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Technology Disrupting Global, Local Travel Industry

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By Gbemisola Aruwayo-Obe

 

Nigerians from all walks of life love to travel. Like folks elsewhere, they feel deeply emotional about travelling. Although they may chit-chat about banking, shopping and similar experiences, discussions about their favorite airlines, miles, discounts, upgrades and boarding privileges also strike a deep cord with them. Regardless of social status, we all seem to be united by two things: our aspirational lifestyle and our individual and collective urge for excellent service delivery. Embracing digital innovation (technology) would help fast track the attainment of these social and economic realities.

 

While travelers around the world may differ in their hospitality tastes and preferences, the Internet has helped to flatten the world. Commercialization of the Internet has also introduced digital innovation into the travel and tourism industries, bringing with it a raft of new products, services and experiences. The digital influence is daily transforming the entire value chain of the hospitality sector, and this digital disruption is being embraced by travelers and operators alike. Take online checking in and self-service terminals at airports, for instance.

 

What about software which allows travelers to select destinations, flights and airlines, hotels, car hire companies and concierge services from the comfort of their laptops or hand-held devices? 20 years, you would have needed to visit or place a phone call to an airline or travel agent to access these sorts of services.

 

In hospitality establishments across the country and even around Africa, innovative technology is gradually bringing disruption to business models and customer expectations. Digital innovation is creating new challenges and opportunities for the travel industry. As with other industries, travel services customers have grown accustomed to individualized arrangements.

 

Whilst service quality levels may not be optimal in the fast-developing economies of the world, travelers in these regions are also not shy of demanding more comprehensive and consistent experiences and are becoming less tolerant of both inconsistency and imposition. Travel customers now expect streamlined processes, convenient self-service options and one-of-a-kind experiences. They are willing to quickly shift buying behaviors and preferences if they do not get what they are seeking.

 

This is the way it should be. However, this is not always how things have been over the last 20 years or so for members of the public who need to patronize airlines, hotels, transportation providers and other service providers in the business or leisure travel value chain. While hospitality industry analysts have called for increased public sector investments in the sector and in some cases, sectoral reforms which will galvanize domestic and foreign direct investments, there is also the need to realize that the entire hospitality landscape is undergoing disruption, as new entrants continue to leapfrog established travel businesses by applying digital technologies in innovative ways, whether it’s businesses that rent private homes to strangers or provide one-way car services.

 

Executives in the industry recognize the ongoing disruption and the impact of digital innovation on their industry. In 2016, an IBM Institute for Business Value’s Global Ecosystem Survey, conducted in collaboration with the Economist Intelligence Unit, consulted the opinions of more than 2,000 cross-industry leaders. Study findings include:

 

63 percent of the surveyed travel industry executives report that traditional value chains are being replaced with new value models.

Half of the surveyed travel industry executives indicate that boundaries between their industry and others are blurring.

57 percent of surveyed travel industry executives say that competition from new and unexpected sources is beginning to impact their businesses.

 

According to another report from the IBM Institute for Business Value, the global travel industry can sustain its momentum by meeting and hopefully, exceeding travelers’ personal expectations by embracing the philosophy of a Digital Reinvention.™ There is a three-step process, which includes:

 

1) Digitization improves efficiency by applying technology to individual resources or processes. Within the context of travel, digitization involves setting up digital systems that support processes such as online ticketing, but has evolved into online services where customers book directly with providers rather than through traditional travel agents.

 

2) Digital transformation involves the integration of digital functions or processes across an organization. By combining a set of systems and processes, digitally transformed travel businesses can offer their customers individualized experiences. An example of increasing importance is the ability of travel providers to combine data collected through travel booking sites, as well as customers’ personal social media channels, to deliver highly customized vacations.

 

3) Digital Reinvention of travel goes even further. Digitally reinvented travel involves a fundamental re-imagining of the way an organization operates and engages with customers and other stakeholders. Digital Reinvention at its most fundamental puts the customer first in all of the organization’s dealings to deliver travel experiences that are personalized for individual customers.

