Published on Tuesday, June 7, 2011
In the first of series of guest comments, Mark Bradbury, joint CEO of Cardiff-based travel technology provider RWA Ltd, takes a closer look at the online travel market in South Africa and identifies some of the opportunties for international businesses.
"The online booking of travel in South Africa is still in its infancy. As in other countries, online travel booking has been pioneered and driven by airlines and, in particular, by low cost carriers such as 1time, Kulula and Mango.
The success of Kulula, currently South Africa’s biggest online retailer, generating over R2.5 billion annually in online sales is a testimony to the potential of this market which has a population of over 50 million.
Internet penetration in South Africa is still very low. A recent survey by Cisco shows that the number of South African internet users has passed the five-million mark for the first time, finally breaking through the 10% mark in internet penetration for the country.
However, less than 500,000 of these have internet access at home. Most people and many high income earners have access only through their work.
Looking at traffic to the web sites we host for South African travel companies, we can clearly see a daily traffic profile that differs significantly from those we host for UK travel companies. In South Africa, the web site traffic has reduced to 50% of the peak traffic by around 17:00 UK (18:00 SA) whereas in the UK it is not unusual for the peak traffic to a travel website to occur around 20:00 to 22:00.
Looking forwards, predictions are that by 2014 there will be 9 million internet users representing almost a doubling in the number of users over a 5 year period, though still only giving an internet penetration of less than 20% of the population.
While the difference in these usage profiles may not have a material effect on the volume of bookings taken, it is an indicator of how the South African nation is currently adopting technology i.e. internet adoption is currently being driven by companies (large and an emerging SME) rather than by the rollout of broadband or other to households."
Mark Bradbury is Joint CEO of RWA Ltd, a travel technology provider that has been working closely with a number of South African travel companies for the last five years to help them deliver on their strategies and plans.
RWA worked closely with both Kulula and 1time on the launch of their 'Holidays' businesses – both of whom continue to use RWA’s Sell-It Suite tour operator.
In next week's article, Bradbury will look at the current status of online booking of flight only and holiday packages, both domestic and overseas."
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The recent insolvency of Low Cost Travel Group, one of the large players in the travel industry had a big impact on the travelers, hotels and all related players from both wholesale & retail arms. There were about 27,000 people on a holiday who had booked through the company comprised of a €200 million wholesale arm and €500 million OTA / retail arm.