High agency fees inflate air fares, dampen growth of local tourism

Tourists arrive at the Moi International Airport. A new report says some Kenyan travel agencies are overcharging on air fares. PHOTO | KEVIN ODIT |
Tourists arrive at the Moi International Airport. A new report says some Kenyan travel agencies are overcharging on air fares. PHOTO | KEVIN ODIT |   NATION MEDIA GROUP

Air travel agencies are under the spotlight after a new report revealed that they are overcharging Kenyans for both domestic and international flights, consequently depressing local tourism.

New York-based research firm Millward Brown carried out the research in October and found that some Kenyan agencies are charging more than double their rivals’ prices, ripping off travellers in the process.

The report revealed that the routes mostly affected were Malindi, Lamu and Kisumu – the first two being popular holiday destinations for domestic and international tourists.

Kenya’s tourism sector has over the past two years been severely affected by acts of terrorism and the resultant travel advisories that have caused a dip in visitor numbers, especially at the Coast.

“Traditional agents must reduce their pricing to encourage more Kenyans to travel,” the report titled The Great Rip-off reads in part.

“The current pricing levels among agents go against the nation’s economic agenda. Making travel affordable is the key component of any tourism recovery strategy.”

Millward Brown was commissioned by Travelstart – an African online travel booking agency headquartered in South Africa – to look into the competitiveness of its pricing structure.

Employees from the research firm rung up 60 travel agents across the country posing as potential customers and queried about flight fares for dates ranging from October to May next year.

The enquiries were for 12 destinations – Kisumu, Malindi, Lamu, Zanzibar, Dar-es-Salaam, Entebbe, Juba, Addis Ababa, London, Johannesburg, Dubai and Guangzhou.

The research found that some agents charged customers Sh13,230 to travel to Kisumu and Sh14,725 to Malindi. Travelstart’s clients’ fare for the two destinations was Sh5,715 and Sh7,267 respectively.

Travelstart’s charge for travel to Dubai over the period stood at Sh33,091 while some travel agencies charged up to Sh90,000 for the trip.

Bryan Kariuki, the Travelstart Kenya manager, defended the research saying it was not commissioned to help raise the firm’s business profile but to highlight the pricing disparity in the sector.

“The overall effect of these huge pricing differences is that it makes travel inaccessible to many Kenyans,” said Mr Kariuki during a telephone interview with the Business Daily.

“We could let the lower prices speak for us but when customers call other travel agencies, they get high quotes and fail to make bookings. The economy and all travel agents end up losing.”

The Business Daily was unsuccessful in its attempts to get a comment from the Kenya Association of Travel Agents as their office phone went unanswered on several attempts.

The tourism sector is a key source of foreign exchange for the country, earning Sh463 billion last year.

Frequent terror attacks saw the UK and other Western countries issue travel warnings that have discouraged their citizens from making non-essential travel to Kenya.

The travel alerts saw the bed occupancy level at the Coast fall below 20 per cent during the high-season, forcing some facilities to shut down and others to cut back on their staff numbers.

Changamwe MP Omar Mwinyi recently introduced a private member’s Motion in Parliamnet seeking to fully liberalise airfares and licence more domestic operators to increase competition and bring down cost of air travel.

Air travel, however, has seen increased activity in the recent year with the entry of low cost carriers JamboJet and more recently SouthEast Airlines.