Chairman of Ashton and Dave Limited, a travel agency, Abiola Lawal in this interview with Chinedu Eze, evaluates the potential of the air travel market in Nigeria, positing that the country has to brace up to fully exploit and benefit from the huge air passenger population. Excerpts:
How do you see the travel market, outbound and inbound from October last year till now; would you say the market is dwindling due to the economic downturn?
I think last year 2015 was a challenging year globally; Nigeria inclusive but I think, having said that, there is still some growth. I think the Director General of Nigerian Tourism Development Corporation (NTDC), Sally Mbanefo shared some statistics with us when she attended the launch of flightboku.com. She said about four million people or so travelled to Nigeria but I can’t tell you exactly what the number of outbound is but it is growing. It could grow some more and it has to grow more but what is important is we have to have the infrastructure to support that growth. Particularly in a very tough environment for oil and gas due to the current low prices of crude, so everybody knows we are over dependent on it.
We need to diversify our economy away from oil and gas but I think it is clear to many people, when you talk about the candidates for those diversification, tourism must be one of them. People talk about agriculture but we have tourism opportunities to actually drive revenue and foreign exchange in Nigeria. Look at South Africa, countries like Kenya; they generate a substantial amount of their revenue from non-oil sources, so I think we have a chance to do that.
Let us go back to your travel company; what was your background, what was the incentive, why did you choose travel in spite the competition in the sector?
I spent about 20 years in United States a bit more than 20 years in corporate world, management executive level. But what is interesting is my first job when I got to US was in aviation; in travel. I worked for company, Skywest Airlines in Los Angeles and I got trained in all the value chain in travel business, from revenue management to ticketing, operation, freight management and all of that. I did that for about five years before I went to graduate school to get an MBA and I fell in love with the travel business.
I spent a few amount of time after my MBA and worked with mostly fortune 500 in companies in the US, Disney, Pepsi, SAP and then ultimately came back to Nigeria in 2015 as the Chief Strategy Officer at Oando Plc. At the end of the day I have put about 20 to 25 years in corporate travel but I have always been an entrepreneur, there is always that itch, like I really need to put my mark or my stamp on something and that something has to be, something that I am very passionate about. And I have always been passionate about travel so it is kind of I have done full circle in terms of my career and I went back to one of my first love which is creating this entity.
We have created Ashton and Dave Travels earlier as a small player to start with which focused on corporate travel and logistics. That company got its IATA license in 2007, which is almost 10 years in that space. I did not devote time to the company then because I had a corporate career at that time till 2012. After that I dedicated my time fully in the travel business, both in aviation logistic and travel management company.
With both international and local experience in aviation how do you define air travel in Nigeria?
Nigeria travel market is dynamic, it is challenging, it has opportunity to grow, it is extremely fragmented and so in strategy we always talk about scale, the opportunity of scale, because the economics of scale does two things for the costing, it improves customer service, and it also has a tendency to provide better pricing in terms of the services or product. So I see the Nigerian travel industry as evolving. But aviation is world class, there is only one standard, there is no two standards. There is a checklist globally, just like when you see a pilot get in an aircraft, it doesn’t matter what part of the world he is; there is a checklist and aviation requires that standard, but that standard is not just for aircraft but also on infrastructure. Your runways, your airport facilities, your apron, your customer service should be top class because the world is a global place today. And one of the things I am trying to bring to this space is that global standard with local flavour.
As I said earlier, we have operated for almost 10 years. The digital travel agent which the company introduced recently, flyboku.com is why I guess most people are finding out what we are doing now because it is a retail place. It is a do-it-yourself place, we call it a DIY, Do It Yourself. I trying to create what we call a digital agent for all Nigerians that need to travel, that need to be mobilized beyond just the road network. You know we have a massive country and people need to get around not just internally but also externally. So for us at flyboku.com it is the vision that I had to say in Nigeria, a country of almost a 170 million people, Nigerian should have first class standards and they should have options. And that first class global standard is what flyboku.com is meant to do.
Flyboku.com is a character that I created, it is that digital agent that you can go online and say I need to go to wherever and Mr. boku does not give me an attitude, it provides all the information you need. You really can go online and find all the information about where you want to go, the price and every other thing and you can do all that all the way to payment without speaking to a single person. Don’t forget technology has made the world a very, very global place, it is has made it very virtual as well, so you don’t need to talk to anybody to actually book a ticket. But it also not just about ticketing, if you look online for flyboku.com, it is the whole nine yard, it is flight, it is hotels, visa is a big deal in Africa, we help people take care of their visa process and car hire and some other things.
We try to integrate it like you would have other major companies abroad. Those things that people are used to globally I feel that we should have that in Nigeria as well and be able to do it thus giving Nigerians other options as well. One last thing to mention here, I think it is extremely important we say to ourselves. What is going to be our differentiator? We are going to differentiate across at least three platforms, one: we think the convenience factor will be there because it must be very accessible, it must be very reliable, it must be very convenient. Number two, I think the price and the affordability of it is very important, people should be able to know if they have gotten good deals and thirdly, in term of differentiation we would like to focus on Africa. We think Africa travel is underutilized. There are 54 countries in Africa, a billion people; don’t forget Africa covers about 30 million square kilometers. It is the second largest continent in the world but we under travel in it.
