On balance Atta is a very broad church and encompasses all sectors of the industry. We never get involved in disputes between members or governments but quite simply distribute the arguments from all sides and let the members make their own judgement. The only time we do interfere is if a member is breaking the law. So for example selling packages in UK without the correct ATOL licence. But most African based DMC and travel specialists are not subject to the European directives so perhaps the playing field is not level in the first place!
Tourism used to be relatively so straight forward. A simple but extended supply chain to get the client from his home to his chosen safari destination. But to the dismay of some of our members the links which form that chain, customer > travel agent > wholesaler > DMC > accommodation supplier are breaking, indeed some cut out completely. It is often difficult to give a fair unbiased response when we receive complaints about unfair competition which short circuits the traditional chain as in essence the market itself is the influence and it is not our role to dictate to one or other party in the dispute.
What is behind these complaints? Well I suppose the main cause of cracks in the chain was of course due to the massive advance in technology over recent years. Everything changed the moment that the internet went global in tourism as clients immediately obtained direct access to suppliers through the internet and as a result many traditional avenues could be cut out.
In fairness most forward thinking companies have cleverly adapted to embrace new technology and many suppliers provide links to their traditional agents and also ensure that they retain a maximum STO rate structure, to avoid under cutting to a level beyond which they will not go. But the fact is, that no longer does client consult their travel agent, who consults their wholesaler, who in turn uses a DMC/ground operator. Now it is mostly client asking a specialist Africa agent, who in turn has 2 choices (a) use a traditional DMC, or (b) has relationships with all suppliers directly. They in turn may or may not respect the traditional differentials in margins that were or are in place to protect the chain.
Another contributor to the cracks in the chain is Vertical Integration. Some 30 years ago I was asked by a well-known global tour operator to start a hotel company for them in Africa as they wanted to own or manage the properties that they use for their clients. The start of my affair with Africa. This practice is now common place across our African tourism industry. In simplistic terms Vertical integration occurs when one company expands its business into a variety of different areas by buying another similar organisation but on a different level of the chain. The advantage is of course that one company can control all aspects of their business. But again this practice does damage the old supply chain and it certainly causes confusion to trade associations whose members were traditionally either buyer or supplier, some of ours are now both!
Another ever growing concern for some operators concerns the influence is the world’s largest travel site, the one with the owl logo (I bet you don’t know how why one eye is red and the other green? In fact, the two colours symbolise the way travellers choose where to go “green” and where not to go “red” on their next trip). Anyway with more than 60 million members and over 170 million reviews and opinions of hotels, restaurants, attractions and other travel-related businesses, they have a massive influence on supplier selection. But where does this leave the tour operator. Many feel abandoned by the site, as it does not have a tours category, and tour operators are merely left with a multitude of consumer reviews in chat forums and social media feeds. On a recent visit to Tanzania the CEO of our fellow association in United Sates USTOA told me that he is opening lines of communication with TripAdvisor to discuss options for integrating a tour operator platform into the TripAdvisor site. This is encouraging news.
Ultimately though as an industry we have to accept that the market dictates the direction we are going in. We just have try and keep the playing field as level as we can and adapt to this brave new world which may indeed mean that the chain will shorten.
Source: Nigel Vere Nicoll