Objective
The purpose of this report is to deliver a plan that provides AfriCamps with a better understanding of the travel agents market. Through this plan, it will be clear how AfriCamps can market itself better towards travel agents.
The following research structure has been chosen. The first chapter will focus on the existing internal situation in order to get a good impression of the organization and to see if there are possible improvement points that can be beneficial for the sales towards the travel agents.
In Chapter 2, AfriCamps’s external environment is analyzed. This is necessary to get a good picture of this environment. Competition will be looked into as well as the influences of a number of important factors in the market that affect AfriCamps’ sales process. Trends and developments are also described in this section.
Chapter 3 will specifically focusing on the travel agents. Through interviews and surveys, a good picture has been obtained in the booking process of travel agents. In addition, there is been focused on the needs of travel agents when it comes to booking and finding accommodation.
At the end of the report are the overall conclusions and recommendations for AfriCamps.
Index
1. Title sheet 2
2. Preface 3
Objective 5
3. Research question & intended results 9
4. Methodology 10
5. Research level 1: micro 11
Who is africamps? 11
Business structure 11
Strategy 11
Customer analyse 12
Via wich chanels clients are coming to Africamps? 13
Comission 13
6. Conclusion: internal analyze 14
7. External analyse 15
Competition 15
Competitors 15
Power of booking websites 17
The accommodation booking engines are generally referred as “Online Travel Agents” (OTAs). The system varies but it is always the case that the site raises a commission for each booking. That can be a small percentage, but can also increase to more than 25 percent on some sites. A booking site can be a useful business partner to generate clientele, but this cost tag must always be taken into consideration and should always be balanced whether the cost is worth the service. A problem with this is that over the past few years, the OTAs have become so inevitable that they will increasingly offer their services to accommodations under strict conditions. The most well-known of these terms are the “rate parity” (lowest price guarantee for the OTA) and the availability parity (as many rooms offer through the relevant OTA). However, that does not mean that OTAs are also active in other areas. In Europe, we will see experiments showing the OTA not only the booking, but also the payment int (and then without the commission). OTAs provide assistance to manage accommodation websites, so that they get full access to all the booking traffic of the accommodation. 17
Influence of reviews 17
What are the important review websites? 17
Actual development South African tourism industry: 18
Trends and developments travel industry 18
8. Travelagents 18
Conclusion Survey travel agents 19
Conclusion Interview travelagents 19
Where meeting new travel agents? 20
Booking process of a travel agent 20
9. Conclusion 21
10. Aanbevelingen 21
11. Appendix 22
Departments: 22
22
Functions 22
Appendix: target groups Africamps 23
Appendix: Porter Five Forces 24
Appendix: Strategy 26
Appendix: 6w’s Ferrel 27
Appendix: overview review websites 28
Appendix: Interview 1 29
Company: Zuid-Afrika specialist 29
Appendix: interview 2 31
Appendix: survey travel agents 33
Appendix: survey charts 35
Appendix: booking process travel agent 36
3. Research question & intended results
AfriCamps is still a young company which is very busy expanding their campsites. Meanwhile, there are already other companies which deal with the same kind of concepts so it is essential that they continue their development. They want to increase their market share by opening three new campsites this year. In addition, not all campsites are weekly fully booked, so they want more bookings.
In addition to direct marketing on consumers, is it important to focus on travel agents. They play an important role in the booking process of people who want to travel to South Africa. In addition, it’s also the case that once you get to a travel agent, they also keep regular bookings with you.
Problem formulation: Africamps wants to better respond to the wishes and needs of travel agents in the Netherlands.
Research objectives (SMART): Within the period of five months provide AfriCamps a strategy/plan which provides AfriCamps a better insight in travel agents wants and needs.
Research question: How does AfriCamps make it attractive for Dutch travel agents to include them in their booking file, which also results in bookings?
At the end of the in-depth assignment the research question will be answered by means of analysing and evaluating the progress of the marketing plan. When the research question is answered, there will be a clear view for AfriCamps on how they can market their product to travel agents and arrange more bookings.
