It’s beyond stating the obvious to say that 2016 is set to be an interesting year.
Times are as tough as they’ve been for some while, and whilst business travel remains the most robust and consistent travel out there, there remain some key factors that will influence the African business travel industry in 2016.
Top of that list must be the falling global oil price. As I write this, it has just dipped below $28 a barrel for the first time since 2003 – not good news for those African countries with a heavy dependency on this commodity for their revenues. The likes of Nigeria, Angola, DRC, Equatorial Guinea, Gabon, Sudan, Algeria, Libya and Egypt spring to mind.
The news in January that Iran could begin pumping oil onto the world market after the lifting of economic sanctions was behind that particular fall in price, and there’s already a global oil glut, with Iranian supplies only likely to push the price down further.
So, what does that mean for African business travel?
Could we see travel to the oil-dependent countries scaled back, as they become less attractive investment prospects, and will we see a shift towards those African countries with a greater emphasis on oil imports?
Here, the likes of Kenya, the Ivory Coast, Seychelles and Ethiopia are most prominent, whilst Bloomberg reported in late 2014 that stocks surged 22% in Tanzania, 18% in Uganda and 9.4% in Kenya in the wake of the first major fall in the oil price that year, while the benchmark Nigerian stock index fell by 24%.
All of this must keep the international hotel group’s development officers on their toes, as they keep an eye on where next to build a hotel or partner with a local entity, whilst those airlines without a hedging policy – Emirates, Etihad, American Airlines, for example – will no doubt be smiling, as they enjoy the bottom line benefits of a falling oil price.
Aviation experts will tell you that it’s not as simple as that – with capacity control another talking point – but it will be interesting to see if those savings are ultimately passed on to the customer and long-haul and intra-African business travel becomes a lot cheaper, thanks to oil now costing a heck of a lot less than it did 18 months ago.
The next 12 months will reveal a lot.