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Understanding
BUsiness travel
in sUB-saharan
2014
IN COLLABORATION WITH
COntent
Foreword
Introduction
Research overview
Executive summary
13
Airlines
14
Hotels
17
20
23
Technology
25
Payment solutions
29
Visas
33
A travellers perspective
35
36
Action check-list
37
40
Our partners
41
45
With thanks
46
Glossary
47
FOREWORD
intrOdUCtiOn
There is no global without Africa, said Ilona de March,
EMEA President BCD Travel at ABTAs recent launch
in Nairobi. Yet its very apparent that when large
organisations laud the performance of their global
travel programmes, they are not always delivering
excellence for travellers to, from and within Africa.
Buyers complain TMCs are not always capable of
delivering the joined up service promised across
the region. Challenges exist in some of the more
basic building blocks of managed corporate travel
such as card issuance, availability of robust data
and lack of billing and settlement plan (BSP) in some
markets. TMCs, especially in markets still paying
airline commissions, are not aligned to add value to
buyers and in many developing countries still refer to
themselves as travel agents, which will irk many travel
buyers. Company governance plays a part too. A travel
manager looking after 50+ markets will inevitably focus
most attention on the largest spend, especially with
our research showing that more than 80% of travel
managers based outside Africa have never been there.
Spend may be low, but this should not mean Africa is
off the radar.
One travel manager who looks after many markets points
out, you need to have a strategy to manage smaller yet
growing markets. There should be no surprises.
But there are also myths that need to be addressed,
such as fraud. Some buyers revealed a move away from
card payment in Africa, yet South Africa has less card
fraud than the United States.
The net result in all this is that only 47% of buyers
surveyed are able to produce automated traveller
tracking reports. 58% are not receiving data for African
offices and when they do get it, 32% consider the data
to be poor.
INTRODUCTION
researCh Overview
BaCkgrOUnd
and aPPrOaCh
The project team conducted
over 170 engagements with travel
industry stakeholders through in
depth interviews, lighter workshop
and feedback sessions and focus
groups. These sessions covered
stakeholders based across Africa
(Angola, Cote DIvoire, Ghana,
Kenya, Nigeria and South Africa),
and stakeholders based outside
Africa with responsibility for travel
to, from and within the continent
which included travel professionals
based in Germany, Netherlands,
UAE, UK and the US.
ENERGY
MINING
12%
MEDIA/
ENTERTAINMENT 2%
PHARMA
5%
FINANCIAL
SERVICES
8%
LOGISTICS 2%
PROFESSIONAL/
BUSINESS SERVICES 4%
IT/TELECOMS
7%
RETAIL
5%
MANUFACTURING 3%
FMCG
5%
EDUCATION 2%
GOVERN
MENT
8%
OTHERS
6%
NOT
FOR
PROFIT
3%
TRAVEL
AGENT
26%
HOTELS
9%
GDS 6%
TMCs
32%
OTHERS
6%
AIRLINES
15%
Engagement by country/region
-total 166
160
153
140
120
100
80
60
40
20
0
23
24
37
34
1
34
2
Region
Country
RESEARCH OVERVIEW
exeCUtive sUmmary
BaCkgrOUnd and researCh
White paper developed for the business travel industry,
to support African growth using three key principles:
seek innovation, reflect all Africa and recommend actions
The 3 pillars of research:
Intensive buyer benchmarking exercise: with over 160
engagements in 11 countries (6 in Africa, 5 global)
Stakeholder interviews
Wider macro economic research: such as industry
bodies, regional economic communities, government
bodies and wider business media
findings
Governance and travel policy:
The nuances of travelling in Africa are rarely addressed
in global travel policy
Travel managers (local or global) need to increase their
knowledge of Africa and build creditability with business
heads - best way to do this, is to travel themselves,
which they rarely do
For many large companies, Africa is a subset within
EMEA, creating unrealistic time pressures on staff
to effectively manage this growing region. More
thought should be given to company structure to
effectively govern
Technology:
Appetite for technology is high yet apart from online
booking for South Africa domestic travel, take-up of
technology within travel programmes is poor
Africa should be leading the way in many global
organisation travel programmes, for adopting or testing
technology solutions
Mobile is a key differentiator for Africa and mobile
internet usage is developing faster, and in ways different
to elsewhere. Mobile is dominating and whilst there
are some challenges with connectivity, these are
being addressed
Travel managers should be more aware of technology
developments, such as roaming charges, devices used
and opportunities through video conferencing
Technology is within reach, regardless of a buyers or
TMCs size
GDS should be treated as a primary supplier, rather than
merely a technology decision made by the TMC
Payment:
Manual payment methods such as cash and invoicing
dominate with low use of card products, particularly
outside of South Africa
Unlike other regions, a single form of payment for travel
is unrealistic in this market. Buyers should evaluate
and select a suite of payment options, which assesses
the true costs and risks, whilst balancing efficient
reimbursement of employees payment of suppliers and
provision of actionable and relevant data. You must
ensure accuracy, transparency and auditability
Airlines:
Buyers are frustrated through lack of capacity and direct
flights, high fares, taxation, safety and service received
Quality is improving and opportunities exist, smarter
buying driven by better data and improved technology,
enabling travellers to make more informed travel choices
TMCs buyers and airlines should partner on route
development
Hotels:
Economic growth, combined with long lead in times for
hotel development is creating capacity constraints and
high rates in key markets, such as Angola and Nigeria
Buyers must:
Create strong partnerships with critical hotels
focusing on paying promptly and becoming the
customers of choice
Fully understand their demand by ensuring that they
understand all their hotel requirements, through
development of better data
Create smoother booking processes for users and
ensure that if they have a policy of booking through
a TMC, this is enforced through having correct
content available
PART 1
afriCan CUltUre
and
dOing BUsiness
afriCa in nUmBers
mOre than a single stOry
Addressing academics at Oxford University, Nigerian
author Chimamanda Adichie recounts the story of a
flight from Lagos to London. Shortly before landing,
passengers were asked to donate to the airlines
chosen charity. The money will help projects in India,
Africa and other countries, announces the flight
attendant. Referring to Africa as a country left the
writer feeling rather annoyed, but also vindicated.