Sub-questions:
What is AfriCamps and what does the business process look like?
Who is the target audience of Africamps?
Why do people choose a travel agent?
What does the consumer’s booking process look like?
What does the booking process for travel agents look like?
What are competitors doing?
How dependent is AfriCamps of travel agents?
What is important for travel agents?
Reviews: what is the impact of review sites for travel companies?
Price
How to meet new travel agents?
How does the industry of Africamps look like?
What are the trends and developments in the south African travel market
4. Methodology
Micro
• What is AfriCamps and what does the business process look like?
• Who is the target audience of Africamps
• How dependent is AfriCamps of travel agents?
Meso
• What are competitors doing?
Macro
• How does the industry of Africamps look like?
• What are the trends and developments in the south African travel market
Customer analysis (meso level)
Travel agent analysis (meso level)
• What is important for travel agents to work with a accommodation company ?
• What does the consumer’s booking process look like?
o Reviews: what is the impact of review sites for travel companies?
o Price
• How to meet new travel agents?
• What does the booking process for travel agents look like?
een korte beschrijving van het bedrijf, de opbouw van de organisatie en de markt waarin deze
zich beweegt;
een weergave van de probleemstelling (hoofdopdracht).
een (voor het bedrijf) inzichtelijke verantwoording van het plan van aanpak en de gehanteerde
methoden en technieken.
Een beeld van de keuzes die je hebt gemaakt en de overwegingen die daarbij een rol hebben
gespeeld op basis van vakliteratuur.
Een theoretische onderbouwing van de gemaakte keuzes en modellen met verwijzing naar
vakliteratuur.
Resultaten, conclusies en aanbevelingen (geen implementatieplan);
Als bijlage de opdrachten zoals omschreven bij ‘kringgesprekken’ (paragraaf 4.4).
5. Research level 1: micro
Who is africamps?
AfriCamps is a company that rents out boutique tents in the most beautiful places around the Western Cape. They have three locations where they have built tents. These are Swellendam, Oudtshoorn and Robertson. In the future they will set up more camps around South Africa. The first camp started in November 2015, this was AfriCamps Klein Karoo in Oudtshoorn. The second camp, AfriCamps at Kam’bati in Swellendam started in August 2016 and the third and the last camp, AfriCamps at Pat Busch in Robertson started in November 2016. AfriCamps is a start-up company who started with their product in 2014. AfriCamps is all about the experience for their guests. Not everybody likes camping but with this product you can still have the camping feeling but in a “glamorous” way. You can find the camps on family farms. This family will show the guests all about their farming business. In the meantime the family becomes the host, which means that they will arrange everything on the camp like breakfast, sort out any problems with the tents and take care of all the facilities that the guests can use .AfriCamps as a company places the tents there and takes care of all the bookings and the marketing of each camp. AfriCamps’ philosophy is strongly based on the foundation of sustainability. That is why they make their own tents. They hire people from the a strong unemployment area and train them to help them in the work field There is a really high scale of unemployment in South Africa and a lot of companies want to help to change it, AfriCamps is a part of those companies. (Kaapstad Magazine, 2016) (AfriCamps, 2015)
Business structure
AfriCamps was founded by Manou Bleumink and Jeroen Roodselaar. They are both Director of Africamps. In addition, there are a number of shareholders. AfriCamps has 3 clear divisions in their company, which are: headquarters, factory and camps. The headquarters in Cape Town in this office include the departments: marketing, reservations and finance. The factory is in the town of Atlantis near Cape Town. Here is the board and production. For a complete overview of the different departments within AfriCamps see appendix.
Strategy
AfriCamps is now on the point of 15 tents and is currently upgrading to 27 tents. 27 tents owned by AfriCamps and 4 individual landowners. AfriCamps Rentals is part of AfriCamps Production, South Africa’s manufacturer of boutique camping tents and accessories. This provides AfriCamps Rentals with a unique position in the rental industry. It enables Africamps Rentals to influence the design, manufacturing and maintenance process of the tents. Together with the landowner, they are going into a partnership which ultimately means that both parties are responsible for a number of things in order to achieve a good result together. For an overview of who is responsible for what see appendix.
