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The Namibian business travel industry is quite unique in many aspects, but for the most part, very typical when looking at similar immature markets on the African continent – This according to the African Business Travel Association (ABTA).
Where this region is unique is that it is more developed than many markets as far as its infrastructure and technological capabilities, but at the same time quite under-developed in the way the business travel sector operates. For the most part, companies do not have corporate travel managers in place to drive travel policies and in many instances, travel bookings are still done by secretaries, with little or no consolidation in place as far as processes, preferred suppliers or a central point of management and reporting.
When looking around both globally and at other countries on our continent, we know that the key driving force behind the elevation of industry practices is the cutting of airline commissions by the national carrier. Historically we see that when Travel Agent’s no longer earn commissions and begin charging their clients management or transaction fees, not only do they need to be able to effectively and competitively sell their service offering and justify their fees, but the clients also have to begin taking ownership of understanding what it is they are paying for. Commissions unfortunately cause a ‘muddying’ of the waters and we certainly see this in Namibia where little transparency exists as far as remuneration structures. There are certainly some more advanced Travel Management Companies who have moved away from being commission earning agents to becoming fee charging professionals. However, for the most part, the agents who continue to earn commissions will face a very tough up-hill battle when the national carrier does cut commissions one day, or when their clients start asking for those commissions to either be disclosed or event paid back to them, as is often the case in international markets.
Because of commissions, many buyers in the region believe that they are getting a ‘free’ service and while this is the case, they don’t feel the need to manage their company’s travel spend. Unfortunately though, while they are not actively involved in this process, they could unknowingly open themselves up to all sorts of hidden practices, for instance ‘double dipping’ – where a travel agent might be paid commissions by an airline and also charge their clients management or transaction fees – a practice frowned upon in mature markets where only a management or transaction fee is charged and commissions – if any exist – are paid back to the client by the TMC or Agent.
In order for this market to mature in line with global standards, companies need to firstly understand the importance of managing their travel portfolio’s and that the benefits of doing this include cost savings through preferred partnerships and deals; streamlining of processes and procedures; safety, track-ability and well-being of travellers; improved management information and reporting capabilities and so much more. Once the importance of managing travel within the corporate sector is understood, then half the battle is won. In line with global best practice, companies can then put corporate travel managers in place, build and implement travel policies and truly start getting to grips with the travel spend and practices of their organisation. Fee transparency then needs to be a key focus so that the buyers understand what they are paying for and can then compare apples with apples when gauging the suitability of the products and services they are being offered.
The African Business Travel Association (ABTA) will be hosting its second travel management forum in Windhoek on 25 April at the Windhoek Country Club. "We look forward to engaging with corporate travel bookers and buyers, as well as local business travel professionals who have a keen interest in elevating their industry in line with global best practice in order for this region to become a shining beacon of possibility on the African continent" says Monique Swart, Founder of ABTA.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
