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Article by Josephine Wawira

Steady growth of internet penetration in Africa, a boost for e-tourism

Jumia Travel 9 June 2017
Currently, there are approximately 345 million internet users in Africa, representing 9.3% of the total population and a penetration rate of 27.7%. These analytics presented in a hospitality report by Africa's leading online travel agency, Jumia Travel, reflects the opportunity that lies for tourism and hospitality industry players in exploiting the internet to grow e-tourism.The growth of 4G network has also extended to more than half of the African countries, with 72 live LTE (Long-Term Evolution) networks in 32 countries as at mid-2016. Although its adoption still lags behind the rest of the world with only 20% 4G population coverage, taking advantage of 4G solutions currently in the market will provide more efficiency and convenience to any e-tourism business.For instance, the report identifies Wi-Fi as a top priority preference for hotel guests in Africa with 23% demand. For this group of travelers, most likely those who take up 31.4% of business spending are looking for a fast and reliable network connection and a huge amount of bandwidth to ensure their dealings continue uninterrupted. Investing in the 4G therefore can help hotels provide more personalized guest experience as well as improve operational efficiency.Mobile services and technologies, generated 6.7% of GDP in Africa (around USD 150 billion of economic value). This is expected to increase to more than USD 210 billion (7.6% of GDP) by 2020, while the number of unique subscribers is estimated to reach 725 million.In this case, the more internet connected Africa becomes, the more likely the pressure will be for service providers in the tourism and hospitality industry to adopt the internet and rip from its massive advantages. Capitalizing on technological advancements presented by the invention of the internet as well as its massive penetration in the continent, is sure to give players like hoteliers a competitive edge. Possible direct ROI is prospective from increased bookings from new and return customers.A notable fact from the hospitality report is that low levels of digital skills remain a major barrier to mobile internet adoption especially in Sub-Saharan Africa. Supporting digital literacy by tourism stakeholders in the continent is therefore an essential element in promoting e-tourism in Africa. In its aim to connect the whole world to the internet, Facebook launched its Free Basics initiative in 2016; connecting almost half the African countries to its free internet service. Furthermore, African Union recently launched the Africa domain name for the continent, a move that gives Africa its digital identity and aims to decrease the cost of acquiring a URL which then allows people and businesses to better reach the world.
Article by Josephine Wawira

Trends shaping hospitality in the second quarter of 2017

Jumia Travel 1 May 2017
PersonalizationIn a previous article, we discussed how providing personalized experience to guests is key to having a competitive advantage in the hotel industry. This aspect is burgeoning steadily, as proprietors embrace the manifestation and upshots of giving personalized services and products. "From elevating the in-room atmosphere by for instance installing inhouse plugin for personal guest devices, to ingeniously attaching reward to risk free rates; personalization is a trend that will not be fading off soon," says Cyrus Onyiego, the Country Manager of Jumia Travel Kenya. The incessantly demanding Millennials as well as a rising class of Generation Z that seeks more experiential travel, play an assertive role in making hoteliers proactive in offering tailor-made services for their customers.Chatbots and RobotsToday, hotels are highly driven by the need to avail services to guests in the most accessible way. This has led to more technological automation, enabling almost everything to become digitalized. While digital check-ins' existence already feels antique, almost everything else such as ordering room service, is now making hotel stays a delight using chatbots and robots. Making hotel reservation is no longer a fuss, and neither is the entire boarding experience with the use of chatbots. The ability to increase hotel-guest engagement at all stages of their stay through technology helps in collecting valuable guest information which then facilitates in providing personalized experience as discussed above. This also guarantees that your customers will receive other information such as applicable offers/deals, thus improving loyalty and increasing the number of returning guests. Therefore, hotels that have embraced chatbots and robotic technologies are expected to experience a surge in revenue conversion rate this second quarter of the year, 2017.Simple is smartIt always seems that when one inclination becomes a sort of a liability, then the old is regenerated. For instance, in the past and as recent as a decade ago, hotel stays were often labeled a 'luxurious experience' only applicable to individuals of certain high class. However, a half turn is easily seen in current day hospitality sector, with travelers of all backgrounds increasingly warming up to the aspect of vacationing and staying at hotels. It is no longer a luxury but rather a necessity for a majority to break from their day-to-day chores to invigorate themselves in completely different environs, and hotels make a perfect hideaway.To accommodate each of these guests, most hotels have transformed from the previously intricate nature especially regarding revenue management, with for instance incorporating special resident rates. Other facets include offering discounts and packages, special club membership rates, specialized amenities such as to accommodate people with special abilities; as well as different payment options. In any success trajectory in a hotel business and in the entire hospitality industry, simplicity is key and is especially smart.The future of hospitality is indisputably more optimistic, and a simple choice such as modernizing operations through the adoption of shifting trends, can determine if a player will benefit from the benefits or not.
Article by Josephine Wawira