Facilities camps
Every AfriCamp location is unique and unique and has its own added value. Every camp has 5 tents where 5 people can spend the night. AfriCamps focuses on a number of facilities that are standard on each camp. AfriCamps tents are all equally equipped. In addition, there are several facilities at each camp. However, they differ by camp. Below an overview:
Equipment tent: standard equipment of the tent that is the same on each camp.
Facilities camp: facilities available on each camp.
Variable facilities: facilities that are present at some camps but do not belong to the standard facilities.
Equipment tent
Facilities camp
Variable facilities
• 2 Queen size beds
• 1 Single bed
• 2 Separate bedrooms
• Own bathroom
• Air conditioning
• Wood burning fireplace
• Electric blankeds
• Private braai area
• Fully equipped kitchen
• Microwave
• Deck with fireplace
• Activities
• Breakfast (optional)
• Firewood
• Reception
• Pool
• Rental options
• Shop
• Bar
• Dinner package
• Dam
• Wi-Fi
Revenue division
The most important ones are the channels that generate revenue. AfriCamps’ sales can be divided into 4 parts:
– Travel agents
– Direct South-Africa
– Directly worldwide
– Booking sites
Under travel agents, we mean travel agencies that make travel for people in South Africa. This is an important group for AfriCamps and it is important to continue to focus on this group. For this turnover, a commission has already been charged for the services provided by the booking agent. The revenue share directly South Africa and worldwide is the revenue that comes directly through the AfriCamps website or through the site of one of the camp owners. These also belong to their own channel. Booking sites are websites such as Booking.com which brings the vast majority of sales within this segment. For this turnover, a commission has already been paid for the services provided on the booking website
Commission
Important to mention is that the bookings that come through travel agents and booking websites are subject to a so-called commission rate. This commission rate is a payment that must pay an accommodation when there is a booking posted through these channels. The average commission is between 10% and 30%. (Tourism Council , 2016). The commission that AfriCamps give their travel agents is max. 15%.
1. Conclusion | research level 1: micro
Africamps is a company that is based on a well thought out concept and which has been well received by the crowd and where there is still a huge growth potential. Because AfriCamps’s concept involves collaborating with landowners, both parties are responsible for their own duties to ultimately succeed at the tents. It is a strong concept that provides good returns for all parties. Because AfriCamps carries out the design and construction of their tents, they can adapt and improve everything in to the smallest details, which provides a very good tent and flexibility when adjusting. And ultimately, it also saves enormously in production costs because they have their own factory.
The facilities of the camps are different. There are, however, an important number of facilities standardized in each camp. For example, every AfriCamp tent is almost the same. However, there are some “variable facilities” that are present on some camps, but not on the others.
The organization’s turnover is good and there is no focus on one type of customer. It’s important to focus on multiple channels and not pinch on 1 channel. As the booking sites of now gain an ever-increasing power position and this will eventually translate into more difficult terms and more payouts. This indicates that it is important to keep optimize the organization and attract customers to their own channels.
2. Research level 2: Meso
Competition
There is a lot of competition in the market in which AfriCamps operates. It is a market that is growing rapidly because tourism is growing steadily. This means that new competitors will also come along. Competitors can join but the threshold is quite high as a huge investment is needed to really compete in this market. However, it is interesting for big investors to invest in tourism in South-Africa. The South African economy has already seen an increase in revenue from tourism. (Worldbank , 2013) AfriCamps has so far distinguished itself from its competitors due to its unique locations and accommodations. Until now, this has not been seen in South Africa. In the appendix there is an elaborate model of Porters Five Forces.
Competitors
Name
Lowest price
ranking
Differences
Social media*
Buffelsdrift game lodge Oudtshoorn
2 persons €133.-
****
Smaller, less furniture’s , free breakfast and spa&safari, only for 2 persons
FB: 8K
IN: 0,4k
TW: 0,7k
YT:0,1K
Brackenhills Swellendam
2 persons €60.-
****
Only for 2 persons, bathroom outside
Kitchen outside
FB: 3K
IN:0,1K
Lacewood tipi lodge Robertson
2 persons €30.-
***
bathroom outside
Kitchen outside no furniture’s except the beds.