She was touring with a speech, entitled The Danger
of a Single Story, highlighting how ignorance creates
false perceptions.
Africa in Numbers
CHINA
1.35Billion
AFRICA
1Billion
54
TOTAL
POPULATION:
LANGUAGES
SPOKEN:
1BN
>1000
TOTAL
LANDMASS:
China
Over a Thousand
different languages
are spoken in Africa.
Europe
Western
India
ates
United St
Me
xic
o
NUMBER OF
COUNTRIES:
Japan
AFRICA IN NUMBERS
diversity
According to The Economist, West Africa has six of the ten largest
growing economies in the world, though it must be remembered that
in global terms they are starting from a low base. New wealth and
opportunity is not, however, blessing every country. In 2013, the World
Economic Forum (WEF) Africa competitiveness report found that 14 out
of the 20 least competitive economies were also in Africa.
But change is afoot in many places. Nine of the 10 fastest birth rates in
the world are in Africa. More than half of the population is under 20
years old. Analysts predict the working-age population will surpass China
within three decades. While according to consultancy McKinsey, more
than half of households will have disposable income by 2020.
1971
1982
1992
2002
2012
AFRICA IN NUMBERS
BUilding BriCs
Foreign investment is the continents key economic
driver. A report published in 2014 by the African
Development Bank, the United Nations Development
Programmes and the Organisation for Economic
Cooperation and Development predicted it would reach
$80 billion by the end of the year. As of 2012, France,
the UK and the US topped the charts with a combined
investment of $180 billion. The Brics nations - Brazil,
Russia, India, China and South Africa - spent $68 billion,
40% of which was spent by China alone (see box on
next page). The report predicted economic output for
the continent would grow 4.3% in 2014 and 5.7% in 2015.
Some of the biggest economies in East and West Africa
are expected to enjoy the highest levels of growth.
2001-2010
2011-2015
5
Angola
11.1
-----------------------------China
10.5
-----------------------------Myanmar
10.3
-----------------------------Nigeria
8.9
-----------------------------Ethiopia
8.4
-----------------------------Kazakhstan
8.2
-----------------------------Chad
7.9
-----------------------------Mozambique
7.9
-----------------------------Cambodia
7.7
-----------------------------Rwanda
7.6
------------------------------
China
9.5
-----------------------------India
8.2
-----------------------------Ethiopia
8.1
-----------------------------Mozambique
7.7
-----------------------------Tanzania
7.2
-----------------------------Vietnam
7.2
-----------------------------Congo
7.0
-----------------------------Ghana
7.0
-----------------------------Zambia
6.9
-----------------------------Nigeria
6.8
------------------------------
2
1970s
1980s
1990s
Asian
countries
2010 estimate
2000s
2011-15
African
countries
forecast
AFRICA IN NUMBERS
10
fUtUres
Shareholder return on investment in the energy sector
has proven to be lucrative and has therefore attracted
the lions share of foreign investment. Dedicated
equity funds, including sovereign wealth, pensions and
investment banks from across the world all have high
stakes in these industries. However, some analysts and
commentators argue that profits from natural resources
rarely trickle down to the majority of a countrys
population. There are indirect benefits to local
economies where, for example, refineries and mines
are located, but the profits are more often than not
confined to a small number of participants. The advent
and development of other industries has been largely
responsible for broader wealth creation. Agribusiness
is one of Africas largest sectors. Telecommunications,
banking, retail and construction are also creating jobs
in new areas. The knock-on effect is increased
consumer spending that has driven the growth in the
retail sectors.
AFRICA IN NUMBERS
11
COrrUPtiOn
In 2013, SSA was perceived to be
one of the most corrupt regions in
the world according to a study by
Transparency International. Not one
single African country appeared in
the top 30 least corrupt nations.
Countries such as the UK, have tried
using aid programmes to positively
influence the issue. This year, for
example, it suspended aid to Uganda
over fears of corruption. Whether
these tactics are successful or not
remains to be seen. The challenge
for many businesses setting up in
Africa for the first time is accepting
that corruption and bribery are
entrenched in many of the cultures.
Kenneth Ekrete, director of GSM
travel agency Network Travel Nigeria,
calls it the Africa syndrome. [In
Nigeria] you have to pay people to
do the most basic tasks, he says.
It is expected, and it starts when
you arrive at the airport. Levels of
corruption differ from country to
country, but preparing to face the
issue is a fundamental element of
enterprise risk strategy.
gOvernment BUreaUCraCy
Setting up a new business or opening an office is no simple matter in
almost every SSA country. Dealing with local authorities, government
bureaucrats and politicians can often feel like pushing water up a hill.
A starting point is to understand the legal and regulatory environment
of the country in which one is operating. How stable is it socially,
politically and economically? In some countries a joint venture with a local
business is necessary to obtain permission to start up. Due diligence and
background checks on partners are important, but it will by no means
guarantee clarity or assurance. Local content is a phrase businesses
will hear a lot across Africa. It is a commitment by foreign investors
to employ local people and, as far as possible, source local products.
Local authorities will often seek a certain level of commitment to local
content when a business is being established. Chris Dell, a director for
risk specialist Drum Cussac, says: It is important across most of Africa
to understand community relations and how you engage with the
local community surrounding any project. Getting that piece right can
neutralise some potential threats. Its about understanding the political
and social context into which you are investing. Depending on the scale
of a companys operations, it may also be important, for a number of
reasons, to take national elections into account such as in Nigeria in 2015.
