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The Evolution of Domestic Tourism in Sub-Saharan Africa

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Euromonitor International spoke at the annual World Travel Market Africa in Cape Town recently and provided some insight into Domestic Tourism in the Sub-Saharan Africa region. Travelling is generally perceived to be none essential across most African countries, as such many people do not engage in the activity. There has been less investment from most governments across the region to encourage travel amongst locals and limited competition in terms of airlines operating in most African markets. The cost of travel is generally very high in Africa in terms of transport and accommodation and therefore limited income often restricts frequency of travel.

Perceptions play a great role in the influence of how Domestic Tourism in Sub-Saharan Africa grows. There is limited knowledge about availability of affordable accommodation options; as such people assume that travelling is only for high net-worth individuals. Across the region, there is generally lack of a savings culture towards holiday travel amongst most Africans. Travelling is generally perceived to be none essential across most African countries.  Foreign visitors are perceived to have more spending power than locals; therefore travelling is seen as not affordable in the eyes of locals. Travelling is the last thing money should be spent on unless there is a reason; for example to attend funerals and weddings. Family comes first before spending on travelling.

Locals are however increasingly embracing the culture of travelling around the country. Thanks to increasing efforts to boost Domestic Tourism by Travel & Tourism industry players such as the ‘Shot left’ promotional campaign by The South African Tourism Board; more locals are travelling around the region.  Many players in the industry have introduced packages that are targeting different classes of citizens and different levels of spending power. However, many locals still have to save up due to limited purchasing power; they tend to focus on cheap road travel, budget accommodation options and visits to public beaches as well as public sites which have either no entry fee or a minimal charge.

Domestic business tourism continues to grow in South Africa and Kenya. In South Africa, the numbers of domestic business trips taken during 2013 show significant growth. Cost of travel between key cities is relatively low as there is stiff competition on domestic routes among airline operators.  Kenyan tourism has seen stronger growth in business travel as opposed to leisure travel and cities like Nairobi are seen as a centre for business.

Another key factor in Domestic Tourism in Sub-Saharan Africa is airlines. The region does not have many carriers and as such international airlines mainly operate in the region, taking a large chunk of the business. It is a very competitive industry as everyone is “rushing” for the little business – price is therefore a factor. Flights are expensive as the competitors are few and economic woes have resulted in quite a number of airlines shutting down or scaling back on routes. There are no direct flights to some destinations, resulting in long travelling time as travellers have to use connecting flights. The airline industry is capital intensive; fuel is expensive, airport taxes are expensive - airlines normally make only between 7 – 10% off each ticket, thus resulting in many airline operators shutting down as they cannot access funding to keep them afloat. Regulations and bureaucracy also affect domestic tourism - for instance in South Africa for any investor to operate an airline in the country, it should be 75% owned by a local entity.

Recently, there has been an increase in the number of low cost airlines - Jambo Jet in Kenya, Fast Jet, Fly Safair, Fly Africa and Skywise in South Africa, which has impacted on the prices of flights – they are being reduced. However these low cost carriers do not do long haul flights. Securing funding is challenging too as such airlines like 1time and Velvet Sky were liquidated as a result of not paying creditors on time. Airlines are also increasing their digital presence, which goes hand in hand with improved payment platforms as such it makes it simpler for customers to compare prices and easier to make flight bookings.

Going forward, there is an expected focus on developing domestic markets; for example, Shot Left in South Africa. Cheaper alternatives are likely to remain a challenge in most African countries i.e. accommodation and food. More airlines are expected to enter various countries as governments relax FDI policies. Airlines like Fly Africa have started expanding to various markets. Differential pricing is likely to be introduced in most African countries in order to encourage locals to travel and more payment options are expected to be introduced in other African countries like M-Pesa in Kenya, Eco-Cash in Zimbabwe and FNB Cell-Pay Point currently used by Mango Airlines in South Africa.  Also Strategic partnership between retailers and suppliers of tourism services will continue to help develop Domestic Tourism, like the partnership between Edgars and Mango Airlines in South Africa.

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