Revenue Management: an effective tool in attaining top line revenue outcome

Jumia Travel 23 March 2017
Are you selling the right product/service, to the right people, through the right channel, and at the right price? Basically, how viable does your Revenue Management place your business in the competitive industry? In the hospitality, travel, and tourism sectors, for instance, commoditization and intense competition rule the day. While players use strategies such as marketing (both online and offline) and innovative technologies to stay aloft the industry, revenue management remain largely underutilized; yet it is one of the most effective tools in attaining top line outcome.Revenue management is therefore a vital part of any business in ensuring that target customers are offered the best price guarantee. In this case, leveraging price is everything; but also, bear in mind value-based pricing that will warranty your business profitability while at the same time offering the lowest price in the market. The primary factor is to be confident that cutting the price will at the least guard your profit margins if not at the best increase it.Discounts/Special Deals as optionsBeyond profitability and beating competition, the revenue management effect spreads to other aspects of a business strategy such as improved customer satisfaction. In most cases, this is achieved through provision of discounted prices and special deals especially during holiday seasons such as Easter. Since these are short term strategies mostly covering a set sporadic campaign, it is important to communicate effectively to customers; to avoid discrepancies when resuming normal prices.For instance, if an online hotel booking agency offers special deals, then communication must be done to partner hotels as well as customers so as to get maximum ROI (Return on Investment). Miscommunication or lack of it thereof could be disparaging to the agent's long term efforts to reach more customers with the discounts or even worse, lack of cooperation from hotels. The revenue management team is then tasked with guaranteeing price parity, meaning the prices they receive from hotels are similar or lower than those provided by the hotel itself and other booking sites.Lynn Zwibak, Head of Revenue Management for Jumia Travel Kenya, notes that "hotel rooms are perishable inventory. If a room goes empty for a night, you can never sell it again. However, the incremental cost of selling that room is small. Revenue management allows a hotel to fill these otherwise empty rooms by targeting different customers with different rates. When done correctly, a hotel can maximize ADR (Average Daily Rate) from its top guests, and maximize occupancy with discounted rates from untapped market segments."Finally, pay extra attention to a well-designed pricing package and value-added supplementary services which will get the customers willing to pay. These could include all-inclusive packages, loyalty programs, and room upgrades in the case of hotels. Do not ignore the fact that different customers have varying needs and thus different expenditure budgets. If well strategized and implemented, revenue management is capable of driving revenue growth and the company's overall performance.
Article by Josephine Wawira

2017 hotel trends to look out for

Jumia Travel 23 November 2016
The hotel industry is continuously evolving and as curtains quickly fall on 2016, more evolution is expected in the coming year. Here are top hotel trends that are likely to dominate the sector in 2017.More Dynamic RatesHotels are gaining more online presence through various channels such as online accommodation booking platforms as well as OTAs, and are learning to quickly adopt their rates to meet demands. While currently most hotels seldom change their rates, 2017 will see them adjusting rates more often based on occupancy and competition. Furthermore, hotels are becoming ingenious by attaching reward to risk free rates, by discounting their prices and offering them as nonrefundable. This goes without saying that hotels especially in East Africa are also starting to warm up to the idea of offering special resident rates, convinced by the conversion and the power it has in generating returning loyal customers and gaining competitive advantage.Tech 2017Technology has dominated the hotel industry throughout this year, and the trend is expected to increase in the coming year especially in the use of mobile apps. While strategies like the provision of complementary Wi-Fi is an evident stride towards catering to an increasingly tech-savvy customer base, come 2017, hotels must find more effective channels to meet their customers' expectations, such as the use of mobile applications that give more independence and flexibility to both hotel managements and guests.Yared Kifle, Head of Revenue Management for Jumia Travel East Africa, says that "this will require constant study and analysis of the market, for hotels to adapt accordingly in an ever-changing marketplace. For instance, Jumia Travel provides all its hotel partners with modern day tools such as the extra net app which gives them real time access to any price change and inventory at any given time. The changes are updated and displayed constantly and consistently under full discretion of the hotelier."Hotel Chain Development2017 will see the opening of various hotel chain establishments in Africa that are currently under construction. According to the African Tourism Monitor, Unlocking Africa's Tourism Potential Volume 3, among these chains are the Movenpick's four hotel deals in Egypt, Morocco, and Tunisia that are under construction and scheduled to open by end of 2016 and 2017. Besides, the report further states that Pullman's signed deals in Nairobi, Kinshasa, and Addis Ababa, are also all on site, and are scheduled to open fully by 2017. In total, approximately 10,988 new rooms will be opened in about 55 hotels in Africa, the report states.Reliance on OTAsWhile people have become more interested in travel, they have also become even more occupied at various levels of their lives, leaving no room for them to personally tailor own travel plans. This has and will continue in the coming year, thus increase reliance on Online Travel Agents especially among millennial business travelers. There is no doubt that challenges abound in OTAs, but the travel industry research authority Phocuswright estimates that the total cost of bookings through the Online Travel Agents (approximately $341 billion) is likely to hit 6% increase in 2017, from an annual growth rate of 5% between 2011 to 2015.

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