Travelstart

T R A V E L S TA R T

TRAVELSTART

First Class Travelstart Flying High in Booming

African Tourism Sector PRODUCTION: Karl Pietersen

Ever-evolving online travel agency business, Travelstart, is investing in growth by targeting new geographies, new verticals and new customer groups. In its 20th year, the company is celebrating the success of its brilliant app called Flapp, and Managing Director Jerome Touze is looking forward to an increasingly international future for the company.

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In 2018, hotel occupancy rates in Africa increased on average (compared to 2017) to 60.6%.

In South Africa, Cape Town remains the star, with occupancy rates and average daily rates exceeding all other cities.

This success is paired with a favourable environment in the air travel industry where African airlines posted the second fastest growth rate in the world in August 2018 (6.8%), according to a report issued by the International Air Transport Association (IATA). The report also highlighted the huge

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potential for expansion, citing Africa’s population of more than 1.3 billion only accounting for 2.2% of global air traffic. Africa’s tourism industry continues to boom in terms of visitor numbers. In 2017, the continent hit a 63 million high in international tourist arrivals compared to 58 million in 2016. A growing population with more disposable income and access to an increasing number of low-cost airlines has also fuelled the growth of domestic tourism, and travel and tourism now contributes around 8.1% to Africa’s

GDP. With all figures expected to grow, and with governments highlighting tourism as a creator of jobs, those active in the industry are excited.

Jerome Touze, Managing Director at online travel agency Travelstart tells Enterprise Africa that the industry is indeed booming and this is encouraging Travelstart to invest in growth.

“Travelstart is turning 20 this year and we have a lot going on with many celebrations to look forward to.

“There have been a lot of things that have been done to bolster tourism

INDUSTRY FOCUS: TRAVEL

and attract tourists into South Africa, but domestic tourism has also received a lot of attention. At township level, there has been a lot of effort to drive empowerment and entrepreneurship.

South Africa Tourism has done a great job working with local tour operators and working in developing the micro economy in the country.

“We are a big player in the domestic market. We bring people to South Africa and we take people outside of South Africa. Looking at South Africans, where do they travel to most – Namibia, Mozambique, Mauritius, Indonesia, Thailand, USA, UK to name a few, and we can cater for all of these needs.”

1 MILLION DOWNLOADS Through the Travelstart website, customers can look up, compare, book and pay for flights, hotels and car rentals, among other amenities. The process is simple, easy and fast. In 2015, helping to make things easier, simpler and faster, the company developed an app called Flapp for mobile use, and the booming tourism market

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has helped drive success of Flapp.

Initially launched as an app purely for commuters servicing primarily business travel between Johannesburg and Cape Town, Flapp now offers flights to all destinations on all airlines, a handy extension of the Travelstart website.

“The adoption of mobile technology in emerging markets is a lot faster than what you might find in the Western world, explains Touze. “In South Africa we have seen very positive adoption of our mobile app. We have just celebrated download number one million so we have a promotional activity going on. Currently, desktop is the bigger driver of volume but that is changing very quickly. We have a large number of searches through mobile, and not just through the app, also through our mobile website. We are also seeing greater conversion on our app. This is not just a Travelstart trend, it’s something that you will see across most ecommerce companies. It’s a great product and our developers have done a fantastic job. Customer acquisition and retention are vitally important to us

and we like to do it through channels that are more cost effective - Flapp gives us that opportunity.”

As well as pushing Flapp, Travelstart is looking to grow its share of the expanding market by increasing and improving the services it offers. “We definitely have ambition,” laughs Touze.

“The moment you think you have conquered a summit is the moment you are in trouble. We will never be complacent even with a strong market share where we have been active for many years.”

He explains that Travelstart has been predominantly orientated around flights and that remains the bulk of what the company does today, but he recognises that there is so much more to the pure flight booking. “Whether it’s travel insurance, seat selection, meal selection, flexi tickets – these are some of the services we will look to optimise further in 2019 and beyond.

“We can also do a better job when it comes to customer satisfaction. We have proved on many occasions that our processes can be refined and that comes down to coaching, training, ability to upsell, active management on the floor and the desire to deliver positive customers experiences through people and technology.”