Firstly, they often bring instability. Secondly, a business must evaluate
what may happen depending on who wins. A Drum Cussac client recently
decided to wait until an election result was returned before committing to
a significant investment.
12
PART 2
the
BUilding BlOCks
Of
managed
COrPOrate
travel
airlines
what travel BUyers say
1. Is a time window used to identify the
benchmark fare? Yes - 68% No - 32%
Time windows used to calculate lowest fare
range from 1 hour to 24 hours of requested
flight time
3 hours - 5%
4 hours - 25%
6 hours - 5%
8 hours - 5%
14
flying rights
An Open Skies agreement was
signed by 40 African states in
1988 in the Cote DIvoire city of
Yamoussoukro. The Yamoussoukro
Declaration (YD) was supposed
to compel governments to open
up their air space to the aviation
marketplace, which would in turn
help improve safety, increase traffic
and lower air fares.
However, it failed to gain traction
and government protectionism
of national carriers prevented
deregulation.
In recent years some governments
have realised protectionism stifles
economic prosperity, but not
everyone is on the same page yet.
A would-be one-hour flight from
Luanda to Kinshasa, for example,
would take a traveller at least ten
hours and possibly an overnight
stay in a hub airport in South Africa
or Kenya because no bi-lateral
agreement exists between Angola
and the Democratic Republic of
Congo (DRC).
Countries that have embraced
change, such as Ethiopia and Kenya,
are reaping the benefits. Even those
who have ditched their national
carriers and opened up to the
marketplace, such as Ghana and
Nigeria, now have more efficient air
services, with better safety records
and more competitive prices.
Furthermore, the money saved
by not having to prop up an ailing
national carrier can be spent
improving the efficiency and safety
of air transport infrastructure.
Progress is slow, but it is real.
safety
According to IATA figures, African carriers have been responsible for a
disproportionately high number of accidents compared to share
of traffic.
Afraas view is that a very poor regulatory environment fuelled by
ongoing conflict in the Democratic Republic of Congo and Sudan, has
been the cause of at least 50% of incidents.
In 2005, safety fears led the European Union (EU) to ban a number of
carriers from flying into EU airspace. More than 100 of those blacklisted
were African carriers, although a large number were domestic carriers
incapable of flying to Europe anyway.
This certainly did not help the already tarnished reputation of the
continents airline safety. Experts point out that it is not just poor safety
that will land an airline on the EU Banned Airlines list, but also poor
financial transparency. Duty of care policies within many international
corporations still prevent business travellers from flying on banned
carriers at all, leading to indirect flights or the chartering of aircraft.
Since then, efforts have been made to improve the continents
performance. The Africa Safety Improvement plan was introduced in
2012 which requires all airlines to become IOSA certified by the end of
this year. Afraa says that safety levels for certified airlines are already in
line with the best world standards.
COst imPliCatiOns
Expensive airfares and taxation are key concerns for travel buyers in
the region.
The African Development Bank (AfDB) report that air fares in Africa
are around a third higher than equivalent journeys in Europe.
Air space restrictions and poor fleet utilisation keep the cost of a seat
disproportionately high on some airlines. Airlines who cater to high yield
business passengers who prefer to sleep overnight on the way down
to any number of African hubs, compounded by nighttime curfews at
European and North American airports result in aircraft sitting on the
tarmac all day.
KLM operates a profitable daytime service between Europe and South
Africa, and the advent of on-board Wi-Fi, means business travellers can
remain productive mid-flight. The Middle Eastern carriers, on the other
hand, are not restricted by nighttime curfews at the Gulfs airports and
so have more flexibility with scheduling.
AIRLINES
15
aCtiOns
TMCs and buyers should lobby airlines to fly
more direct routes. Data should be shared
with airlines to help them build and develop
case studies for more direct routings.
Include instances where buyers have
resorted to chartering aircraft.
Ensure that your lowest logical fare
calculated is suitable for business priorities.
For example: to obtain best fares you
should encourage travellers to be as flexible
as possible through choice of time, carrier
and even airport.
Consider using premium economy products
which will become more prevalent in this
region in the coming years - either to
upgrade or to downgrade. This will be a
possible strategy to reduce often exorbitant
prices in this region, while getting your
travellers where they need to be in
relevant comfort.
taxatiOn
The aviation industry brings huge revenue and economic
benefits into many African countries, but government
taxation is cited as a major barrier to growth. Travel
buyers in SSA rate this as one of their top challenges.
Globally, fuel accounts for between 30-36% of an airlines
operational costs. In Africa, this is 45-55%.
AIRLINES
16
hOtels
In August this year, the CEO of Marriott revealed the global hotel chain
was investing $200 million in Africa, opening 36 new hotels, hiring
10,000 employees and expanding into 16 countries. Marriott is the
largest hotel operator in Africa. In 2014 it acquired 116 properties from
Protea Hotel Group.
Not far behind is Carlson Rezidor, which has 30 hotels with 6,300 rooms
under development across the continent. The global hotel chains,
including Hilton and Starwood brands, are scrambling to shore up a
share of the burgeoning marketplace.
Progressive African governments are also supporting investment in hotel
properties. Ethiopia has recently spent millions attracting and working
with some of the worlds biggest brands. The InterContinental Group
opened a five-star property in Addis Ababa back in 2008. Others are
now reportedly on the way. In 2014, Angola announced that its $5 billion
Sovereign Wealth Fund would invest in infrastructure projects, which
would include new hotels. According to Ernst & Young, Nigeria has the
largest pipeline of new hotels in the region with 7,500 rooms added
in 2013, an increase of 10% year on year largely to support increased
business travellers drawn to the countrys natural resources.
