Connect with us

Travel/Tourism

Unlocking Africa’s Travel Tech Potential Within $13trn Global Travel Industry

Published

on

Adam Aziz Travel Tech Potential

By Adam Aziz

In 2019, tourism was a global powerhouse, accounting for 10% of GDP, or roughly $9 trillion. After weathering the pandemic storm, we expect 2023 figures to show a full recovery to pre-COVID levels, in line with data from leading travel platforms and the World Bank. But the story doesn’t end there.

A transformative shift is underway, fuelled by evolving consumer preferences and habits, which could push tourism spending even higher to $13 trillion by 2030. Amidst this dynamic landscape, the travel tech sector is witnessing noteworthy developments. Online Travel Agencies (OTAs) are still capitalising on the shift from traditional to digital platforms, gaining a greater share of the travel and tourism market.

In more developed markets, OTAs are increasingly focusing on improving the user experience by leveraging generative AI. Companies such as Wego, MakeMyTrip, and Trip.com compete and dominate in the Middle East and Asian markets.

At the forefront, Expedia and Booking.com, major industry players, collectively command 60% of all travel bookings in the United States and Europe. This emphasis on technology underscores the industry’s commitment to innovation and adaptation in the evolving realm of travel.

While major travel companies recognise the growth potential in emerging markets like Latin America in their annual reports, the African tourism sector remains relatively underdeveloped and is seldom acknowledged. Nevertheless, Africa presents a considerable opportunity for local online travel agencies (OTAs) to establish extensive inventories on the continent, a feat challenging for non-African entities like Booking and Expedia.

Additionally, there are substantial prospects for businesses that serve as facilitators or catalysts, aiding hotels, restaurants, and leisure operators in establishing an online presence.

Curated trips and Gen AI disruption

Leading travel platforms like Booking.com are transforming into comprehensive trip-planning hubs, covering flights, accommodations, dining, car rentals, and activities. This shift towards “connected trips” is aimed at enhancing customer service and boosting retention and conversion rates, a trend also pursued by Expedia and Trip.com on a global scale. Trip.com emphasises AI’s role in curated trips as a key strategy in its annual report.

Generative AI, particularly AI-powered chatbots, plays a pivotal role in this concept. These chatbots, considering factors like budget and preferences, streamline the process of creating personalised itineraries. Currently, 20% of Google Bard users utilise AI chatbots for travel planning, with this number expected to rise as technology matures.

Why we see Africa as a significant opportunity

The case for online travel in Africa aligns with many global themes driving the online travel industry, such as increased efficiency and greater choice. However, Africa also holds unique advantages that make it an exceptionally promising market for tech companies operating in this space.

In the past three decades, Africa has experienced a remarkable surge in its middle-class population, which has now surpassed 300 million people – a threefold increase. This burgeoning middle class has the means and desire to explore their continent and the wider world and is poised to drive significant growth in the demand for travel services.

The continent’s growing and increasingly globally-minded young population will further strengthen this demand. Many countries boast a median age below 20, and populations are skyrocketing. The 2020s will see the arrival of 450 million new Africans, and by the 2040s, this number is projected to reach 550 million, constituting 40% of all global births.

The transition from offline to online is another pivotal accelerator worth noting. While online travel booking has made substantial headway worldwide, Africa still trails behind. Only 30% of travel bookings in the Middle East and Africa occur online, falling short of the global average of 50%. This gap presents a significant opportunity.

While Internet penetration in Africa stands at 36%, programmes like the World Bank’s Digital Economy Initiative for Africa will enhance Internet accessibility in the coming decade. At the same time, an ever-younger and more tech-savvy population will drive demand for online travel services. Companies facilitating the transition from offline to online travel are well-positioned to harness this immense growth potential.

Enabling travel in Africa

The opportunities in Africa’s travel industry are partly due to its unique landscape characterised by its nascent and fragmented travel market. Within this dynamic environment, two primary categories of technology companies have emerged: companies focused on aggregating inventory (OTAs) and a newer cohort dedicated to providing the digital infrastructure required to bring travel and tourism businesses online.

One common thread connecting these categories is payment processing, a pivotal component for enterprise software providers as they facilitate the transition to online operations. OTAs are venturing into the payments arena, aiming to capture transaction revenue while enhancing the user experience through a more seamless booking process. This trend extends beyond Africa and is evident globally, as the Booking.com annual report highlights.

What’s coming next in travel tech?

The global travel industry has recovered to pre-COVID levels and offers intriguing prospects for 2024 and beyond. Globally, there’s a growing consumer trend of prioritising experiences over material possessions, which could see travel’s share of GDP grow even further, especially considering rising incomes in emerging markets.

