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TMC shares Africa biz travel predictions for 2019
30 Sep 2018 - by
Getting around Africa by air remains a big challenge, despite strong economic growth in major sub-Saharan economies. While more people want to fly, flights operated by African airlines are only 70% full on average, 11% below the global average load factor.
This is one of the insights included In BCD Travel’s 2019 Industry Forecast, which said the reason behind the emptier flights was mostly due to high costs associated with flying African routes, caused by the costs associated with heavy regulation and steep airport taxes.
“Excessive regulation will prevent the boom in new routes and additional frequencies needed to accommodate extra demand,” states the report. “There are pockets of expansion, most notably in Nigeria, but extra flights are needed across the continent. The combination of rising demand and constrained capacity means regional fares will increase, at least for business-class travel.”
The report goes on to state that buyers will find it hard to secure network-wide deals with carriers. BCD Travel’s recommendations for air include focusing negotiating efforts on heavily competed routes where your buying power can make a difference. Also, it says buyers should be prepared to work with African LCCs.
West Africa is seeing rapid growth in hotel inventory, particularly Abuja, Lagos and Accra. “Addis Ababa has been the continent’s strongest performer, with guest numbers and prices up sharply this year due to strong demand from multinational businesses, fostered by the expansion of Ethiopian Airlines in the city,” states the report, adding that this extra supply could push hotel rates down by as much as 3%.
Most countries will see only modest year-over-year rate movements in 2019 of between 1% and 3%.
BCD Travel’s recommendations for working with hotel groups includes negotiating discounts on ancillary charges (like meals and laundry), which can add an average 45% on top of the room rate in Africa, compared with 30% globally. “While it’s good to look for savings opportunities, remember that safety remains the priority when selecting a hotel> In some cases that may mean travellers staying in alternative accommodation, like serviced apartments.”