HOTELS
17
at yOUr serviCe
Service levels in global chain hotels in Africa can fall far
short of what would be expected by the same brands
in Europe or the US. It is difficult for hotel managers
to attract educated and experienced staff to work as
waiters, porters, and front-of-house staff. The problem
is less noticeable in South Africa where the service
sector is relatively mature. Cities like Cape Town and
Johannesburg also benefited from the huge investment
in hospitality associated with the 2010 World Cup.
However, for owners and managers in West Africa,
where more than half of the continents hotels are
being developed, training and recruitment is among
their biggest challenges.
alternatives
In more stable areas, the use of guesthouses by
African business travellers has increased in recent
years. It is popular in South Africa, and in some other
markets such as Angola and Mozambique, where
chain hotels are less prevalent. The presence of these
independent properties in corporate programmes
has increased by some 30%. However, international
travellers are far less likely to book and use these types
of accommodation. In the energy and mining sector,
use of company run compounds is highly prevalent,
particularly in remote areas.
Of trends in the region, Caroline Daniel: Account
Director Africa for Preferred Hotel Group, says Another
trend that is becoming more popular within Africa especially in cities where stays are for a week or more
- are boutique hotels, with serviced residences and/
or apartments attached to it. This type of offering
ensures that travellers have hotel facilities including
spas, bars and restaurants at their disposal, but also
have accommodation that is more spacious and
comfortable for longer stays, as well as the option of
cooking their own meals or bringing in a personal chef.
This significantly reduces the costs associated with
corporates running compounds and in the energy /
mining sector, managing any reduced demand periods.
dOing deals
Travel buyers take a number of approaches to
negotiating rates with hotels in Africa. Many start the
process with central talks. But real value can be derived
from local negotiations. Buyers have been relatively
successful negotiating ancillary services such as
Wi-Fi, but often the hotel stipulates a daily limit which
the buyer needs to ensure meets the demands of
the traveller. With certain cities having appalling traffic
by western standards, total cost of ownership (TCO)
becomes very important when selecting hotels in many
African cities. Buyers need to bear in mind long transit
times (and costs) when staying at alternate hotels versus
staying at the venue of the conference or meeting.
HOTELS
18
aCtiOns
Best practice is to drive bookings through
the TMC - buyers must challenge the African
invite culture (where the local office will
offer to book your hotel) and ensure they
know where their travellers are staying.
Examples include: manual expense checks,
or a TMC using a reason code to denote that
policy has not been followed.
At a minimum, the TMC can capture the
reason for non-compliance.
Communicate internally to dissuade travellers
from booking hotels locally for guests,
instead recommending hotels to be booked
through an employees home TMC.
Ensure that all travellers, be it local or global,
have access to the same hotels - a local list
of hotels will only seek to dilute spend and
damage leverage.
Ensure hotel data is captured, and that travel
managers can locate travellers in the event of
an incident.
HOTELS
19
tmCs
what travel BUyers say
1. What TMC strategy do you deploy in Africa?
Globally consolidated TMC - 45%
Locally selected TMC - 55%
Of those locally selected, 30% currently
investigating options to achieve benefits
of consolidation.
2. Companies with Service Level Agreements
and/or Key performance Indicators in place
consistently with their TMCs:
Yes - 48%
No - 52%
TMCs
20
BsP
Fundamental to the TMC model is
accreditation to the International
Air Transport Association (IATA) and
its billing settlement plan (BSP). BSP
allows TMCs to sell airline tickets on
behalf of IATAs member airlines, and
to pay monies collected by monthly
remittance. The system improves a
TMCs financial control and cash flow.
If BSP is not in place, an intermediary
has to set up a line of credit with
each airline.
The challenge for many TMCs and
agencies in Africa is that BSP is not
always available. Angola and the
DRC are among 15 countries that still
dont have the option to apply for
accreditation. Rwanda was the last
country brought into the IATA fold in
2013. In Angola, intermediaries have
to lodge a bond with a Portuguese
bank to obtain credit from an airline,
an extremely costly administrative
process. Some 60% of intermediaries
in the former Portuguese colony
describe themselves as travel
agents rather than TMCs, and airline
commissions still drive the market.
Where BSP is available, the
intermediary lodges a bond with IATA
directly, and then has to continuously
meet a number of accounting
processes and procedures.
From the buyers perspective,
agencies and TMCs with BSP offer a
more robust proposition than those
without it. Unfortunately, dealing with
non-BSP travel agents is a reality.
Buyers, therefore, need to create
effective strategies to deal with the
associated challenges.
COntraCts
Contracts provide written agreement on what is being purchased and
ensure clear communication on services received and fees paid. They
can also ensure that a companys reputation and personal information
is protected. Feedback is mixed on whether most clients have contracts
in place with their TMC. Some TMCs said almost all of their clients had
contracts in place, particularly for government business, or clients
in South Africa needing to report for Broad Based Black Economic
Empowerment (BBBEE) purposes. Others report as little as 30% have
contracts, with Nigeria and Angola even lower still.
hUBBing
To achieve greater consistency from an African travel programme,
many travel buyers consider establishing multi-national service centres,
sometimes referred to as hubbing. Rather than employ individual
TMCs in every market, a central point for the continent is set up in a key
location. For travellers, it can minimise the impact of poor service and
processes across a number of markets.
There is a lot to be considered if this approach is taken. If a business
has a multi-country operation including, for instance, Angola, the
agency staff will have to support the Portuguese language. Time zones
and national holidays must also be factored in to staff scheduling and
opening hours. Each marketplace may use a different currency, which
may require ticket fulfillment to be carried out locally. There may also be
an issue with local content, meaning some airlines and fares would only
be available in certain countries. This also raises the complex issue of
taxation, and where it should be paid.
