According to Duma Travel CEO Themba Mthombeni, the South African travel industry is in trouble, and unless it undergoes radical change – or transformation – it is dead in the water.
“The economy is not growing as fast as it should and we’re technically in a recession,” he says. “So volumes are dropping, margins are being challenged, costs are rising, there are calls for radical transformation, and technology is eating into the traditional bricks and mortar space. All of those things combined means it can’t be business as usual.”
So, one way that Mthombeni believes Duma can facilitate this change is by tying up with international player, UNIGLOBE, with Duma tasked with signing up new membership partners (ideally, medium-sized travel agencies) and driving growth in sub-Saharan Africa. These new customers would get access to UNIGLOBE’S a global brand, training, a global hotel programme with 38,000 properties in 6,000 cities, technology, and the benefit of massive purchasing power.
UNIGLOBE has more than 600 partners across 60 countries, but its presence in Africa is relatively small, and it believes it now has the right partner in Duma, due to its “strategic size and ability to grow”.
“There is a lot of business in the EMEA region and our idea is to capture that business and keep it within the UNIGLOBE structures,” says Hearl-Maunder. “Under our remit, there are roughly 160 companies with various branch offices, and our annual spend in the EMEA structure alone is worth $1.5b, which is a substantial amount of money we’re spending with suppliers, technology companies etc.”
“For us it’s about passing that benefit to new, prospective partners and to grow that strength and give the small and medium-sized agency the ability to operate in a bigger world. That comes with a global partner.”
Mthombeni will be hitting the road beyond South Africa’s borders, strategically targeting those countries where he believes the greatest opportunity lies.
“Africa has always been our passion,” he says. “We did a detailed study of where the companies we currently deal with and those we want to deal with have their head offices. We identified 16 countries where we see a lot of South African foreign direct investment, and that is where we are going to be searching for partners. That is where we can leverage our relationships and where there is a combination of travel and money.”
There’s talk of a focus on East Africa, where UNIGLOBE already enjoys a presence, but both parties agree that huge opportunity also exists much closer to South Africa, in the countries adjacent to its borders.
“What we are effectively doing is following the money into the rest of Africa, because where there is money, people travel,” says Mthombeni.
The UNIGLOBE relationship, however, is not the start and end point for Duma Travel.
The South African TMC have also launched three other new divisions, which it believes will help drive change in the country’s travel industry, through collaboration.
As Duma is a 100% black-owned and 50% black woman-owned business, Duma Associates is buying stakes of up to 51% in medium-sized travel agencies to provide black economic empowerment benefits.
Duma Tech has developed an online booking system that ties into back office functions to give agencies a ready-made e-commerce platform.
Duma Shared Services, in turn, will supply its associates and other agencies with centralised services, such as ticket issuing, back office functions, sales and after-hours support, in order to provide the benefit of economies of scale and reduce the time spent on administration.
“The industry is facing headwinds and needs to re-invent itself, but we believe that we can still make money,” says Mthombeni. “There are challenges, but you have to be very creative, and we believe that we can help the industry transform, not just from a BEE perspective, but also transform businesses and ensure that they survive and attract more business.”
Big goals and lofty ambitions. Wishing them well.