Africa Tour Operator challenges others by diverting some of its fees to communities

Skift grip

Convincing travel agencies to take less commission is a difficult task, especially after the pandemic. But Niarra Travel believes that getting more money into the hands of local communities requires bold steps and immediate action. The severe decline in tourism revenue and its impact on African wildlife and communities means that now is the time.

Rashaad Jordan

Tourism in Africa has suffered greatly during the Covid era, as border closures and travel restrictions have led to billions in lost revenue and helped to eliminate a large number of jobs in the industry. The downturn in tourism on the mainland has also posed a major threat to wildlife, as many poachers have felt free to go to places where they don’t have to worry about being spotted by tourists.

So tour operator Niarra Tourist attractions challenges the travel industry to do more to strengthen communities in Africa, hoping to set a precedent and create a model for others.

The London-based company takes far less than other tour operators in commissions – 10% in the case of Niarra – which often reduces profits that can be directed towards conservation and sustainability efforts.

Niarra instead uses the money that would have been used to pay additional commission fees to help hotels and lodges pay for sustainability initiatives in their communities. The company’s practices could push other tour operators to adopt similar models, although some rivals have expressed doubts that they can follow in its footsteps.

“If we don’t support and invest in these communities, we may not even have these areas that the industry depends on in a few years,” said Byron Thomas, founder of Niarra.

“Challenging a company to take less commission is not the easiest pill to swallow. However, the reasons behind this are something most people in the industry can see and understand.

How to get more money for communities

Many travelers to Africa – especially on safaris – use travel agencies to simplify the planning of their excursions, and safari companies generally pay for the services of agents through commissions, because without the agents, tour operators generally have a harder time generating leads through marketing. Referral from an agent, in some cases, can be up to 40% of the cost of the trip, leaving the rest to companies to cover expenses such as labor, operations and maintenance.

“When you look at commissions globally, Africa is by far the most lucrative in the way it is set up. (It) can attract elements that are simply there for profit,” Thomas said.

But what steps can companies take to ensure that large sums of money from tourism – the United Nations Environment Program has reported that only $5 out of every $100 spent in a developing country is remained in this destination – are not passed on to intermediaries?

Thomas recommends shortening the booking channel, adding that even after a travel agent has contacted an international tour operator, the process of booking trips to Africa may include several additional steps, such as the need to contact international wholesalers, destination and accommodation management companies. suppliers.

Furthermore, he said that Niarra always tries to contact the properties directly to ask how the money that would have been spent on commissions can be invested, adding that hotels and lodges often ask the company to take the funds and donate to their foundations.

“Our preference is always for the money to flow back to the property so they’re driven into action at their end,” Thomas said.

Putting more money in the hands of local communities would go a long way to helping Niarra achieve its goals. But how long can the business continue to operate on a 10% commission?

“It’s a viable business model,” Thomas said of his business, which he expects to do $5.4m (£4m) in revenue this year. . He added that Niarra hopes to double that figure in 2023.

“If we achieve our goals, we will continue. And for the moment, we do not intend to change our commitment to this structure.

Obstacles to Niarra’s objectives

Thomas admits that his business model poses several risks for Niarra, the first of which is that his company makes much less margin than other tour operators. In addition, despite a growing desire among many people to travel more sustainablyhe said Niarra needed buy-in from potential customers who were wary of greenwashing due to constant claims about sustainability.

And despite Thomas’ belief that tour operators and travel agents doing business in Africa are facing increased pressure to cut commission fees and invest more in communities, he’s not sure other companies may adopt a 10% commission.

“Each part of this (tourism supply) chain has a different nature of costs,” said Nicole Robinson, chief marketing officer for the luxury safari company. And beyondadding that it could not take a 10% commission like Niarra does because AndBeyond occupies several places in the distribution chain, including as a lodge operator, a destination marketing company and an online retailer.

“You need channel partners to maybe guide or convince people that you can’t meet. And that’s what you pay a commission for.

Thomas acknowledged that trying to bring about major change in the travel industry is difficult. “Yeah, that’s definitely ruffling some feathers,” he said when asked if executives would be unhappy with a possible downward trend in commissions.

“But overall we are all looking for what we can do to improve and change is never easy. Our model puts pressure on people to clearly define their value in the booking channel. »

Nevertheless, Thomas expressed his optimism. Niarra’s model may take hold further across Africa as many destinations and businesses re-evaluate their commission structures. The founder of a safari lounge who pledged to cut commissions noted he knows of no other industry that gives so many of its results. Although many properties Niarra works with are shocked that the company is only asking for a 10% commission, he is convinced that major changes in the travel industry are underway.

“The reaction has been emotional at times realizing what a change like this could mean,” Thomas said.

“We hope that through our success we can give lodges and hotels the confidence to hold their ground the next time they are pressed into a commission negotiation with an agent or operator.”