TMCs
21
data
In a recent survey of 150 travel managers operating
in Africa, conducted by Neema, it was found that
the quality of travel data reported by TMCs was of
substandard quality. Of those generating multi-national
data, 83% of managers said they were concerned about
the quality and integrity of the information, while 33%
were disappointed by the timeliness of the delivery. The
need for current, concise data has never been greater.
Africa-based industry consultant Natasha Rautenbach
believes consolidating TMCs and working with thirdparty specialists could improve the quality of data. At
a minimum you need to understand spend levels and
behaviours in all regions, she says. That can only come
from manually consolidated reports, having one TMC or
by using a data aggregator. Data can be lost with human
interaction, so unless you are able to consolidate your
TMC, data aggregators offer solutions that generate
interactive business intelligence.
aCtiOns
TMC consolidation is possible, but one needs
to conduct effective due diligence which is
hard to achieve remotely.
Ensure your selected agency has the
required processes and tools to consolidate
data, apply policy and train staff in a
consistent way
Check that they have adequate segregation
between leisure and corporate travel
Travel managers should visit suppliers in
their key markets to gain credibility and
truly understand challenges and service
being received
Investigate and challenge leakage to your
TMC. If necessary, get reports when people
have claimed airline tickets and hotels booked
directly with suppliers.
TMCs
22
getting started
Due to the complex nature of security in most African
marketplaces, it is important for travel buyers and
managers to make sure all relevant stakeholders across
the business are engaged with the development and
execution of a travel risk policy. Human resources,
legal, insurance, operations, the TMC and security
specialists must all be involved, with final accountability
residing at the C-level of an organisation.
It is concerning that only 53% of companies adjust their
security policy for the unique environment in Africa.
COmmUniCatiOn
Travel to high-risk destinations, such as the Nigerian
oil fields, may require travellers to be briefed on
specific risks such as kidnap or disease. Training and
communications are of paramount importance. This
can be achieved through e-learning modules, and also
pushing out relevant information to frequent travellers
or new-starts within the induction process, rather than
at the time a trip is booked when little attention is likely
to be paid to security briefings.
PersOnalised gUidanCe
It is also important to tailor security information to
meet the requirement of individual travellers. For
example, messaging for lone-women travellers may
be different from advice given to males. Members of
the LGBT community may need guidance if travelling
to any African country, though Uganda would be
the most extreme case. Companies who have large
numbers of frequent travellers visiting Africa may also
find value in employing a mobile vaccine company to
provide inoculations.
mOnitOring
Successful travel risk strategies ensure the booking
process is linked to security. This requires collaboration
with the TMC to make sure the policy is implemented
in the booking process in the same way that suppliers
negotiated rates and fares are managed. Companies
with more rudimentary safety programmes may simply
prohibit travel to a perceived problem country. More
sophisticated strategies allow regions within countries
to be assessed for risks, and focus on business
enablement. This may see a traveller to a problem
area requiring more pre-travel briefings, and a GPS
locator for example.
23
resPOnding
In the event of an incident, whether it be a kidnapping,
natural disaster or road accident, company employees
should be aware of how to react. From the CEO through
to all relevant departments, everyone should be briefed
on roles and responsibilities in certain scenarios. This
should be decided upon and communicated during the
initial development of a travel risk policy and on a regular
basis throughout the year. A companys response to a
specific incident such as an air crash will be different
from an on-going citywide incident such as the terrorist
attack on the Westgate shopping mall in Kenya in 2013.
Regular risk assessments and traveller tracker tests
should be part of any robust policy.
A journalist at The Economist wrote this year that there
are so many abductions in Nigeria that they rarely get into
the news. In the first six months of 2013, the West African
oil hub came well ahead of Mexico and Pakistan for the
highest number of kidnap attempts in the world. Security
experts believe that this statistic has deteriorated this
year. Many cases go unreported because of a reluctance
to involve corrupt law enforcement officials, preferring
instead to handle situations privately with the assistance
of security specialists, with ransoms being paid and staff
being released, often unharmed.
aCtiOns
All organisations should:
Ensure a process exists and is tested to track
travellers to, from and within Africa. This will
normally be achieved by linking your TMC or
GDS and your security provider.
Recognise that Africa is unique, and a general
global, or even a generic African security policy
is insufficient.
Ensure travellers are prepared by providing
relevant emergency contact numbers and
ensuring they know how to dial the numbers
from Africa. For those with company
supplied mobile devices, consider programing
international emergency numbers into phones
before issuing to travellers.
Ensure travellers are pre-briefed if visiting
recognised trouble spots.
24
teChnOlOgy
what travel BUyers say
1. What is your company device and
phone strategy?
Issue company phones - 71%
Bring your own device - 29%
53% Restricting app downloads on
company phones
73% of buyers with no visibility of roaming
data/voice spend
2. How do you select a GDS?
Selected by TMC - 83%
Selected by buyer - 17%
47% of buyers are planning to review GDS
selection in 2015, if currently selected
by TMC
Africa is the second largest and fastest growing mobile
market in the world with almost 650 million subscriptions.
African internet access via mobile is more than that of the
Middle East and marginally less than North America. This,
despite some areas suffering from unreliable electricity,
poor network coverage and costly equipment.
To understand the numbers, one must first understand
the drivers. Previously unconnected people in remote
African countries can now have access to information,
communication and banking where once they were
isolated. Seeing the immense opportunities, a large array
of the leading global cell phone and network providers
are active in Africa, with a myriad of businesses cropping
up offering phone charging services in rural regions
where electricity is scarce.
