance, Jumia offers a diverse range of properties including hotels, villas, apartments, and lodges among others at affordable prices. We also have provision for resident rates only available on Jumia, and have incorporated flexible payment methods as well as technologically innovative processes to allow seamless travel experiences. We have also established other initiatives such as corporate rates, and a ‘travel smart’ loyalty programme. It is important to note that 90% of our travel customers originate from within Africa, while the other 10% from other continents.
How are you dealing with the offline competition?
To support the digital shift, we operate both online and offline. We understand that online travel relies on good relationships between all players in the ecosystem, and as such we have a network of travel agencies and large customer service teams always available to support customers along the booking process. We also have a team of account managers interacting with companies and offering them the option to open an account with Jumia for the management of their hotel bookings and flight tickets requests. Our competitive advantage lies in our capacity to offer accommodation in over 25,000 hotels in Africa, spread over 1.500 African cities, at best available rate. Jumia provides the possibility to make a booking at any time and on any day, thanks to our 24/7 Customer Service set up and our online interface.
“Competitively positioning Africa’s airlines in the global aviation market”
With a total world passenger traffic market share of only 2.2%, what challenges hinder Africa's better performance?
The sustainable growth of African airlines traffic lies in removing the bottlenecks to effective connectivity, lowering industry operating cost and developing commercial cooperation among airlines.
IATA forecasts that Africa air passenger traffic will grow by 4.9% annually over the next 20 years. This creates enormous opportunities for the continent’s airlines to grow. With 26 African States signing up to the Single African Air Transport Market (SAATM), there is optimism that intra-Africa air transport liberalization will soon be a reality, especially if travel is further facilitated by ease of visa acquisition.
Further, the impressive improvements in safety recorded in 2016 and 2017 – zero jet haul losses and zero accidents, must be maintained and build upon. With the assurance of safety, security, competitive operating environment, ease of market access and visa facilitation, Africa’s share of passenger traffic will exceed 320 million by 2037 (more than double) from the current level of 135 million.
How can African carriers compete with non-African ones that currently cover over 80 percent of the African market?
To be competitive, African airlines must rid themselves of practices that are frowned upon by passengers and customers. They must uphold the highest standards of safety and security, adopt technology at all levels of the business, provide quality service (at airport and inflight), collaborate through partnerships, build commercial and network arrangements to increase their market reach and lower their operating costs.
But African airlines will also need the support of governments through enactment of smarter regulations, reduction in taxes on passengers, airlines and fuel, facilitating market access through SAATM and promoting intra-Africa trade and business. The development of strategic air transport hubs and the ability of African airlines to feed and de-feed traffic through such hubs in a well-structured manner would be critical in the recovery of part of the intercontinental traffic currently carried by non-African airlines.
What is the future of the aviation industry in Africa, in regards to passenger traffic?
The future of passenger traffic is promising. With growing economies, burgeoning middle class and youthful population, IATA forecast Africa to be the fastest growing air transport passenger market at 4.9% per year to 2037. With this growth, passenger traffic will increase by an additional 197 million over the next 20 years bringing total passenger traffic to 321 million by 2037.
In fact, the picture is rosier if there is sustained momentum and decisive action by the African Union (AU) and individual African States on the implementation of the 3 aviation related pillars of the “AU Agenda 2063” – (1) implementation of the Single African Air Transport Market (SAATM), (2) African Continental Free Trade Area (ACFTA), and (3) Visa waiver or visa on arrival policy for all African citizens in all African countries. With such policy stimulus and market liberalization, IATA forecast that passenger traffic by 2037 will reach nearly 350 million.
“The Role of Aviation in Growing Africa’s Economy”
According to you, what are the main opportunities for the aviation industry in Africa, especially with the direct flights between Nairobi and New York?
The non-stop flights between Nairobi and New York City are a major milestone to growth and development of the aviation industry in Kenya and Africa. From the Airline perspective, we believe that the Nairobi - New York connection is a “game changer”. It is a world class product – daily flights with no missed connections, and no additional airports. Although it is an extra-long haul flight – on average 15 hours, we will ensure to give nothing less than top-notch world class service.
We also see this connection between Nairobi and New York as a link between Kenya and the larger African continent to the US, opening up opportunities not only for tourism but also in terms of trade. As a regional hub, Nairobi will connect 40 other destinations operated by us and our regional subsidiaries, Jambo Jet in Kenya and Precision Air in Tanzania.
What are the main challenges currently faced by the industry? How can we address them?
While the industry has been recording impressive performance over the years, it is also confronted with issues that must be addressed. These include high operational and taxation costs, infrastructure constraints and slow pace of liberalization of African skies among others.
How do you see the future of the hospitality industry in Africa? What can be done to attract more travelers?
We are progressively balancing between the African and intercontinental markets especially in areas with high dependency. The industry is always evolving. As an airline, we have a broad strategy to assert our presence on the continent. For instance, in addition to launching in New York, we shall resume regional flights to Libreville, Gabon and commence daily flights to Mogadishu.
Today, we operate across 52 destinations globally, 43 of these destinations being in Africa. We have witnessed growth in most of these tourism destinations, both in terms of planning and hospitality development. It is no doubt that hospitality in Africa is bound for massive growth. But to achieve this, all stakeholders; hoteliers, airlines, tourism boards, travel agencies among others, must strive to provide travellers with quality and uncompromised services to ensure retention. The industry is dependent on positive reviews that can only come from satisfied customers.
Africa’s travel and tourism industry continued to record impressive growth through the year 2017 with a 9% annual increase in international arrivals. The Jumia Travel Hospitality Report Africa 2018 underlines the important growth highlights, expert views, contribution to the economy, domestic travels and Africa’s aviation industry trends. This is the coming of age of the African tourism.
UNWTO. IATA. WTTC. AFDB. Kenya Airways. Jumia Travel Business Intelligence. World Travel Market. CIA World Factbook. W Hospitality group. Internetworldstats. GSMA. Statista. Visaopenness.org