 

Digital Reinvention combines multiple digital technologies, including cloud, blockchain, mobile and the Internet of Things (IoT), to transform customer and partner relationships and to create new business ecosystems. Often, the most successful digitally reinvented businesses establish a platform of engagement for their customers and partners.

 

These are the steps, the benchmarks if you like, that many Africa-based travel industry operators need to adopt to take their game to the next level. Digital disruption is a reality of the global travel industry. The earlier and faster we embrace digital disruption locally, the more efficient our travel and hospitality systems will be.

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IMF Cuts Global Growth Forecast

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By Jameel Ahmad, Global Head of Currency Strategy & Market Research at FXTM,  commentary following news that the IMF has cut its global growth forecast.

 

The headline that the IMF has downgraded its economic growth projections for the first time since July 2016 is naturally not positive news for investor sentiment. There are a few ways that this news can be digested. One is to accept that expecting global growth at a rate of 3.7% in comparison to 3.9% still represents a healthy pace of growth when you consider the severe turbulence that the global economy has faced over the past 10 years. But on the other side, there are concerning comments from the IMF that a combination of trade tensions and stress in emerging markets is behind the modest downgrade in growth expectations, along with even more worrying comments that the IMF is concerned that global growth might have plateaued, indicates to a degree that there are also reasons for investors to be uneasy about the IMF downgrade.

 

For one, the comment that global growth might have plateaued indicates to a degree that current growth rates are as good as the global economy will get. This means that any optimism global growth could peak above 4% over the next few years is ambitious at best. When you then consider that there are a plethora of trade uncertainties that remain unknown and are completely unpredictable, then this might be just the first in a series of several growth downgrades from different institutions. The external uncertainties around trade tensions are also one of the underlying factors behind the stress seen in emerging markets, because investors naturally do not want to carry risk into their portfolios.

 

When I combine all these together, I would ultimately be more concerned about all of these unknowns and the comment that global growth might have plateaued rather than accepting that a downgrade from 3.9% to 3.7% is not that disastrous in the greater scheme of things.

 

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Optimism Builds that Dollar Turning Corner Lower

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By Jameel Ahmad, Global Head of Currency Strategy & Market Research at FXTM

 

Currencies throughout Asia have welcomed the news that the Dollar has tumbled to a near 3-month low. A number of different currencies in the region have advanced against the Greenback, with the weakening momentum for the Dollar benefiting the Indian Rupee the most at time of writing.

 

Indications that the market is turning more negatively towards the Greenback would represent very positive news for emerging market currencies, in particular those having received a pounding over the past couple of months in response to prolonged Dollar strength. This can be seen during trading today with the Thai Baht, Chinese Yuan, Philippine Peso, Indonesian Rupiah, Malaysian Ringgit and Indian Rupee all strengthening.

 

The exact catalyst behind why the Dollar is weakening is not easy to point out, but the main contender is that fading fears over trade tensions are providing traders with a reason to take profit on Dollar positions that have been building for months. Another round of reassuring comments from authorities in China indicating that the Yuan will not be used as a weapon during-trade tensions has also been looked upon positively by the market.

 

It does go without saying overall that the prospects for more potential weakness in the Dollar moving forward would of course be widely welcome news for a long list of currencies across the globe.

 

As we head into the conclusion of the trading week the South African Rand has benefited the most from weakness in the Greenback. The Rand has strengthened above 4% over the past five days, with traders looking very positively on the news that the South African Reserve Bank (SARB) was able to leave monetary policy unchanged yesterday. The news earlier this week that inflationary pressures in South Africa unexpectedly eased in August allowed the SARB to maintain resilience and not follow the recent path of both the Russian and Turkish central banks to raise interest rates, which was a move needed in both the cases of Russia and Turkey to ease inflationary pressures and defend both the Ruble and Lira from further weakness.