FB: 11K
IN: 1,5K
TW:5K
Rivierzicht bush camps
2 persons €45.-
****
Shared bathroom, less furniture’s, outdoor kitchen
None
* Social media figures in followers. Abbreviations social media: FB: Facebook, IN: Instagram, TW: Twitter, YT: Youtube. (Kamer van Koophandel, 2017)
Booking.com is a good measure when you want to look at the competition in a particular area. In South Africa there are currently 12.365 accommodations. When selected for the following criteria, where AfriCamps is satisfied, 236 direct competitors are distributed across South Africa with the bulk in the Western Cape.
Criteria:
– Price: ZAR 1,500 – ZAR 2,300
– Location score of guests: 9+
– Number of stars: 4 stars
– Overall rating: 9+
Overview of accommodations in South Africa (AfriGIS (Pty) Ltd, 2017)
Customer analyze
AfriCamps is focusing on two different market segments: international visitors and local week(end) visitors. Both like experiencing Africa’s great outdoors in its most authentic form, but with the comfort and amenities of luxury stylish accommodation. For the 6w’s Ferrel see appendix.
International visitors
Some international visitors are already familiar with the boutique camping (glamping) concept from Europe or America. But even traditional camping in South Africa is not yet well known or popular in this market segment. The reason for this is that the camping options that South Africa has to offer were always close to impossible to use for this visitor group. They come to South Africa by plane, with limited luggage space making it uneasy to bring own camping gear. AfriCamps believes that there is a huge potential to introduce outdoor style holidays in South Africa to this large market segment and to become market leader in this (for international travellers) new market.
Local week(end) visitors
South African’s are not familiar yet with the term boutique camping (or glamping). They are aware of the enormously expensive luxury camp options in South Africa’s private game reserves. Luxury camping at a local farm, nature reserve or just the most beautiful piece of private property is completely new to them. Like in the rest of the Western world there is a growing desire for authenticity – exemplified by the popularity of local produce, farmers markets, organic foods, craft beer – and good times with family and friend outdoors. Also local people that might not be able to buy their own camping gear, will still want to go out and ‘camp’. Because boutique camping ticks all these boxes AfriCamps believes that there is a huge potential to introduce this global success formula in outdoor recreation to local South Africans.
Africamps divides its two markets segments in three target groups. Further explained in the apendix.
3. Conslusion | research level 2: Meso
AfriCamps is in a market with many competitors, which are also common in the Western Cape, where AfriCamps is also active. Of the total 12.365 accommodations in South Africa, 236 meet the same criteria as AfriCamps. The tourism market in South Africa is a market that is growing rapidly and offers many opportunities for entrepreneurs. However, it is not easy for new entrants to enter the market because of the big investment needed for these products. That does not mean that it is not interesting for investors to invest in the South African tourism industry. Because AfriCamps has an almost unique product, they can distinguish themselves well. So the competition is not a real danger but it is good to keep an critical eye on them. AfriCamps focuses on 2 markets: international visitors and local week (end) visitors. In both groups there is still much to get, given that there is a lot of demand for products like AfriCamps. The customer chart also shows that the Dutch market is the 1st largest, which also indicates that the product is in line with the Dutch market and thus also with Dutch travel agents.
4. Research level 3: Macro
Power of booking websites
The accommodation booking engines are generally referred as “Online Travel Agents” (OTAs). The system varies but it is always the case that the site raises a commission for each booking. That can be a small percentage, but can also increase to more than 25 percent on some sites. A booking site can be a useful business partner to generate clientele, but this cost tag must always be taken into consideration and should always be balanced whether the cost is worth the service. A problem with this is that over the past few years, the OTAs have become so inevitable that they will increasingly offer their services to accommodations under strict conditions. The most well-known of these terms are the “rate parity” (lowest price guarantee for the OTA) and the availability parity (as many rooms offer through the relevant OTA). However, that does not mean that OTAs are also active in other areas. In Europe, we will see experiments showing the OTA not only the booking, but also the payment int (and then without the commission). OTAs provide assistance to manage accommodation websites, so that they get full access to all the booking traffic of the accommodation.