So the point is that there is opportunity for us as Africans to be able to increase intra-African trade, increase our GDP, our economic development just by increasing inter-African trade. So at flyboku.com, we think it is very, very important for us to enable that process of trying to get Africans into travelling more. Whether you are talking about business tourism or just personal travel in terms of location and places like that, we want to enable that but we want to do it using technology, we want to do it using convenient and we want Nigerians to be able to get the best deals available.
Foreign airlines that operate into Nigeria are said to move all their earning to their countries, do you think Nigerian travellers would do better in their finance and in their operations if more domestic airlines operate more international destinations?
It is always a matter of pride when you see your national flag being flown in other countries. Emirates is a good example for UAE, Qatar has one, Etihad has one for Abu Dhabi, Kenya Airways, Ethiopian Airlines and Nigerian should aspire to have its national flag. But we have to be exceptionally careful because like I said earlier, aviation business is a global business, it requires global standards, there is no short cut, we cannot have the same problem we had with Nigerian Airways that ultimately led it to fall apart. The same answer applies, the same criteria applies with the local carriers, even if it is Nigerian flag carriers, the standards again are the same all over the world, it doesn’t have to be a national flag career, but the thing about aviation that is very, very, clear is like I said it is a global thing, so you have to be able to scale the challenges. This is because if you cannot scale the huddles in terms of your fleet, your cost of operation will be too high to sustain. If you cannot scale in terms of your ability to provide global standards in terms of your customer service then customers will not patronise you.
So what I think Nigerian airlines should at least focus on first is to be very good in terms of their regional expertise first. With its strategic location Nigeria can be a market leader. Whether you are going up north, Morocco, Egypt, those kind of places are fantastic vacation places or you are going west, Ghana, Gambia and those places, you go farther south, South Africa is a good example, Namibia, Botswana those kind of places or even east, Tanzania, Kenya and all those places. So we need to have what I call a real regional integration expertise first. My challenge is we have to be careful we are now saying oh we want to get to the London market, we want to get to the US market, those markets are exceptionally competitive. So even some of the big carriers that have been in the marker for much longer, 50, 70 years experience they still struggle, there was a time when there was a huge consolidation in the American aviation industry, so United and American Airlines have to merge.
So all these consolidations happened because you need scale, you need expertise and so I think there is a lot of fragmentation among local airlines my view locally, and so our airlines if anything in order to get stronger, you need to look at consolidation. There is no reason to have four, five or maybe 10 players flying the same route with one or two aircraft each. But with consolidation, we call it mergers and acquisitions, it can allow you to strengthen and make sure you are very strong in your local market first then you can start looking at some regional play before you really focus on some of these very competitive markets like London, some parts of Asia; these are very competitive markets.
Right now the customers don’t have that much sentiment, ultimately they will look at the product and service and say why do I get the best value for my money and that I think, is a challenge. So I do think we should support the Nigerian carriers. It is clear some of the key players there are ready but I repeat we cannot grow without some strategic understanding of what it takes to be successful there; otherwise you will see people launch into a market and they can’t sustain it. We need to focus on where our strengths are.
I think the major constraint in Africa travel is hindrances of visa and the attitude of countries that believe that if they allow other Africans to come into their country they will come and take things away, so I want you to also look at open sky in Africa.
They say history is always a very good guide. When people get into emotional biases, when they step back they will see that the fact are actually for opening up the skies, opening up the borders to make sure that there is increase in travel and increase in trade, that is the only reason Africa is going to do better. I will give you an example, just about 10 per cent to 15 per cent of the total trade happens within African countries. So that means more than 80 per cent of the trade for African countries are with the rest of the world not within African countries. That means that you can imagine if we can increase that from 10 per cent to maybe 20 per cent, compare that to Europe for example where among European countries it minimum between 60 per cent to 65 per cent that trade among each other.
Asia I think it’s around 20 per cent or more. So what I am saying is the idea that people feeling they need to close their borders can only be a short-term gain, or almost like a myopic view. Because the United States of America is over 200 years old but what is the strategy for really developing America? They opened up the border. America is made up of immigrants, people came and developed the country and I think over time Europe saw that and said wow and that gave rise to this whole idea of European Union, of course European Union has its own challenges too but the idea is that they needed to open it up. That is why we had that whole thing of let people be able to have this Schengen visa because it covers the whole block. Africa has I think about four different economic blocks, there is ECOWAS, KUMESA, there is SADC, and IGAD but even till today the intra-African travel and Africa trade is too small.
And it is a shame that we always want to run to the west to look for solution. Some of those solutions could happen just by increasing Africa trade and the way to do that is number one, you have to bring down the barriers. One of the biggest barriers is visa; you know we have too many different currencies within the African block.