In the African market, tech companies are addressing what we refer to as “first-layer challenges.” These encompass optimising intracontinental travel, facilitating the online expansion of businesses, and broadening inventory to strengthen the network. In developed markets, these foundational issues have largely been resolved.

Nevertheless, given the rapid progress in overcoming these challenges in Africa, the increasing tech proficiency among a burgeoning younger demographic, and the trends observed in other emerging markets, we anticipate the preferences of African travellers will swiftly converge with the global trend toward curated, end-to-end travel experiences.

Africa’s next generation of travel technology companies will reap the benefits from an ever-expanding data pool as the offline-to-online transition gains momentum. Their primary focus will be to create refined digital travel products powered by artificial intelligence, all with the singular aim of enhancing the user experience to new heights.

Adam Aziz is an Analyst at DAI Magister

Click to comment

Leave a Reply

Travel/Tourism

Emirates Unveils Airbus A350-900 in Dubai

Published

on

Emirates Airbus A350-900

By Aduragbemi Omiyale

One of the leading airline operators, Emirates Airline, has officially unveiled its first Airbus A350-900 at an exclusive event showcase in Dubai attended by aerospace partners, government officials and dignitaries, members of the media, as well as aviation enthusiasts.

The Emirates A350 features three spacious cabin classes, accommodating 312 passengers in 32 next-generation Business Class lie-flat seats, 21 Premium Economy seats and 259 generously pitched Economy Class seats.

The latest onboard products reflect the airline’s commitment to delivering a premium passenger experience while optimising operational efficiency. The Emirates A350 is the first new aircraft type to join Emirates’ fleet since 2008.

Apart from its newly delivered A350, Emirates operates two other aircraft types around the world to 140 destinations – the widebody Boeing 777 aircraft and the iconic ‘double decker’ Airbus A380 aircraft.

The A350’s introduction will enable Emirates to expand into new destinations globally, including mid-sized airports unsuited for larger aircraft. The Emirates A350 will be delivered in two versions – one for regional routes and one for ultra long-haul routes.

The Emirates A350 takes technology to another level. Customers can now adjust their electric window blinds at the touch of a button.

The aerBlade dual blind system will feature in Business and Premium Economy Class offering two shaded options, and the aerBlade single blind systems will make a debut in Economy Class, with all blinds showing the Emirates Ghaf tree motif when closed.

Business Class on the Emirates A350 will feature 32 luxurious leather ‘S Lounge seats’, inspired by the Mercedes S Class for an exceptional travel experience. The A350 aircraft will feature brand new additions of wireless charging on the side cocktail table in Business Class, and in-seat lighting controls with 5 streams of light. The 1-2-1 seat configuration in the A350 Business Class ensures a very private, exclusive experience.

Speaking at the event, the chairman of Emirates Airline, Mr Ahmed bin Saeed Al Maktoum, said, “Today is an exciting milestone for Emirates as we showcase our first A350 and usher in a new era for our fleet and network growth.

“This aircraft sets the stage for Emirates to spread its wings farther by offering added range, efficiency and flexibility to our network, enabling us to meet customer demand in new markets and unlock new opportunities in the cities that we serve.

“Onboard, our updated interiors and seating configurations will help us deliver a more elevated and comfortable experience to travellers across every cabin class.

“The 65 Emirates A350s joining our fleet in the coming years fit into the airline’s broader plans to support our visionary leadership’s Dubai’s D33 Strategy, which will transform the city into a pivotal hub in the global economy by expanding its connectivity and reach.”

Continue Reading

Travel/Tourism

Air Peace Employees Undergo Training at Boeing Global Learning Institute

Published

on

air peace airline

By Aduragbemi Omiyale

Some employees of Air Peace have upgraded their aviation safety skills at a training course organised by Boeing through the Boeing Global Learning Institute (BGLI) in collaboration with Cranfield University, United Kingdom as part of a shared commitment to shaping the future of aviation leadership.

Over the years, Air Peace has recognized that a deep, unwavering commitment to safety is key to its continued success.

The programme is aimed at building upon that vision, enabling executives to lead with confidence, manage risks effectively, and create high-performing teams that prioritize safety at every level.

In the five-day in-person training, all the executives and others in the various departments of Air Peace were taught advanced safety leadership skills and gained practical tools to implement the new knowledge.

The Head of Aerospace at Cranfield University, Prof Graham Braithwaite, said, “This collaboration ensured that the training directly addresses the challenges Air Peace faces, culminating in real-world capstone projects that would have a lasting impact.”

Reinforcing this position, the Lecturer for Organisational Resilience and Change at Cranfield School of Management, Fabian Steinmann, who was excited at the great progress Air Peace made over the years, said that they are happy to learn and share knowledge and find ways to strengthen the system, making it robust and flexible to adapt to the ever-changing environment.

