With the South African wholesale travel market dominated by three well-known, long-standing companies, how does a relative newcomer even begin to entertain the notion of nicking market share? Vishal Koovejee, CEO of Salsa Tours, has a simple answer – give the travellers what they want and do it with a smile. Editor Dylan Rogers sat down with Koovejee to find out what makes his business different.
At nearly seven-years-old, Salsa Tours is a youngster when compared with its competitors – Thompsons Tours, Travel Vision and Holidays Tours – who have all been in operation for decades.
“We are a traditional wholesaler and outbound operator,” says Koovejee. “We don’t sell to the man in the street, and when we launched Salsa Tours our core objective was to service the corporate market.”
Salsa Tours deals with travel agents and sells air tickets, accommodation, transfers, car hire, sightseeing, and what Koovejee calls “unique products targeted specifically at corporate travellers” – bodyguards, chauffeur-driven vehicles etc.
“We get products that the other operators can’t,” he says, “and we’ve got in excess of 1,000 suppliers globally.”
The established competition didn’t stop Koovejee putting a full-time law career behind him, to go into this competitive space and set about grabbing his share of the market. His strategy was and remains straightforward.
“Service standards from wholesalers are pathetic,” says Koovejee. “When I looked at the market, I saw the opportunity to penetrate an industry where service, at a wholesale level, is not a priority.”
A sensible and simple strategy, sure, but how do you break the stranglehold of three big, established brands?
“We focused on getting an agent to quote with us just once,” says Koovejee. “No obligation, just quote with us once. Our guarantee is that we’ll turn a quote around in under three hours. We are also between 10% and 23% cheaper than the identical product quoted by the competition, and we offer above-market commission structures.”
This strategy has helped Salsa become a preferred supplier to the likes of SA Travel Centre, Club Travel and Travel Assignment Group. But, the business is not without its challenges. As a traditional outbound operator, having to pay suppliers in foreign countries could present a problem.
“When we started, I approached the four major banks and told them what I wanted,” says Koovejee. “They all looked at me like I was speaking Spanish,” he says. “Then I called a couple of banking lawyers and we pulled out the rulings of the Reserve Bank, and we built our own platform. We took this to the banks, and this time they thought we were geniuses. It’s a great advantage for our Africa dealings, because of the lack of infrastructure for accepting most major credit cards.”
Salsa Tours operates in over 40 African countries, and it’s stating the obvious to say the continent offers its own unique challenges. So, where does Koovejee see the opportunity?
“There’s a huge gap in four and 5-star hotel offerings throughout Africa,” he says. “As protocol, we start at 4-star, because gradings are inconsistent. Basically, Africa needs more hotels of a high standard.”
Infrastructure and telecommunications are the other challenges Koovejee faces.
“The biggest challenge, though, is that Africans don’t understand what service means,” he says. “I’ve had to get rid of suppliers, as I couldn’t carry the reputational risk of that level of service delivery. I’ve got service level agreements in place with my preferred partners, so I can’t have my suppliers take their time with quotes, for example.”
Any business travel trends catching Koovejee’s eye?
“Corporates downscaling, and I’m also looking into security for senior executives,” he says. “We haven’t personally been involved in any incidents, but it’s something we’re very concerned about, because we don’t want to carry any liability. We do try to point out certain hot spot areas to travel agents, and security is becoming extremely important for most corporates.”
“The other trend, like in countries such as Nigeria, is that we’re selling a lot to the usual suspects – the mining guys, the banks etc. Angola is another that has always been a huge money spinner. But we’re also being exposed to territories that multinationals want to penetrate – for example, electronics companies going into Africa with phones and iPads.”
Always with an eye for the gap, expect Koovejee and Salsa Tours to be following close behind.