Exploring potentials of travel market through consolidation
With the advent of airlines’ zero commission policy in aviation industry, where travel agents no longer enjoy commissions from the airlines, they have focused on other business models to accommodate alternative means of generating revenue that would grow their products and services.
Indeed, many of these agents are consolidating to drive their businesses so as not to depend wholly on airline commission, and at the same time, to compete with international travel markets in other countries like South Africa and United States of America.
However, this has informed the consolidation of several agencies in the country, who gradually streamline their business by shifting from ‘commission-revenue’ model to ‘service–fee model’, for the need to sell the value of their services and expertise to sustain long term relationship with their customers.
Among those that have consolidated are the Quantum Travels Ltd, Dees Travels and Tours Ltd, Finchglow Travel Ltd and Touchdown Travel Ltd, which have produced Nigeria’s first travel consortium called Travel Investments Company (TICO).
According to the chief executive officer, TICO, Mrs. Irene Uti- Egbeogu: “This consolidation was set up to offer much more than commission earning to its members which would increase overall profitability which will in turn create opportunities to reinvest in their business in areas covering technology, education and training”.
Speaking in a press conference, recently in Lagos, She noted that the Nigerian travel industry has been a source of opportunities beyond what words or figures on projection spreadsheets can describe.
Uti-Egbeogu, who stressed that caution must be taken to avoid the temptation to exploit consumers, added that fair pricing, better and easier process flows should be name of the game.
She stated thus: “We, at TICO, continually strive to apply innovation, differentiated service designed to ensure that we always deliver on our brand promise.”
“Our value proposition to the airlines is to enhance their distribution channels and ultimate reduce their cost of sale offering competitive pricing on their behalf in this changing business environment”.