Influence of reviews
98 % of the sample population check reviews and 60% do this often or quite often. However, online reviews influence consumer purchasing decisions only when consumers’ reliance on online reviews is sufficiently high when they make purchase decisions. To increase consumers’ reliance on reviews, the objectives of the different platforms should be to build trust for the consumer, promote website and service quality, facilitate member matching and offer consumers sufficient information as well as a user friendly design (Dellarocas, 2010; Huang & Benyoucef, 2012). (Nina Isabel Holleschovsky, 2015)
Important review websites
Obtaining reviews is very important for companies from now and days. There are therefore some reviews pages that are indispensable for companies. A higher review rating means more bookings in the case of AfriCamps. All review sites listed below use the so-called verified reviewers. That means checking whether this is a real user or someone who may be hired by a company. (Abramyk, 2017)
– Tripadvisor (especially for travel industry)
– Booking.com
– Facebook
– Google My Business
– Yelp
For an additional overview of the review websites see appendix.
Actual development South African tourism industry:
South African travel market continues to grow. Market value: The South African travel & tourism industry grew by 5.1% in 2015 to reach a value of $18.6 billion. The South African travel & tourism industry had total revenues of $18.6bn in 2015, representing a compound annual growth rate (CAGR) of 6.7% between 2011 and 2015. In comparison, the Nigerian and Egyptian industries grew with CAGRs of 5.3% and 0.1% respectively, over the same period, to reach respective values of $24.9bn and $18.6bn in 2015.
Market value forecast: In 2020, the South African travel & tourism industry is forecast to have a value of $24.9 billion, an increase of 33.9% since 2015. The South African travel & tourism industry has been growing strongly in recent years and the industry is expected to grow at similar speed in the forecast period. (MarketLine, 2016)
Trends and developments travel industry
Millennials:
The millenials are the most important generation in history. This generation has a decent income and is very busy traveling and tourism. Ultimately they are the ones who determine the trend for the other groups. For AfriCamps, it is important to consider such groups because belonging to AfriCamps’s immediate target group. Focusing on this group is therefore essential. (Diamandis, 2015)
Food tourism:
Food tourism has become a huge trend. Tourists go to a country to get a real view of culture and local delicacies. According to Change UK Editor Patrick Whyte at TouRRoir 2016, food experiences are not limited to simply dining out. It includes cooking courses, farm tours and the classic food markets, which make up about 95% of these experiences. South Africa also has a culture that goes with good wine and good food. AfriCamps can respond to this through cooperation with local restaurants and local farmers, as they are doing a bit.
(Diamandis, 2015)
5. Research level 4: Travel agents
Conclusion Survey travel agents
Recommended sample size
377
This is the minimum recommended size for a representative sample of the research population
This online survey was held under 65 travel agents from all over the world which book accommodation in South Africa. For this survey, Google Forms has been used. The respondents are approached by mail. The recommended sample size was 377 for a representative sample of the research population. This is unfortunately not achieved. The results of the survey are therefore not representative. However, very interesting information has come in, which can certainly be used by AfriCamps. (Steekproefcalculator, 2017)
The top areas where the travel agents are mainly operating are Western Cape 32%, Garden Route 20% and Kruger 20%. The top 3 most visited cities / places are Cape Town, Knysna, Johannesburg. The types of accommodations that the travel agents book are different. Most of the times guesthouses and hotels are booked. Furthermore, most choices are freely divided. They indicate that it can be anywhere as long as the accommodation has a unique experience. The average budget in which they operate is: between 1,200 and 2,100 ZAR per night for 2 adults (converted between € 85 and € 150). There are no agents booking bookings that cost less than 500 ZAR (€ 35) per night for 2 adults. 62.1% of the agents indicate bookings that are 4 star. Only 13.8% indicates that 5 star accommodations can be booked. The main target audience of the agents are couples and in the 2nd place are the families. The respondents have also been asked if there is a need for packages such as an activity package or the addition of meal packages. Approximately half of the respondents indicate that guests often want to decide where to eat and what they are going to do on site. The majority of respondents indicate that the commission rate is 20%. It also rises to 30%. Important facilities in an accommodation are a private bathroom and separate bedrooms. The remaining choices differ. Outside the accommodation, the agents attach the most value to a swimming pool and a reception that is open for questions for guests. To make an agent a repeat client is necessary to have excellent service. In addition, transparency and mutual trust are greatly appreciated.
