Source: Travel Singularity

INTRODUCTION (I HEAR THE DRUMS ECHOING TONIGHT) - Ever since its release in '82, Africa by TOTO became a quadruple platinum record, with around 300M streams on Spotify, 400M YouTube views and even a solar-batteries-powered sound installation in the Namib Desert, "to keep TOTO going for all eternity". But what makes this song so special after all these years? I doubt it's simply because of the '80s wave of nostalgia we are experiencing and, even though TOTO was (and still is) a super-band of extremely skilled musicians, there must be a deeper reason. Most genetic experts today agree that the entire humankind originated in Africa, and that all non-African people descend from what anthropologists describe as the "Out of Africa Migration", happened some 70,000 years ago. It is undeniable, therefore, that this continent does strike a chord in us. The reason, quite simply, seems to rely on our DNA.

THE AFRICAN INDUSTRY SITUATION (I KNOW THAT I MUST DO WHAT'S RIGHT)

Africa's hotel industry is booming (even though mainly in selected destinations, such as Johannesburg, Cape Town, Morocco, Egypt, Tunisia, Mauritius, Seychelles, and Zanzibar), with 149 Marriott properties, 116 AccorHotels', 42 Radisson's, 39 Hilton's, 24 Best Western's, and 100,000 Airbnb's listings. Room revenue is expected to grow by over 9% in the next two years but, on the other hand, Africa continues to be a step behind the Western World. When it comes to internet penetration, for example, only 18% of the population has access to the web, putting local entrepreneurs in jeopardy. It is estimated that barely 10% of the 200,000+ hospitality and tourism African suppliers have a digital presence, and this unbalance produces missed opportunities for independent local players, opportunities that oversea brands can (and do) easily exploit. Marriott, notably, expects to increase its African portfolio by a stunning 50% by 2023 and, helped by the organic growth attained by the Starwood acquisition, will likely be the industry's Goliath.

CHALLENGES AND OBSTACLES (THERE'S NOTHING THAT A HUNDRED MEN OR MORE COULD EVER DO)

To discuss this delicate topic, I got in touch with Thomas Mueller, Founder and CEO of Rainmaker Digital, Namibia. "Currently", Mueller says, "African providers
cannot participate in this digital paradigm shift, putting them at an enormous disadvantage". According to Mueller, however, this is not just a local obstacle, rather it is intrinsic in the industry: "with the exception of a few start-ups disrupting single aspects of the business", he continues, "we pretty much stopped in the past, and did not adapt reactively to the market's changes". This paralysis, anyhow, is more evident in Africa: "most African destinations still provide and promote their products the same way as they did twenty years ago, and this is where most providers fail". In simpler terms, when the traveler is ready to book, providers on the other side are not. "When travelers shift to instant-gratification-mode, they do not expect to write emails, send inquiry forms or call in order to book, and this creates a vicious circle of lost opportunities for local providers". In this situation, there are mainly two typical outcomes, both equally negative for local providers: travelers simply decide to go elsewhere, as it is just too complicated to book, or they decide to save the efforts and reserve via foreign distribution channels, resulting in local suppliers losing a good share of profit for no reason.

THE DMC' MONOPOLY (I BLESS THE RAINS DOWN IN AFRICA)

"Another major challenge", Mueller continues, "comes from destination management companies pushing local provider to offer lower rates and higher commissions, squeezing their already-low margins. Not to mention extra payments requested, such as brochure contributions, exhibitions, and fam-trips. Moreover, many DMCs make block bookings to keep out other market players, effectively monopolizing the inventory. Unsold rooms can be released as little as 30 days prior to arrival with no penalty. This inventory is, then, very hard for the supplier to resell, as African destinations are not last-minute ones. DMCs are running an unsustainable business model on the account of the suppliers and, in the long term, they harm the entire industry".

CONCLUSIONS (GONNA TAKE SOME TIME TO DO THE THINGS WE NEVER HAD)

Western world hotels often complain about the current distribution landscape, but the African situation is, as we can see, even more precarious. As Mueller puts it, in order to develop a sustainable African industry, it is critical to empower local providers, by guiding them into a digital transformation: "education, training, awareness and capacity building in African destinations are crucial, with training on market and technology aspects, as well as economic, social and ecological sustainability". As naive as this may sound, we all want to believe it is possible even though, to paraphrase David Paich and Jeff Porcaro, "gonna take some time to do the things we never had".

1.  https://content.knightfrank.com/research/1493/documents/en/hotels-africa-2018-5422.pdf