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Tech Update African Hospitality Pushes Ahead

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October 15, 2015
Tech Updates from Around the World
Mmatšatši Ramawela

Empowering the Industry about Online Distribution, Embracing Digital

There is an increase of media consumption through mobile phones and community news websites such as the case of HiviSasa (a local newspaper in the Kenyan city of Nakuru). Thanks to mobile money transfer and micro-financing service M-pesa (M for mobile and pesa is Swahili for money), widely used in countries such as Tanzania, Kenya, and to some extent South Africa, even the way we are accessing finance and paying for goods and services is changing.

Those in African tourism and hospitality recognize that technological innovation and broad access to online platforms is the future. In Africa technology is fast changing how hotel and travel bookings are made. African travelers have access to extensive travel purchasing intelligence, putting pressure on hoteliers to make accurate forecasts relative to booking demand, room pricing and promotions. 

Moving Mobile
Online distribution expert and area manager for Expedia, Inc. Ross Kata said, “...We’re seeing mobile phones absolutely replacing the desktop. Nowadays people prefer to book their flights and taxis using their phones, a global trend which has not skipped our (the African) continent.”

In a world of TripAdvisor, Airbnb and Hostel World, all popular mobile-based applications, hotel operators are able to gain a better understanding of their markets. But are businesses ready to seize these opportunities or do they see the emergence of these applications as a threat?

Kata said, “...It enhances what is already out there. What makes this great is that we’re also seeing our continent (finally) adopting some of these new applications.”

It’s a view shared by others. David Martial, managing partner of Hospitality Plus said, “Travelers today use mobile devices to search for hotels and destinations. The hotel app is not only a way to better serve the customer in house, but it also proves a significantly positive tool to better market the product overall. Apps can certainly increase brand recognition and retain the guests for future bookings.”

Additionally, Martial said, “The brand and independent hotel apps can display all services and facilities at the hotel in different languages, send notifications to guests in house for last-minute restaurant, spa or activities specials, take direct spa, room service or food and beverage orders, and improve the guest’s hotel experience. This in turn maximizes revenue and ups the average spend per guest as well.”

Enhancing Marketing Capability
It is far more expensive to attract a new guest than to keep an existing one. It is also said that nearly 70 percent of guests move from one brand to another brand because of lack of communication strategies. Thus, the impact of technological innovation is not only consumer based but also has a massive impact on operations – particularly a hoteliers’ approach to marketing and promotions.

In an article published in the Fall 2015 Boston Hospitality Review, the academic journal of the Boston University School of Hospitality Administration, Professor Leora Lanz and Megan Carmichael detail some of the digital techniques focused specifically for marketing. These include the continuous need to enhance website updates and content, particularly for revenue as well as search engine optimization; search engine marketing, meta-search marketing and dynamic rate marketing – all tools for which those on this continent are just starting to understand; email marketing and the ability to highly target customers with effective email outreach; social media, whether it be through paid marketing or organic optimization; and even the willingness to grasp new technologies such as augmented reality simply to cut through the clutter and remain distinct through the endless arena of Internet information.

Social Media and the Use of Imagery and Visuals
According to a study commissioned by Google in 2014 and conducted by Ipsos MediaCT, an independent marketing research company, “The Internet is clearly the primary source of travel inspiration: 65 percent of leisure travelers are inspired by online sources, most notably through social/video websites and search, while 42 percent of travelers are inspired to travel by YouTube content.”

Martial said, “It’s important to also note that mobile is now critical at all stages and influences booking decisions. Smartphones are used throughout the travel process, mainly for travel inspiration even if the booking process itself is done on another device.”

Technology for property management systems, guest communication, marketing and revenue management are all in place and now on our African horizon.

Strength in Partnership; Strength Through Knowledge
In 2007 the Tourism Business Council of South Africa first convened what is now known as the annual Hospitality Investment Conference Africa (HICA). Nine years later, the rise of technology is the main focus, as the group seeks to encourage the industry to embrace these new trends and strengthen expertise in this area. Discussions at this year’s conference cover topics such as the future of online distribution, power of intelligence for hotel businesses, cyber security, maximizing revenue and managing business channels and more.

While it may seem elementary to a global audience, for those advocating for the industry in Africa, these issues are top of mind. We acknowledge how little we know about online distribution here, but we recognize that we need to grasp this.

Looking Ahead
We haven’t begun to scratch the surface of what technology can do. Whilst there has been a great deal of progress made, the continent still has the lowest Internet penetration in the world. The latest report by Africa Economic Outlook (AEO) shows that in sub-Saharan Africa, the Internet penetration rate is below 7 percent and for broadband it is under 1 percent. However, the continent is catching up and quickly. Now is the time to lay the foundation for what is likely to become the future for our African hospitality industry.

Mmatšatši Ramawela is chairman of the Hospitality Investment Conference Africa (HICA) and CEO of the Tourism Business Council of South Africa (TBCSA), whose mandate it is to provide a voice to organized business in the travel and tourism industry in South Africa. HICA is a leading hospitality investment conference in sub-Saharan Africa.
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