GLOBAL TRAVEL AMBITION Jerome Touze, originally from France, started with Travelstart in 2018 as Chief Marketing Officer before being promoted to Managing Director in January of this year. The company now has offices in Cape Town, Lagos, Nairobi, Cairo, Dubai, Athens and Taipei.

“This is no longer just a South African story; this is a global story,” says Touze. “Our additional hubs are becoming increasingly important.

The Nigerian market is showing huge potential. We have an operation in Lagos with around 50 people and we also have an operation in Dubai where we have been experiencing very strong growth in the MENA region. Our group CEO will be travelling to those

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parts of the globe to look at corporate opportunities beyond what we have been doing in South Africa.”

And, like in South Africa, Travelstart will look to dominate the market across all verticals in these new geographies after flying high with success from its core market of flight bookings.

“We are very keen to hone our position in Nigeria and the Middle East. They are two huge markets for us and we have invested a significant amount of time and money. We are seeing an increase in market share which excites us.”

Another area where the company is targeting increased market share is with business travellers. Travelstart is already catering for those who commute or travel for work purposes but the target for the future is to deliver a bespoke solution for companies with employees

who move around on a regular basis. Recently, Travelstart launched Travelstart for Business, a business travel booking and reporting tool offered to companies and individuals globally, where businesses can book travel, add travellers and monitor business travel through reporting tools. Travellers can toggle between their personal and business travel accounts with ease, enjoying the same simple booking flow on both. In addition, business travellers can benefit from negotiated fares, corporate deals, no setup fees and round-the-clock customer support.

“We are very excited about the B2B market,” admits Touze. “Look at the amount of companies that exist in South Africa, with hundreds of employees, where a percentage travel regularly.

Those travellers don’t always have an outsourced travel procurement agency

and they will often book their flights and hotels in the same way we might book in a personal capacity. In December 2018, we launched our B2B platform and many exciting features will be rolled out in the coming months.”

Currently, the commuter routes that connect Cape Town’s International Airport, Johannesburg’s O.R. Tambo and Lanseria Airports, and Durban’s King Shaka International are the most popular in Africa and Travelstart sees an opportunity to capitalise on the traffic in the skies.

“80% of what we sell is domestic but it varies depending on season. A typical customer is a business traveller who commutes between Cape Town, Johannesburg, Durban and the other city hubs. We are a big volume driver of seats in those corridors,” says Touze.

Now flying twice a day between Johannesburg and London Heathrow.

Visit www.travelstart.co.za or call 021 486 4300 to book.

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COMPETITIVE MARKET Getting Travelstart off the ground in South Africa and up to cruising height has been no easy feat. There are numerous strong competitors in the local market, and many international players that offer services of a similar nature. For this reason, the company has to remain lean and innovative, while always focussing on service delivery.

“Customers will always have a choice and so we want them to have Travelstart at front of mind when it comes to fulfilling their needs,” says Touze.

He highlights the fact that customers can still book their flights and services directly through airlines or hotels, and competitors remain who offer alternatives such as physical outlets and presence across international markets. But he also states that Travelstart is technologically advanced and has an employee base with unrivalled experience.

“What I like about the proposition of Travelstart is the no fuss element – it’s very simple. You go to the website and it does what it says it will do. It’s clean and sleek, there’s no clutter. The website is light and delivers a simple message. It’s about the authenticity in the message, the price and the speed of technology. Some of our peers to do not have this cutting-edge technology.

We’ve been doing it for a long time and we attract talent, and that brings us differentiation,” states Touze.

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“People start paying attention as your audience grows,” he adds.

“Travelstart is now a big volume driver and so many doors have been opened.

But, while we work closely with the airlines, we also compete. People can go directly to the airlines, or they can go to Travelstart where they get great range, speed, simplicity and price – one of our key differentiators. We do have to work hard at it, and we dedicate people to work on our partnerships with airlines and other businesses. We have to ensure we are delivering value for them.”