“Safety is at the heart of everything we do at Cranfield so the privilege we have is that we travelled around the world, picked up the good practices, learned more about the culture and the operation in various countries so we’re here to facilitate that exchange with Nigeria and Air Peace to see how we share some of the good practices and lessons learned from all around the world and translate them into their operation.”

Also, the Senior Organisational Consultant and Programme Manager at Boeing Global Learning Institute, Harry Magui, said, “The Boeing company has long recognised the importance of supporting continuous learning of our aviation partners.

“To that end, the Boeing Global Learning Institute designs and delivers numerous learning programmes to both emerging and established leaders of our partners.

“These efforts aim to develop leadership, business, and technical skills so that our partners can improve their business processes, increase operational efficiency and enable leaders to strengthen their teams to ultimately grow their business.’

Alluding to the great work Air Peace has done in making safety a pre-condition rather than just a priority, Magui said, “We’re here to partner with our great partner, Air Peace who have been phenomenal in advancing the Aviation Industry in Nigeria, so we are here to support them to harness more opportunities in the future with the Advanced Leadership in Safety Excellence Training for all its top leadership within the organization.”

The Safety Manager at Air Peace, Captain Godfrey Ogbogu, said, “This class is quite essential and we’re lucky to have our resource persons impact knowledge on us. It is a well-structured training, especially for Air Peace because of where we are now and where we hope to go in the future.

“The whole essence of this class is to reinforce what we know before and be exposed to other avenues of learning. The aviation industry is ever-changing and dynamic, and Air Peace has to be abreast of such developments.”

Continue Reading

Travel/Tourism

Emirates Expects Strong Customer Demand as Half-Year Profit Hits $2.5bn

Published

on

emirates

By Aduragbemi Omiyale

In the first six months of the 2024-25 financial year of Emirates Group, a net profit of AED 9.3 billion ($2.5 billion) was recorded, with the pre-tax profit growing to AED 10.4 billion ($ 2.8 billion).

Also, the revenue went up by 5 per cent to AED 70.8 billion ($19.3 billion) from the AED 67.3 billion ($18.3 billion) recorded in the same period of last year, reflecting the consistently strong customer demand across business divisions, and across regions.

“We expect customer demand to remain strong for the rest of 2024-25, and we look forward to increasing our capacity to grow revenues as new aircraft join the Emirates fleet and new facilities come online at dnata. The outlook is positive, but we don’t intend to rest on our laurels.

“We will stay agile in deploying our capacity and resources in a dynamic marketplace,” the chief executive of the organisation, Mr Ahmed bin Saeed Al Maktoum, stated.

“The Group has surpassed its record performance of last year to deliver a fantastic result for the first half of 2024-25. This again illustrates the power of our proven business model working in combination with Dubai’s growth trajectory as a city of choice to live, work, visit, connect through, and do business in,” he added.

It was observed that apart from demonstrating strong operating profitability, Emirates maintained a robust EBITDA of AED 20.4 billion ($5.6 billion), slightly lower than AED 20.6 billion ($5.6 billion) last year.

The firm posted a solid cash position of AED 43.7 billion ($11.9 billion) as of September 30, 2024, compared with the AED 47.1 billion ($12.8 billion) achieved on March 31, 2024.

Emirates has been able to tap on its own strong cash reserves to support business needs, including payments for new freighter aircraft orders and other debt payments, also paying AED 2 billion in dividends to its owner, as declared at the end of its 2023-24 financial year.

“The group’s strong profitability enables us to make the investments necessary for our continued success. We’re investing billions of dollars to bring new products and services to the market for our customers; to implement advanced technologies and other innovation projects to drive growth; and to look after our employees who work hard every day to ensure our customers’ safety and satisfaction,” the chief executive stated.

Emirates continued to enhance its network and increase connectivity options through its Dubai hub. During the first half of 2024-25, Emirates increased scheduled flights to 8 cities: Amsterdam, Cebu, Clark, Luanda, Lyon, Madrid, Manila and Singapore.

In May, Emirates restarted daily services to Phnom Penh in Cambodia via Singapore. In June, it launched daily services to Bogotá via Miami, expanding the airline’s South American presence to Colombia. In September, Emirates opened a new route to Madagascar via the Seychelles – taking its passenger and cargo network to 148 airports in 80 countries by September 30.

Expanding connectivity options for customers, during the first six months of 2024-25, Emirates entered into new agreements with 7 codeshare, interline, and intermodal partners: AirPeace, Avianca, BLADE, ITA Airways, Iceland Air, SNCF Railway, and Viva Aerobus.

Continue Reading

Trending