3. Online booking
52% of buyers use an online booking tool
across Africa
79% have locked down usage in South
Africa only
58% looking to expand usage of an online
booking tool in the next 12 months
4. Videoconference
47% have VC available across all major
African markets
37% have VC available in only some of their
African markets
32% planning major upgrade of VC facilities
in the next 12 months
TECHNOLOGY
25
-source: internetstats.com
60%
50%
Internet
penetration
40%
Facebook
penetration
30%
20%
10%
Sudan and
* Note:
Cote Dlvoire FB
0%
videO COnferenCing
Travel buyers first turned to video conferencing
(VC) as an alternative to travel in the early years of
the Millennium. The motivation was to reduce their
companys carbon footprint. However, following the
global financial crisis, VC was seen as a way to potentially
cut costs by replacing non-essential travel. In Africa, this
medium has struggled to gain traction. A large number
of buyers blame poor and expensive bandwidth. They
argue that better data around costs of travel would
enable IT departments to present a more compelling
case for higher-bandwidth technology.
Capturing an employees reason for travel at the time
of booking allows travel managers to better present VC
as an alternative. Some believe VC facilities are under
utilised because people do not trust the reliability of
telecoms connections. One progressive travel buyer said
the booking of VC facilities had been integrated into the
booking tool. This allows travellers to see alternatives to
travel when booking flights, maximising usage. Another
said that VC was part of an end-to-end solution, where
the booking engine and GDS were linked to the expense
system, which increased efficiency in the booking and
authorisation processes. Assuming the total trip cost
comes in at the pre-agreed level, the expense does
not need to be approved again. Most of the companys
travel was either domestic in South Africa or to Europe,
so whether this would work within Africa has yet to
be seen.
Having a robust and extensive video conference
network can add further resilience to a companies
travel programme in times of crisis, such as the 2014
ebola outbreak, or between cities with poor or unsafe
transport options.
innOvatiOn
As the saying goes, necessity is the mother of
invention. This was clearly demonstrated in East
Africa when the MPESA mobile payment platform was
created. In many areas of technology, Africa does
not need to go through the same iterative stages
that are considered normal in Western business
development. Borge Brende, the former managing
director of the World Economic Forum, recently said:
In development, we talk about leapfrogging. It is the
ability of less developed countries to overtake more
advanced peers through the development of more
modern technology, systems and thinking. Africa is
doing this.
Mobile technology is obviously important everywhere
in the world, but in Africa it is dominant. South
African innovation strategist, Toby ShapShak says:
Elsewhere in the world, they talk of a mobilefirst strategy. In Africa its mobile only. It is out
of necessity. Desktops and laptops are expensive.
Mobile channels make up more than 50% of Internet
connectivity for the African population and are driving
the economy. Kenyan software application, Ushahidi,
was originally developed to track reports of violence
during the post-election unrest in Kenya of early
2008, integrating text messages with crowdsourcing
applications. Since then the platform has been used
for many different applications including monitoring
federal elections in Mexico, tracking global Swine Flu
outbreaks and tracking medical supply stockouts in
Kenya, Uganda, Malawi and Zambia.
TECHNOLOGY
26
-source: Media24
90%
80%
70%
60%
Nigeria
50%
Kenya
40%
Ghana
30%
20%
10%
RSA
US
0%
TECHNOLOGY
27
aCtiOns
Data and roaming charges:
Travel buyers should be more aware of
company roaming (both voice and data)
usage as there is a direct impact to the travel
programme. This is a real opportunity for
travel managers to add more value to their
organistions to ensure their travellers and
companies can avoid bill shock. Even if
traditionally managed by IT, travel managers
should at least be having conversations with
IT departments to try to work together on
connectivity strategies that dont break the
bank.
Ensure appropriate Wi-Fi usage at hotels is
negotiated, including speed, download limits
and number of devices allowed to connect.
GDS:
Engage with GDS partners to find out what
additional technology can be deployed to
enhance the travel programme - even if you
dont have a direct contract, this should be a
tri-partite arrangement where your TMC is
included in the discussions
Online booking:
Consider how/if mobile strategies could be
incorporated into the travel programme.
Consider not just desk top online booking,
but mobile too.
TECHNOLOGY
28
Payment sOlUtiOns
what travel BUyers say
1. Rank the goals and drivers of your payment
strategy:
1st - Reduce fraud
2nd - Enable reporting
3rd - Manage costs
4th - Ease of use
2. Major payment type used:
Invoice - 68%
Cash - 16%
Card - 16%
3. Of the 16% of respondants paying by card,
breakdowns by country:
South Africa - 57%
Angola - 14%
Kenya - 9%
Nigeria - 7%
Ghana - 0%
4. Expense reimbursement processes employed
in Africa:
invOiCe / BillBaCk
Agreeing billbacks with suppliers, and using the TMC as
a payment conduit, is very popular in Africa. It means
travellers neither have to carry cash nor a corporate
card. It also guarantees the buyer will get a quality bill
from the hotel.
However, despite strict instructions to the contrary,
travellers may be allowed to leave the hotel, leaving
extra costs such as minibar and food to be applied to
the bill back. Buyers should agree strict criteria for what
the bill is allowed to contain such as minibar, laundry
or food, but should agree a tolerance level to ensure
that the entire bill is not held up for small amounts. It
is also worth bearing in mind that hotel reception staff,
particularly across Africa, rarely like confrontation with
travellers on check out, so even with strict controls,
additional items may sometimes appear on bills. This is
a common occurrence in Africa and can provide
immense frustration and lack of trust between TMCs
and their clients, with invoices held up for payment due
to small discrepancies.
When a TMC is paid for air tickets on an invoice, they are
effectively funding a companys travel programme and
carrying the risk of payment. This can cause distraction
in their goal from delivering service and helping to run
your travel programme.
PAYMENT SOLUTIONS
29
Payment product
Pros
Cons
Cash
PAYMENT SOLUTIONS
30
fraUd
There are many different levels of
fraud that exist in business travel.