But competition, according to this self-confessed optimist, is a welcome ingredient in any successful recipe.

“It’s good for customers,” he insists.

“It goes back to not taking anything for granted – just because you have strong market share, it doesn’t mean you can relax. The simplicity of our delivery along with the execution of what we provide is our true differentiator.”

STEEPED IN SA HISTORY The roots of Travelstart go back to the late nineties and to Sweden, where former DJ Stephan Ekbergh had established the business in Europe, but had seen chance in South Africa after being frustrated about the challenges he faced when travelling in Africa. It was not easy to get online and search for flights or accommodation, and reliable online travel agents were few and far between. The entrepreneur saw the opportunity and

// THIS IS NO LONGER JUST A SOUTH AFRICAN STORY; THIS IS NOW A NIGERIAN STORY, A KENYA STORY, A MIDDLE EASTERN STORY // moved out to Cape Town, learning the SA business beat, and never looking back.

“He started it in Sweden in 1999 and then came out to South Africa on holiday and realised there must be a better way to plan travel around Africa. Of course, he was blown away by the incredible beauty of Cape Town and he wanted to set up shop here. Today, he has been in Cape Town for more than 20 years,” says Touze, a long-time friend of Ekbergh.

“Stephan and I go way back,” he adds. Touze, a fellow entrepreneur who founded travel social media network wayn.com in 2002, was approached

by Ekbergh and team to help develop the business further in Africa, using his experience of the travel industry.

“I sold wayn.com to lastminute.com in 2016 and 18 months later, I met with Stephan. They were doing some very exciting things. When the opportunity to join the team presented itself, I seized it with both hands.”

Ekbergh, according to Touze, remains very hands on in his role as Group CEO and will spend more time moving forward looking at additional opportunities in and outside South Africa which could complement the growth of the company.

“He is an incredible guy, very humble and down to earth, and that was one of the things that attracted me to working with him. From one entrepreneur to another, you can relate to the stories that entrepreneurship brings – there is such a thin line between success and failure. We have both gone through the challenges of fund raising and macroeconomics and we can relate.”

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// SOUTH AFRICA BRINGS HUGE POTENTIAL AND THERE IS MUCH MORE FOR US TO DO – WE ARE YET TO EVEN SCRATCH THE SURFACE // As well as investing heavily in the customer experience, Travelstart is a modern employer and invests comprehensively in its staff. Significant time, money and thought has been invested into the company’s HQ, just off Cape Town’s Kloof Street, creating an environment perfect for creativity and imagination. Large and open meeting spaces, enclosed individual work zones, lots of glass, and contemporary décor throughout create a home where employees like to stay.

With more than 350 ambitious people focussed on delivering for the customer, Touze remains enthusiastic about Travelstart’s future.

“I am a positive and bullish person.

Looking at South Africa and all the challenges it has from an investment perspective, it still presents so many opportunities and I am very excited.

The next levels for us are tapping into

the verticals and tapping into new geographies,” he says.

Even through the challenges that the company has faced right on its doorstep, where Cape Town tourism has seen a slump thanks to water restrictions and the ‘Day Zero’ campaign, Travelstart will continue to encourage tourists and commuters to travel.

“Last year, the Western Cape was hit by a severe drought and that was extremely damaging. A lot of action was taken by the government and private sector. A lot of education was needed, for both local businesses and tourists, and although this was for the greater good, it resulted in a big knock on effect in the tourism industry. There is a time lag with these things and, even though water supply is back up to more than 60%, we will not see a resurgence in tourism overnight.”

Africa’s share of global air passenger

traffic is expected to grow by 4.9% annually over the next 20 years and tourism is expected to contribute more than 12% to the continent’s GDP in coming years. Job numbers in tourism are expected to rise by around 3% each year as this burgeoning industry becomes one of the main engines of growth. Asked for his personal thoughts on the prospects for Travelstart in such an exciting sector, Touze is clear: “Travel is not going away. People are always going to travel. They are still going to book flights so that they can handle their business. Disposable income continues to increase. South Africa brings huge potential and there is much more for us to do – we are yet to even scratch the surface,” he concludes.

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