by Herman Manson (@marklives) Stephan Ekbergh is the Swede who is turning Africa’s travel-booking market upside down. His company, Travelstart, employs 180 people who manage up to 2000 travel transactions a day.
Travelstart offers bookings for flights, hotel rooms, vacation packages and car rental. It is using innovative payment options, mobile and social media to address issues facing the travel industry, such as fraud, and to improve customer experience.
in 1995, Ekbergh launched one of the early online travel agencies in Sweden, called Mr Jet. In 1999, he launched Travelstart. in 2004, he moved to South Africa and, in 2006, opened a local travel-booking website. It took off and, by 2010, Ekbergh had sold off his Scandinavian online travel interests to focus fully upon emerging markets. In 2010, Travelstart moved its headquarters to Cape Town.
Today, Travelstart operates in various African and middle-Eastern markets, including Nigeria, Kenya, Egypt and Turkey.
According to Ekbergh, consumers used to be at the mercy of how good/well-informed their travel agency was. Today, they have access to most relevant information online and can make much more-informed decisions by themselves.
Passing savings on to consumers
Travelstart tries to keep fares low by passing on savings to consumers; for instance, it doesn’t need expensive outlets in retail environments or spend money on TV commercials.
Travelstart also offers various solutions to suppliers (such as hotels and car rental companies) by offering them a platform on which to distribute the right information to the right consumers, as well as collecting money for bookings. This is especially important in emerging economies, where cash is often king or where people prefer to do EFTs, rather than risk online credit-card transactions.
Business outside of South Africa makes up around 35% of Travelstart’s revenues but Ekbergh expects this to grow to more than 50% of its total business by early next year.
Ekbergh says 2015 is seeing rapid growth in mobile transactions — Travelstart experienced 100% growth in mobile transaction in SA in the first two months of the year.
Mobiles screens are getting bigger, which is helping drive growth, as are seamless mobile payment solutions. The rise of apps should play an important role, removing friction in the booking process. Mobile transactions tend to be more last-minute than transactions via desktops, says Ekbergh.
Social media’s increasing role
Social media is also playing an increasing role in both the travel industry and in consumers’ travel decisions. Travelstart acquired the Hong Kong-based social intelligence company, Satisfly, in early 2015. Social logins for booking sites, says Ekbergh, allows them to push more relevant offers to consumers while diminishing fraud (since social media users hold some social accountability).
Ekbergh expects travel offers to become more intuitive — if it is known you fly to Jozi every week, you shouldn’t be asked where you are going every time you make a booking. There will be less friction in the booking process and the focus will shift to pushing relevant recommendations and deals to the right people.
Ekbergh says international travel choices by South Africans are heavily influenced by visa requirements and currency levels. South Africans prefer to holiday where they don’t need to go through an extensive exercise to obtain a visa. Dubai is an especially strong travel destination, possibly because of the number of South Africans employed in the Middle-East.
Turmoil in some Middle Eastern markets is buoying outbound travel — people escaping the brutal realities at home for a weekend in Turkey or Dubai.
Based upon visuals
Destinations are increasingly being picked based upon visuals, driven by sites such as Instagram and Pinterest. People are increasingly making travel destination choices based upon the number of Likes, Hearts or recommendations they generate on social platforms.
YouTube, interestingly, has been underwhelming, according to Ekbergh. He suggests that youngsters are using it less regularly, preferring to spend their time on chat platforms such as Whatsapp.
Ekbergh is of the opinion that people are very aware of the invasion of their privacy by brands [and governments — ed] and that companies such as his own need to tread carefully, ensuring they offer real value in return for greater access to personal preferences.
The future of online travel lies in relevance (personalisation) and offering value. Innovation is increasing faster and faster, and Ekbergh believes the tradition travel-agency model will be disrupted as businesses like his own set out to improve online and mobile user experiences.
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