Online client shift cuts travel agency revenue streams

Travel agents are increasingly facing stiff competition from online payment platforms as more travellers shift their preference to cheaper and more convenient modes.

Players in aviation say that e-ticketing is rising as consumers look for cost effective transactions since they have to pay service charges when dealing with agents or travel companies.

“Even though online booking remains at a paltry five per cent of the total revenue, it is growing at a tremendous speed, having risen from almost zero last year” said the cooperate communications manager Kenya Airways Chris Karanja.

From the company’s 2009 financial statement, total sales amounted to Sh71 billion from which Sh62 billion came from passenger tickets while the rest is from freight, mail and handling.

Online ticket sales accounted for Sh3 billion within the period.

“A ticket which costs $900 will go for about $950 when bought from travel agents, with $50 being the service charge” said the director of Charya Travel agencies Bubi Charia.

This is quite expensive, hence travel agents are trying to provide added services to retain clients.

At the end of the last quarter there were 6.4 million estimated internet users in the country, representing a 59.8 per cent increase compared to the previous quarter and an increase of 87.3 per cent in the same period of the previous year.

Officials from the Kenya Association of Travel Agents (KATA), however, insist that travel agents are here to stay, they only need to diversify and focus on providing services based on client specifications.

“We provide consultation and special services to corporate clients and the customer can pay later unlike when dealing with airlines directly where you have pay instantly” said Mrs Beryl Oguta of the Kenya Association of Travel Agents.

In response, travel agencies have developed an internet presence to boost marketing of their products by creating travel websites, with detailed information and online booking features.

“We have special packages tailor made for individual travellers, we are also selling tickets for all airlines ... providing a one-stop shop instead of our clients having to search in many places” said Mr Bubi Charya of Charya Travel agencies in Nairobi.

The internet presents airlines with a convenient tool to cut the time and money spent going through agents for flight bookings.

However, the challenge associated with e-ticketing is that most debit cards have limited transaction value, while air tickets require a lot of money.

The costs and time saved has been a boon to consumers and to companies since they will incur less operational costs.