ECOWAS has been talking about having one currency for the last 20 years and it’s all talk, nothing has happened. So that means between Nigeria and Ghana you have to change currency, from Ghana to Senegal, from Senegal to Sierra Lone, I mean about it, it’s crazy. Compare it with the European Union, it doesn’t mean there is no challenges in those places as well but you can understand that overall the positive is much more higher than the negative. So we need to lower the barriers to entry into some of these countries. Some of these African countries are some of the hardest places to get visas to and one of the value that we bring to the table at flyboku.com is that we are actually helping our customers breakdown that visa process barrier band make sure we provide serious information of that process.
We have been doing that on the corporate side for almost 10 years just like I said and we think we can provides that kind of value for Nigerians as a whole. I am a big believer that this whole idea of promoting intra-Africa travel has a net-net benefit to not just Nigeria but also the rest of Africa countries. If we can open up our borders, minimise this whole visa process, reduce our currency disparities, hopefully get some common currency blocks just like you have in Europe, I think it can only be a long time benefit for everyone. The Brooklyn Institute and World Bank have done some good research on it, if Africa can just increase its share of intra-Africa trade by 5 per cent, 10 per cent, the massive effect on GDP across the African continent will be great. So whether you are talking from a business perspective or also on a social integration perspective, you don’t fight people when you break bread with them or when you visit them, when you understand their culture. Africa has been plagued by too many inter regional conflicts for the last several decades but I think if you open it up and people can begin to exchange travel and share ideas, it will reduce some of those conflict as well.
Talking about technology, you know in Nigeria Internet access is very high but it has not been broadened to every part of the country, don’t you think this limits your market as a travel agent? And when you look at flyboku.com, which is a very sophisticated digital agent without broadened Internet access, not all can reap the benefit of what it offers?
There are three things that I see that are going to make a difference in terms of our penetration. Number one is what I call globalization, it is a global world out there and we cannot underestimate that the customer is getting sophisticated every day. So when they are in London or when they are in US or Asia or when they are even here in Nigeria they have access to the best services. So we must provide that as well. That is one, globalisation is a big deal. Digitalisation, which is technology, which speaks to your point about penetration, I think the Nigerian market to be fair, access to data is improving; maybe it should improve at a faster rate. If you think about it when GSM came about 15 years ago Nigeria only had about half a million fixed lines, 15 years later we about 100 million lines, for everybody it is pervasive. And we are not just talking about voice any more we are talking about data and access to the Internet. Because 20 years ago flyboku.com could not have worked in Nigeria because access to data and Internet service was poor. Today I am very confident that it could work and it will work because if you look at the retail side a number of players opening up the retail side of product but this is a fantastic opportunity on the service side.
So why we think the penetration can only get better, there is a law that essentially says every 18 months the capacity of technology doubles and the price at the minimum is reducing. And it is a global phenomenon it is just not limited to Nigeria. So as the capacity, as fee and access is increasing the pricing should be reducing and while sometimes it takes a little bit of time to catch up with the rest of the world, I have no doubt this law applies to Nigeria as well. Before SIM card was expensive but now SIM card is being given away for free, nobody is selling SIM car anymore. And you are going to see that on the data access as well. So I think that is one of the sore areas where we will improve access.
Now on the issue of fragmentation, the travel agency business is exceptionally fragmented. For me I think it is about value and differentiation and I think we could have had a website two or three years ago but we really did not just want to have a website for the sake of having a website. We wanted it to be different, we wanted it to stay true to some of the key things we said we would have. There are four elements that we said our website must do, one, we said it must be very accessible, that means wherever you are you can access it, including mobile platform, we think that is very important. Two, we said it must be very reliable, reliability means you will be able to perform a function like you could do anywhere else in the world. So the standards will be very global. And then we said it must be affordable, that means the right bills must be on the platform, Nigerians must be able to say, okay I am willing to do this because the price makes sense. And finally, and this is the one that is dear to me, I said it must be fun. Because travel is a global industry, sometimes it is a bit stressful, so the process should not be stressful, it should be fun. And that is why we like this idea that Mr. Baku is always there.
Mr. Boku was created as a fictional character like I said earlier, in the parlance of Nigeria, to say flyboku.com-lest fly plenty but let Mr. Boku minimize the stress of what it takes to plan and execute your travel. Whether you are talking of business travel or personal travel or social travel or family travel or religious travel or whatever, the idea is access to information, real time information convenience so that from booking to ticketing, including your post sales service to port we provide a differentiation. It is something that my staff has been doing exceptionally well. I think we have some of the best people in the industry and we are very, very happy to extend that, what we have been doing offline into the online world. And as you saw also on the launching of the website, we just got publicly endorsed by Nigerian Tourism Development Corporation, the DG, Mrs. Sally Mbanefo was there as the special guest of honour and publicly demonstrated the solution and endorsed the solution. And the idea again is that it cannot just be private sector, it cannot just be government, I think it takes the entourage to make any industry work. We think we are on the right part to make a difference in the travel and tourism industry.
