Q & A: Holding Steady

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Duma Travel has made a big impact on the South African corporate travel management scene, since launching nearly 13 years ago .It now has branches in all the major economic centres in South Africa and has set itself the goal of becoming one of the top five TMCs in South Africa by 2015. CEO Themba Mthombeni expands further on the group’s history and focus areas.

Q: How has your business evolved over the years, since you launched Duma Travel?
A:
Duma Travel has grown exponentially since launching with only one employee in 2001. We now have eight offices and 11 in-house operations. We also launched two new divisions, Duma ICE and Duma Sport.

Q: What are your thoughts on the state of the South African corporate travel management industry?
A:
We are seeing a dramatic increase in government travel, as the various organs of state start implementing the various programmes promised in the last election. In this sector we are also witnessing an emphasis on ways to cut travel costs, but not necessarily volume. In the private sector growth is more constrained and also pushed down by private sector efforts to cut costs. The MICE market is more vibrant. Another megatrend is the more aggressive transformation of the travel industry. Emerging TMCs are starting to get an increasing slice of the cake in the private and parastatal sector, which used to be the reserve of the well-established TMCs.

Q: What is the most pressing issue facing South Africa’s travel management companies?
A:
It is to ensure relevance by ensuring that strategic client questions around cost cutting, technology, duty of care and customer service are answered adequately. The second pressing issue is ensuring that you run a tight ship against the background of a deteriorating economic climate. The third challenge is ensuring that profitable innovation takes place – in other words, innovation that takes the company up the profit curve. Last but not least is ensuring consistent growth.

Q: Your Duma Sport division is approaching its first birthday. What is your assessment of the response to the launch of this product and what have you learnt about South Africans and their interest in sport travel?
A:
The market response to this product has been fantastic and beyond any expectations. Our belief that South Africans are sports mad and love tailored experiences has been fully confirmed.  

Q: What are the key elements in ensuring a great Duma Sport experience?
A:
The sports travel market is currently is driven by pre-designed and mass-sold sports packages. At Duma Sport we are striving to provide a bespoke experience where a sport event is an anchor, but the wider travel experience is given prominence.  

Q: What about Duma ICE? Where does this sit in your business, in terms of importance?
A:
Duma ICE has grown tremendously. It is starting to contribute substantially to our turnover and profit. The travel incentive market has picked up a lot this year. It is as if it has dawned on our corporates that the only way out of a foul economic climate is through growth. For growth to happen, sales teams need to be incentivised.

Q: Do you have expansion plans beyond South Africa?
A:
Yes. We are currently evolving a strategy to move into the rest of Africa.

Q: What are your thoughts on TMCs consolidating and joining forces with competitors? It appears to be quite prevalent in the South African market.
A:
It is essential for clout and negotiation power that ensures that the TMC remuneration structure is improved and that clients get a better deal in terms of negotiated prices. Some of these arrangements also result in pooled resources and efficiency around product development, technology, marketing and training.

Q: What do you make of the new Kenyan visa requirements, and how do you think it will affect travel between the two countries?
A:
It will affect tourism negatively. Tanzania will be smiling all the way to the bank as Kenya’s direct tourism competitor. We have seen this phenomenon in practice between Zimbabwe and Zambia.

Q: Likewise, your thoughts on the impact of South Africa’s new immigration procedures, regarding child travel and the documentation requirements?
A:
Again, in this instance, tourism will be affected negatively. In addition, South Africa will find it difficult to attract skills that are essential for growing the economy.

Q: What does the future of corporate travel look like to you, both in South Africa and worldwide?
A:
In South Africa, I foresee growth in travel volumes, but this growth will be paired with cost cutting. There will also be growth in the MICE market. Internationally, the picture looks more positive with the growth in the US and with Europe, and Japan and China holding steady to positive.