 

It is not surprising that the Turkish Lira remained volatile and has shifted between both gains and weakness in the aftermath of Turkey’s finance minister announcing his plan to combat the Lira currency crisis. The market, as you would expect, has looked negatively upon the announcement that there has been a sharp downgrade in GDP growth forecasts for both 2018 and 2019. Growth is now expected to slow below 4% this year and narrowly above 2% in 2019, which is sharp contrast to the overall growth of 7.4% that the economy enjoyed last year.

 

I would keep a very close eye on the British Pound over the upcoming sessions despite the news that the Cable has rallied to its highest levels in nearly three months. Traders appear to have repositioned in recent sessions that there will eventually be a breakthrough in the UK and EU negotiations over Brexit. However, the latest summit in Salzburg failed to result in a positive outcome and the rally in the Pound could fall like a house of cards if markets begin to reprice into the market a potential hard-Brexit eventuality.

 

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How AMVCA Enriches Nigeria’s Economy through Sold out Hotels and Overbooked Makeup Artistes

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The curtains may have closed on this year’s AMVCA awards, but one impressive effect of the showpiece is it’s often overlooked, yet immensely important effect on Nigeria’s economy.

Apart from its extensive cultural impact, Africa’s biggest award show also has a very real economic impact on the country.

The scale and scope of the showpiece means that on a yearly basis, over 600 people are employed to work on the awards, while another 1000 businesses directly and indirectly contribute their services to the success of the show.

The showpiece has also become a major event for tourists, and this is partly due to the continental feel of the awards.

Actors, Actresses, Script Writers, and Directors from all over the continent are nominated for the awards and these nominees often troop into town weeks before the event day to enjoy the Lagos experience.

For a country which is known to have huge tourism potential due to its gorgeous landscapes, it is ironic that an Award show has become one of the biggest tourism pulls of the country.

From weeks leading to the Nominees and Sponsors Cocktail Party, to the days after the event has ended, AMVCA tourists are known to stick around to enjoy the culture of the country.

This means hotels, Ubers and AirBnBs are the major beneficiaries of this tourism experience.

Availability of transportation is a major essential for Africa’s very own Oscars and with the proliferation of ride sharing apps, it has become a lot easier not only for drivers to provide their services but also for consumers to access them.

However, even for the burgeoning transportation industry, there are few times in the year that these drivers are so much in demand, as during the AMVCAs.

Makeup artists, photographers and stylists are at the very top of the AMVCA money makers’ list.

The exciting thing about the award show is that the event is an A-list affair for creatives from all over Africa. What do actresses from South Africa, set designers from Kenya, camera men from Libya and directors from Egypt all have in common?

They all want to look good on the big night and there’s perhaps no better place to that than at Lagos.

Some of the Nominees and tourists go the extra mile of ordering outfits in Nigerian fabric and made by Nigerian designers.

Makeup artistes, tailors, stylists and photographers may give the celebrities the Midas touch they need, but it is the hotels that give them a place to lay their heads before they even begin to get ready for the event.

Many of these nominees and attendees arrive in Lagos days or weeks before the actual event. Anyone who has ever called to book for a hotel around the AMVCA period, can attest to getting the “sorry, we are fully booked” response from a number of top notch hotels.

While the big names may be fully booked, however, the lesser known but more homey hotels get their day in the sun as they get to receive new international business.

Then of course we have the caterers, whose services are especially important because while people from different countries may want to experience Nigerian meals, they would definitely not mind tasting a meal or two that they are familiar with.

It would seem that every aspect of the Nigerian business cycle is activated and empowered in a brand new way, all thanks to the organizers of the AMVCAs.

However, beyond the showpiece which has become one of the most prestigious in the country, the AMVCA offers the perfect tourism opportunity for everyone on the continent and provides an opportunity for various entrepreneurs to exchange their services for money.

All of these have made the AMVCAs a blessing to the Nation’s economy.

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