Nigeria boasts of the largest travel market anywhere in the world but have been constantly short-changed especially by foreign countries because of imbalance in certain agreements that have been signed leading to the non-development of strong players in terms of airlines. This development in the nation’s travel business according to managing director, Scribe Global Services, a travel agency, MR. OLUWAGBEMI AKINBORO is the negative impact of the absence of national carrier. In this chat he gives his opinion on matters relating to travel and how the development and establishment of a viable national carrier can grow the travel industry.
Sir, what is your assessment of the travel industry in Nigeria?
Travel industry is still at infancy level in Nigeria. There are still a lot more to do concerning the industry as most travellers are still in the old traditional way of just wanting to travel and book hotels, but travel business worldwide has gone beyond that to a total package service that involves everything ranging from tours, hotels, pleasure and having a company dedicating aircraft for just holidays, car rental, escort services, family settlement programme, expatriates programme where experts are brought all over the world on behalf of a company to access their business and help them grow. Globally now, the travel industry is huge and fast growing in Asia, Europe and America and Australia, but in Nigeria, we are still struggling to move to the next stage.
Mr. Oluwagbemi Akinboro, MD Scribe Global services
There has not been significant growth in the sector right now because the government is not doing enough to help the travel industry. One major challenge is the absence of a national carrier for Nigeria, which has enabled foreign carriers to continually dominate our airspace and cart away billions of naira from our economy annually without reciprocity from us.
Nigerians are regularly exploited by these carriers, but on a second thought, you can’t blame them because they are in the business to make money. The airlines too argue that they pay lots of taxes flying into Nigeria, which they have to add up to their tickets. The actual fare is not so expensive, but the taxes when added up to the fare make it expensive for an average traveller.
Also, we still need to expand our tourism potential in this country. There are several tourism areas Nigeria can showcase to the world, but these are flagrantly abandoned. The ones that are available are not been properly packaged while those in charge are not seeing new ideas in the industry. It is a undeniably a huge market and Nigeria is large. We have great tourism sector in Kenya, South Africa, Tanzania and Ethiopia. Those countries have well packaged tourism that attracts people to their countries and earn billions from tourism alone annually, but in Nigeria, what do we earn from the sector yearly?
Some airlines especially foreign carriers recently cancelled commissions hitherto paid travel agencies, what is your view about this?
There is little or nothing we can do about this development because it is their business. Inasmuch as they see our economy as a growing economy and as a business based area, the individual agency operator will have to adjust since we don’t have our own airlines to compete with them, they are the ones airlifting our passengers. Whatever they throw at us we grab. The economy itself has not been encouraging full participation of agencies, but not all of them have cancelled commissions paid to agencies.
The fact is that some of them still give, but have drastically reduced their commissions. The truth as it is right now is that without their planes, we can’t fly our clients anywhere.
Then, what is your take on the planned reestablishment of national carrier for Nigeria?
Personally, I would say a national carrier as far as a country is concerned is inevitable because when you go to other countries you see their national carriers flying their flags, but the same cannot be said of this country. It’s a sad story that our national carrier became extinct due to some government policies, but if I would suggest, there is an every need to have a national carrier.
But, having said that the national carrier when put in place should not be fully dependent on government and should not be owned 100 per cent by the government. There should be private-public-partnership in the national carrier. Let it be run like a business and not like government organisations where government can control the Chief Executive Directors, CEOs. If you run it as a business concern, put qualify people there and not because of my closeness to the Minister of Aviation.
National Association of Nigeria Travel Agencies, NANTA, recently called for agencies to merge and consolidate their businesses for improved performance, what is your take on this?
Merger and consolidation is good for the industry, but companies coming together too must have same orientation and belief. Banks merged for better performances and coordinated services. Personally, I would say for the agencies, it is for them to improve their performance and take the business to another level. If five or 10 agencies can come together and pull their resources together, they can take the travel business from the level we are now to another stage and they would even been able to negotiate more with their clients especially airlines.
Consolidation of companies means bigger money, more creativities, innovations and risk sharing. On the long run, it makes the travel business a lot stronger.
With zero commission, is your company thinking of diversifying its business?
This is very important to the growth of the business in its entirety. Traditionally right now in the country, some agencies just want to ask about your travel plans, which is from destination A to B. I strongly believe that the travel business has grown beyond that globally. There should be a different way of doing business.
The travel business goes beyond ticketing and reservation. Right now, travellers want to have a whole hotel to themselves, their own dedicated aircraft, package holiday, safari, game reserve, boat cruising and lots of things that can be brought together in this business and enhance operations.
What is your relationship with airlines?
We have a good working relationship with both local and international carriers. We have to have it at the back of our minds that these people are businessmen who are into the game to make money, create employment and grow their own operations. Once you are able to sell their tickets well in the range of millions monthly, you are well appreciated and encouraged, but if the reverse is the case, there is no way you can be their friends.
We still have some agencies that get as high as 15 per cent commission from airlines, depending on your performance overtime while some get zero. It’s a situation of ‘let me see what you have and I will give you support.’ If Emirates for instance don’t see you bring certain millions in a month, they won’t care about you, but once you can meet their expectations, they will have a round table talk with you on how to grow your business and theirs. It is a mutual benefit for both parties.
How has the exchange rate affected your business with the devaluation of naira against major currencies?
Well, if you ask me, the dollar is the determining factor of any business in Nigeria, particularly the aviation industry where everything is dollar denominated. The fuel is dollar denominated, the maintenance of the aircraft is dollar denominated, the service charges and others. The moment the dollar starts going stronger against the naira, definitely, the cost of air travels would go high and this is something that we as travel agencies cannot control. It is forces of the market; demand and supply. So, we cannot control that unless if the government do something to bring the exchange rate down.
Airfare is high now and it will continue to go high until maybe there is an intervention from the government to bring down the rate of the dollar, but that notwithstanding, Nigerians are people that love travelling. Still, a good number of Nigerians irrespective of the dollar and airfare still travel. If you go to the airport, you see people still travelling not minding the cost of tickets.
One thing we have discovered in this industry is that Nigerians are very likeable people in terms of traveling. They travel quite a lot and some of them would have saved their money for a very long time to go on vacation with their families and all that and some in the government circle even travel abroad for training.
What we are saying is that irrespective of the exchange rate of naira to the dollar, people do travel, but the volume might be lower than when the dollar was a little bit lower than as we have it now.
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