External fraud is when a credit card
is cloned, or money is taken from
an account without the knowledge
of the cardholder. Internal fraud, or
misadministration, is also a common
challenge within travel programmes.
Africa has an unenviable international
reputation for fraud. Nigerian
scams have been widely covered in
European and North American press.
It is interesting, therefore, that the UK,
UAE, and US all have higher instances
of card fraud than South Africa (see
chart). Note: official statistics are not
available for other African markets.
Cardholders
Affected
(overall)
Cardholders
Affected
(last 5 years)
PAYMENT SOLUTIONS
31
aCtiOns
Consider the whole process: When evaluating
the payment method for travel services,
thought should be given to the ease of use,
ability to obtain enhanced data, audit trail,
the costs through the supply chain and the
risk and probability of fraud. Only then can a
company make an effective decision as to the
most appropriate payment method.
Be realistic about fraud and losses: all
payment types will be subject to fraud
Implement a risk and loss register:
which clearly identifies the cause of
the risk and loss. For internal incidents,
mitigating action such as training and more
effective background screening of staff can
be considered
Regardless of your payment type, ensure
that effective checks are undertaken to
identify fraud such as reconciliation and
spot checking / audits
Best in class processes for card: Understand
the card companies dispute process and
consider taking insurance to cover you for
any losses. Understand your card companys
fraud and reporting process.
PAYMENT SOLUTIONS
32
visas
Visas allow countries to control and restrict business and leisure
visitors. They dictate the length of a persons stay and what they can
and cant do. Africa has some of the strictest visa requirements of any
region in the world. Experts believe these barriers are responsible for
stifling economic growth and intra-Africa trade. Restrictions across the
continent do not compare favourably to the G8 nations and South
East Asia.
According to the African Development Bank (AfDB), only five African
countries (Seychelles, Mozambique, Rwanda, Comoros and Madagascar)
offer visa-free access or visas on arrival to citizens of all African
countries. The DRC, Equatorial Guinea, So Tom, and Sudan require
citizens from every African nation to apply for a visa. On average,
African citizens require visas to visit 60% of African countries, ranging
from 84% for Somalia to a low of 41% for The Gambia. Note that these
figures include tourist and business visas.
Some African governments use the visa application process as a way
of monitoring skills localisation programmes. Angola, for example, has a
stated aim of Angolonisation, which is to transfer skills to native workers.
International firms operating in the former Portuguese colony must make
sure 70% of staff are Angolan.
Companies in the oil and gas sector must submit plans detailing how they
intend to achieve that goal. Business visas for international workers must
also be approved by the Ministry of Petroleum (MINPET) so numbers
can be monitored and managed, and so that companies can be held
to their Angolanisation commitments. This process can be a drain on a
companys resources, and reduces the ability for critical staff to travel at
short notice.
Some visa experts take a more cynical view of procedures across Africa.
While acknowledging localisation initiatives are important, they believe
embassies and high commissions use visas simply to generate revenue
from the international business community. Inefficient visa processes and
last minute rejections of visas significantly add to the total cost of a trip.
However, efforts are being made in certain quarters to improve the
situation for travellers. In May, the president of the AfDB, Donald
Kaberuka, led calls for regional integration in Africa and called for Visa
free travel. The initiative, launched at the World Economic Forum (WEF)
on Africa would promote travel across the continent. Kaberuka said
that the initiative was key to enhancing regional integration and that
easing visa constraints and removing other unnecessary barriers would
contribute to boosting trade and growth.
VISAS
33
80%
70%
60%
50%
40%
30%
20%
10%
% visas
0%
Sub-Saharan Africa
SE Asia
G8 Nations
aCtiOns
Using grey channels for visa processing represents a
significant physical risk for your employees (risk of arrest on
arrival), reputational damage to your company plus potential
risk against anti bribery regulations. Companies should do
everything possible to ensure that channels are legitimate
and that the organistaion and the individual are aware of
any risks.
Second passports should be obtained for travel intensive
employees where allowed.
Where possible travel managers should pre-empt and plan,
and, where possible, obtain multi entry visas.
Some countries may allow diplomatic passports for high
ranking company officials and frequent travellers.
VISAS
34
a travellers PersPeCtive
Few travel managers, suppliers or even travel
consultants actually travel and thus dont give much
real thought to the actual travellers - those road
warriors that regularly venture into territories
unknown, exploring new opportunities, forging new
connections and experiencing and sharing in many
of a travellers highs and lows. A South African based
frequent traveller around the region shares his views:
A TRAVELLERS PERSPECTIVE
35
PART 3
aPPendiCes
APPENDICES
ACTION CHECK LIST
Based on the findings and recommendations of the paper, this checklist has been designed as a simple guide to help you answer questions, or ask questions of your
business partners to ascertain the performance of the travel programme, and create development plans.
AIRLINES
YES
NO
N/A
COMMENT
YES
NO
N/A
COMMENT
YES
NO
N/A
COMMENT
1. Has your policy been adjusted for the nuances of African travel for example:
Do you operate a time window by which the lowest fare can be found? In Europe with high
intensity routes a 1 hour or 2 hour window may be appropriate, where in Africa there may
only be one flight per day.
Do you allow baggage wrapping services to be claimed as an expense?
2. Should you consider Premium Economy as it starts becoming more available on long haul
flights to/from Africa?
3. If you have local deals, are they available for all travellers? For example, if you have a
Kenya Airways contracted fare from Nairobi to Johannesburg, can fares also be made
available for Johannesburg originating travellers?
4. Can you work with your TMCs buying power to negotiate fares on your behalf?
5. Are you making use of Corporate Mileage Programmes such as Star Alliance Company
Plus?
