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HARSH criticism has been levelled in travel and tourism circles for SA’s poor online offering. Organising a holiday online, even within SA’s borders, can be a hazardous experience.
However, that now looks set to change, with an increasing number of sophisticated, fast and easy-to-use e-travel portals soon coming on-stream.
The latest offering, Justin Time Online, is offering a “one-stop” portal where you can buy your accommodation at a minimum 20% discount, as well as flights and car rental at discounted rates. This aggressive pricing alone is likely to spark fierce competition in the domestic travel industry.
According to MD Fraser Gregg, the concept has been so well received by the travel industry that Justin Time Online — which is due to go live in SA on May 11 at www.justin-time.co.za — has big expansion plans.
After SA, the group plans to launch regionally, in Botswana, Namibia and Mozambique, and then IT director Allen Peterson is taking the concept to Australia. After that the group will look at Canada and the US. And Justin Time Online has already had franchise queries from Italy, Greece and Spain.
“All the research shows that there are a huge number of people who would take either a planned or impulsive breaks, but don’t because it seems so expensive. There are also lots of people who stay with friends and relatives because they think the alternatives are too costly.
“Now they have Justin … an industry insider who can get you the sort of discounts usually only available to people in the travel business or those in the know.”
Gregg says that while a centralised portal makes most sense for travellers, the travel industry itself has had a blinkered approach in the past, with several airline sites for flights, car rentals, and clumsy and time-consuming central reservations sites for accommodation.
On top of that, payment was often an awkward process, with travellers having to fax deposit slips, or suppliers having to accept a delay on payment. None of the essentials for domestic and inbound travel were integrated into one centralised, fast and easy-to-use portal with the customer or the supplier in mind, says Gregg.
According to the founders at Team Storage Solutions, a 100% black economic empowerment and women-owned company, another problem with online tourism sites was that “you can look but you can’t book”. Hence their new design for Gauteng Tourism — www.gauteng.net — which, by having a customised reservations engine from travel group Thompsons, allows you to browse information about the province as well as book transport and accommodation.
The effect of the opening of new portals is likely to be manifold.
Travel agents will increasingly be bypassed as e-travel products outstrip the intermediary benefit they can offer. As a result, the traditional travel agent will have to enter the fray — both in terms of dropping commissions in order to stay competitive in the cost- aggressive internet market, and by changing their offerings to adapt to a growing market of internet-savvy consumers.
Stephan Ekbergh of Travelstart says SA’s travel industry is making money, and is thus not that interested in change. But the internet makes the industry more transparent, so each new site or portal does its bit to transform it, he says. The www.travelstart.co.za portal allows the traveller to find and buy the most competitive international and domestic flights.
Gregg says Justin Time Online’s business model is likely to make things increasingly difficult for the traditional travel agent, who can charge commissions of up to 30%.
Justin’s booking platform gives domestic and international travellers access to a growing database of quality accommodation, flights and car hire, and the ability to book and pay for the whole trip from one point — either online or over the phone.
The suppliers — hotels, guesthouses, country houses, B&Bs, self-catering accommodation and game lodges — upload unsold rooms at a minimum 20% discount, from 30 days to a day before they become available. This last-minute room stock, which the group refers to as “distressed inventory”, is often the hardest to sell via traditional means. So any sale for the supplier is a bonus. At any stage in the process the discount can be increased.
Meanwhile, Justin Time Online only charges suppliers a 7% commission for every room sold and there is no annual fee, in an attempt to pass value on to consumers. The customer is not charged a fee for online bookings.
Andre Viljoen, CE of Cullinan Holdings, which owns the Thompsons group of travel products, says that while travel agents will need to adapt and have their own e-travel offering, it is “different horses for courses”, and they will continue to have a role to play.
For simple point-to-point domestic travel, internet booking is fine. But you can’t get certain things off the web, and agents will continue to have a role to play, especially with complicated itinerary travel, he said.
Meanwhile, consumers could look forward to accommodation prices easing somewhat as the domestic travel market begins to open up. In turn, this could have a positive effect on growth in the domestic tourism market.
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