Conclusion Interview travelagents
There have been 3 interviews with travel agents, who have already made bookings or are planning to place a booking with Africamps in the future. It has been asked how the booking process looks and how they book an accommodation. And in addition, there was asked what tour operators expect from an accommodation and how they decide to work together with a party. For the transcribed interviews see appendix. The main findings from the interviews are that the service that an accommodation offers must be outstanding. This is not the case for the service of the accommodation itself but for the service that comes when booking an accommodation. Because travel agents are dealing with a lot of different parties, it is essential that the response time is very fast so that they can quickly switch between these parties. Before making a booking, an offer will be made to the customer first. In order to do this, they will ask to keep the availability so that the customer can decide whether he or she agrees with the proposal or, if necessary, need to be changed. So, it may be happening that they will aks to hold availability for 10 days to hear that it may not continue. This is a risk and must be offset against earnings. The commission is also an important thing for the agents. They expect a respective commission for their services and expect it to be more as soon as more bookings are made by them.
Meeting new travel agents
The interviews have shown that the best place to meet travel agents is not a fair. The cost of travel agents to go to a fair often does not match the merits they can make. To meet new agents, it is very important to go networking with as much as possible. In order to provide them with more information about the accommodation, tours and activities. This can be through in-person networking events, industry conferences, social media and review websites. The online channels are also important because they do not remain unseen for travel agents. When the marketing is good, it will also reach the travel agent in the long run. It is important to be open and honest about your product and price information. In addition, it is important that there is a clear plan of how agents can easily book with you.
Booking process of a travel agent
The interviews gave a clear view on how the travel agent’s booking process looks like. In the appendix is a summary of the booking process step by step. The most important thing for a travel agent is that when they planning to book an accommodation is that they can hold the availability. This means in practice that it may be that accommodation availability should be kept for 10 days and then finally booked. It may also be that the customer does not agree and that the accommodation is skipped in the trip. In addition, the experience of the final visitor is deciding for the agent whether to come back or not the next time. The customer will always be asked for his experiences after his trip and these are very important.
1. Conclusion | Research level 4: Travel agents
This chapter has shown that there are a number of preferred locations where the travel agents mainly book. These areas are: western cape, garden route and Kruger. In terms of accommodation it is important that it has a unique experience that can offer a real added value to a trip. The average price for accommodation for 2 sharing adults is between 1,200 and 2,100 ZAR and with a 4-star accommodation. The main facilities that an accommodation must have are private bathroom, separate bedrooms, a swimming pool and a reception that is open for questions for guests. When looking at the above results, AfriCamps is definitely in the right direction. However, some facilities are missing in some locations. The commission normally paid to travel agents is on average higher than the commission they can get from AfriCamps. Current commission rate at AfriCamps is max. 15%. Increasing this would make it a lot more attractive to book as a travel agent at AfriCamps. To make travel agents a recurring customer, it is important to have a high level of service, in addition transparency and mutual trust are greatly appreciated.
The most important for a travel agent are:
1. Unique accommodation
2. Facilities
3. A high commission rate of 20% or more
4. Hold availability for maximum 10 days
5. Outstanding services
6. Transparency
7. Fast replies
8. Reviews of customer
In order to get in touch with new travel agents, it is important for AfriCamps to focus on networking events, industry conferences, social media and reviews websites. Travel agents also look online in search of new accommodations. I there is a high rating they can’t miss you.