6. Can you be using low cost carriers more?
HOTELS
1. What percentage of your hotel requirements are booked via your preferred channels?
2. Do you know the reason for any gap eg booked locally by host office?
3. In negotiating rates, are they negotiated globally, locally or both? Can you use local
negotiation power as well as centralised coordination to maximise savings?
4. Do you/should you include safety audits in the hotel selection process?
5. Does everyone in your company have access to the same negotiated hotel rates (consider
senior execs, local requirements such as guest houses)?
6. Could you use rate caps as a way of controlling costs?
7. Do you have to conduct a full RFP every year? For critical hotels, could you consider a
more relationship, rather than process based sourcing approach? So consider face to face
negotiations rather than ERFP.
TMCs
1. Approx. what % of your corporate bookings go through your corporate TMC?
2. If you use a global agency, do they provide standard and consolidated reporting?
3. Do you review the performance of the TMC with regular meetings?
4. Do you have reportable service level agreements?
5. Do you have contracts with all your TMCs in Africa?
6. If yes, does it contain the following:
Contract length
Payment terms
Agreed services
Consequences of non performance
Termination
Data protection / privacy clauses
7. What % of time do you breach the payment terms with your TMC and what is the cause
of this?
8. Does your TMC provide confidential benchmarking, such as policy or rates against their
other clients?
37
YES
NO
N/A
COMMENT
YES
NO
N/A
COMMENT
PAYMENT
1. Do you know what forms of payment are being used from all your African offices?
2. If using card:
Do you monitor delinquency?
Do you regularly engage with your card provider to increase card acceptance?
Do you have adequate controls in place to monitor instances of fraud?
Do you monitor spend on the card to ensure that cards are used as much as possible?
Do you use data from the card to increase your negotiation potential with suppliers?
Can you enhance the expense process by linking your card to your expense system to
provide auto population of expense items?
3. If using cash:
Can you streamline the processes for issuing / receiving back cash from employees?
Can you consider an alternative such as a pre-paid forex card to reduce risk of fraud and
theft?
4. If using invoice / bill-back:
Can the set up / reconciliation process be streamlined by allowing a tolerance level so
that items with small differences can be processed rather than rejected for re-work?
Are items double handled, ie are transactions approved before travel, approved again at
invoice receipt stage?
38
TECHNOLOGY
YES
NO
N/A
COMMENT
YES
NO
N/A
COMMENT
VISAS
1. Do you use any grey channels for visa processing?
2. Do you encourage (and reimburse the costs of) second passports to frequent travellers
(where allowed)?
3. Do you encourage travellers to obtain multi entry visas, even if there is a chance they will
not need them?
39
APPENDICES
40
APPENDICES
OUr Partners
Amadeus has been in Sub-Saharan Africa since 1992
through a distribution agreement with Air Mauritius
and today is present in 100% of the territory across
48 countries.
OUR PARTNERS
41
OUR PARTNERS
42
Kitso Consulting is an
innovative and professional
Business Management
Consulting and Research
provider, with a specialist
focus in corporate travel
management. A highly
qualified and experienced
team offers succinct and practical business solutions
in performance and productivity management,
organisational design, supplier optimisation consulting
and augmentation of the full corporate managed
travel programme.
MasterCard is a technology
company in the global
payments industry.
We operate the worlds
fastest payments
processing network,
connecting consumers,
financial institutions,
merchants, governments and businesses in more than
210 countries and territories.
OUR PARTNERS
43
OUR PARTNERS
44
APPENDICES
Africa.com
www.africa.com
Online publication
www.atqnews.com/?Itemid=101
www.buyingbusinesstravel.com
www.businesstravellerafrica.co.za
Online publication
www.businesstravelnews.com
Online publication
www.travelafricanews.com
www.travelbuyer.co.za
www.tir.co.za
Online Blog
www.travelandbusinessnews.blogspot.com
Industry Publication
www.nowmedia.co.za/travel-News-Weekly
Travel Weekly
Online publication
www.travelweekly.com
Industry Association
www.abta.co.za
Industry Association
www.atta.travel
Industry Association
www.africatravelassociation.org
Industry Association
www.gbta.org
www.africatravelweek.com
www.africantravelmarkets.com/aftm
Indaba
www.indaba-southafrica.co.za
www.wtmafrica.com
Angola
www.welcometoangola.co.ao
Ghana
www.ghana.travel
Kenya
www.tourism.go.ke
Nigeria
www.tourism.gov.ng
South Africa
www.southafrica.net
indUstry assOCiatiOns:
events tO attend:
COUntry infOrmatiOn:
45
APPENDICES
with thanks
This paper reflects the views, thoughts and experiences of the corporate travel Industry at-large across Africa and
beyond. I would like to thank the following people for their time, energy and commitment during the production of
this paper:
Other inPUt
PrOdUCtiOn team
Elan Ressel - Orient8
Jocelyn Gray - Graphic Designer, Zenith Design
Martin Ferguson - Freelance journalist and
communications consultant
Finally, I would like to thank Monique Swart, Founder of
the African Business Travel Association (ABTA), for her
partnership, commitment, vision and expertise during
the production of this paper.
WITH THANKS
46
APPENDICES
glOssary
AAVOTA
IATA
ABTA
ICAO
ACSA
ACTE
IMF
IOASA
ADR
KATA
AfDB
AFRAA
LGBT
ASATA
LPC
ATA
MEA
AU
African Union
NANTA
BAR
OECD
BBBEE
BSP
POPI
COMESA
REC
DRC
RSA
ECOWAS
SADC
EMEA
SSA
Sub-Saharan Africa
FMCG
TCO
GATA
TMC
GBTA
UN
United Nations
GDS
VOA
Visa on arrival
Hub
An airport designated by an
airline as a centralised base of
operations.
WEF
WTO
YD
Yamoussoukro Decision
GLOSSARY
47