ABTN previews the first major business travel conference in Africa and traces the rise of the industry on the continent.
When about 200 delegates gather in Johannesburg next week for the first ever ACTE global education conference in Africa, it will be a remarkable milestone.
It is less than a decade ago that ACTE - the Association of Corporate Travel Executives - held its first ever meeting in the continent in South Africa.
Around 300 delegates attended that event in 1999 in the Intercontinental Sandton Sun Hotel just outside Johannesburg. It was also the first time, one delegate memorably remarked, that buyers, suppliers and agents had all been in the same room at the same time.
Managed business travel was in its infancy then in South Africa and barely existed outside that country.
With a few notable exceptions, like Unilever, most companies did not have a travel policy in the Republic. A business trip meant the traveller just jumped onto the first available plane and stayed in whatever hotel was suitable.
Since 1999, managed business travel has come a long, long way in Africa. South Africa has made enormous strides to catch up with the more mature markets in Europe while the industry has taken off in dozens of other African countries.
Delegates at next week's three day event are coming from 16 different countries, among them Nigeria, Kenya, Botswana and Namibia.
At the same time the big global players have moved in. HRG, one of the major travel management companies in the continent, has 25 partners there, including 10 which have joined the network this year. More are expected to follow.
BCD travel is another major player with numerous partners while American Express Business Travel and Carlson Wagonlit Travel also have offices throughout the continent.
The continent, despite persistent areas of local instability, is rich in natural resources, including off shore gas and oil as well as significant reserves of minerals.
There is much business to be done there and, consequently, a growing need for travel.
ACTE started back in 1999 with about 15 members, almost all from South Africa. The figure has not only grown each by 20-30% but membership is now spread across the continent.
Monique Swart, for many years, ACTE's regional director for the Middle East and Africa, said: "It is really good to get these guys from across Africa to come to the conference. They are looking for guidance and are really keen to learn.
"There is still a vast gap between South Africa and the rest of Africa. For examples, companies will start in South Africa and then expand to other countries like Nigeria and Kenya and then to other places."
Among the problems facing companies on the continent are security, cultural differences and technology.
Ms Swart said the aim of the conference, to be held at Sandton's smart new International Convention Centre, was to provide "top notch" education with different sessions for the mature and less mature markets.
Topics for discussion include security and safety, the value of a TMC, technological advances, training, doing business in Africa, payment solutions, cost control and hotel programmes.
One of the key presentations will be by Nick Binedell, chair of strategic management at the Gordon Institute of Business Science who will speak on the future of business travel in Africa.
www.acte.org
Two case studies of TMCs in Africa
Wahib Wahba is president and ceo of East West Travel based in Cairo, Egypt. With a turnover of €4m a year, this is a "good sized agency in the country with 65 employees, four implants and six offices as well as agents in other cities.
Mr Wahba said the company had been running for 26 years and had joined ITP -International Travel Partnership, a global network of TMCs in 2007.
He said about 70% of his business was business travel, 10% from the meetings and incentive industry and the rest form incoming traffic and leisure.
Mr Wahba was quite clear about the main problem he faced: zero commissions.
"Things have changed dramatically since zero commissions came in," he said. "Our customers pay but the income we had from airlines was much, much bigger.
"It used to be 10% but now on £30,000we get £300 and the customer does not like paying that.
"We are now looking at other areas, like the MICE industry and so far the results are very good. Business travel services are not paying enough in our opinion so we are employing more people in other areas."
Mr Wahba estimates there are about 6,000 agencies in Egypt but 80% of business travel is handled by just 10.
Among them are American Express and HRG whom he sees as his biggest competitors, not least because they can offer clients credit of up to three to four months.
This is not a position East West Travel is in as Mr Wahba says that suppliers are increasingly reluctant to go through agents, especially airlines which are guiding travellers to their own websites.
"They are making life more difficult for us and putting more pressure on us to pay at the end of the day."
He said companies were also appointing what are called travel conductors who do all the corporate's travel business. "These are also a big threat to us," he said.
The answer is through upgrading both services and technology.
"The only way forward is to invest more in people and technology and to upgrade our services. That's the only way we can survive with the giants," he said.
www.eastwesttravelegypt.com
Josephine Anyanwu is chief executive of PassageGold Travel Agency in Lagos, Nigeria. It is among the top 15 TMCs of about 1,500 in this oil rich country.
The agency has annual sales of €15m with business travel 62% of her business, meetings 2%, incoming traffic 15% and leisure 21%.
PassageGold, also a member of ITP which it joined this year, has 62 employees, four implants and an office in the capital of Ajuba as well as in Lagos.
The oil companies are her biggest market and much of her business is dealing with airlines rather than hotels. Hotel business for PassageGold is very small.
But dealing with oil companies brings the inevitable issue of security to the fore. Mrs Anyanwu cites attacks on offshore rigs by militants as one of the problems facing her business. Crisis management is a must for TMCs in the country.
She said that one major oil company has cut its travel to Nigeria by 50% in the last year because of the fears over security.
But there is also the competition, here mainly again from American Express and to a larger extent from HRG.
Air travel is her company's dominant activity. There are plenty of carriers flying to Nigeria, including Virgin Nigeria, Air France KLM and BA and because of the culture, many locals as far down the pecking order as clerks will insist on flying business class which is good for PassageGold.
But it is also a country without any low cost carriers so the competition on fares is not as intense as it might be.
www.passsgegoldtravels.com