Some operators are turning the classic business model on its head in hopes of increasing margins and better funding their conservation work. But doing so is a risky move all on its own.
“We don’t have a lot of time,” says Beks Ndlovu, founder of African Bush Camps, of the scramble to preserve Africa’s wilderness areas, which are increasingly threatened by environmental factors such as climate change, human-wildlife conflict and a lack of funding. With 15 lodges across Botswana, Zimbabwe and Zambia, Ndlovu is on the front lines of a battle that he says “is closing in on us.”
Ndlovu is among the safari operators that have realised in the past year that the current tourism model needs a rethink, despite decades of insistence that visitor revenues would sustain wilderness areas, surrounding villages and the animals. That’s in part because of COVID-19, which halted visitor revenues entirely and left tourism-funded reserves across Africa unable to pay their rangers and anti-poaching units. And it’s partially because of long-accepted industry norms, which include hefty travel agent commissions that chip away at profits that can be directed toward conservation.
After months of scrutinising their balance sheets, a radical band of change makers is rethinking the business model of the safari industry – questioning the travel agency fees, requesting that more money be redirected into conservation and creating transparency about where travellers’ money is actually going. Their hope is to tip the scales into balance so tourism dollars are not leaking out to middlemen but rather fortifying the communities and conservancies that travellers are paying to visit. Big ambitions translate into big risks (such as limiting the client base) that could imperil business overall. Still, those involved see no other way of securing these wilderness areas for generations to come.
How it works now
Most travellers heading for a safari in Africa use travel agents to help untangle the complicated logistics that can be hard to understand from afar. The amount of work the agents do can vary greatly. While some weave together complicated one-of-a-kind itineraries, others just copy and paste the same trip package over and over.
Usually, safari companies pay for these services through commissions; without the agents, operators have a harder time generating leads through marketing, and an agent’s referral can warrant as much as 40% of the total trip cost. That could mean $20,000 off a $50,000 booking, leaving the remainder to cover such costs as labour, operations, admin, food and upkeep.
Each safari company works differently. For African Bush Camps, over 50% of gross turnover goes back to the staff, who are hired from local communities. Just 2.5% of the turnover is left for conservation and community initiatives, which are run through an in-house foundation.
“It’s the greatest Robin Hood industry in the world,” says Giles Davies of the high-end safari industry. As founder of Conservation Capital, Davies develops financial and business-driven solutions to support conservation areas; he says few other industries funnel dollars from the West to “remote frontier environments” as well and efficiently as this one does.
Still, Davies argues that the industry stands to do far better.
“It’s absurd that someone could make $300 on a bed night, simply for booking it,” he says of the large travel agent commissions. What’s more, travellers simply sign on the dotted line with no understanding of how their money pays out.
“If you go on safari in Kenya and pay $100, [you’re lucky if] $5 goes to conservation,” Davies continues.
“The whole asset is getting 5% of the value chain. That isn’t right.”
“We can’t be handing out commissions,” says Ndlovu, who says the trade has become lazy, selling whatever is easiest. Ndlovu used downtime during COVID to reset and strategise his business model, which was greatly impacted during the pandemic. Even though none of his staff was laid off, everyone took pay cuts.
“I don’t know another industry that gives away so much from its bottom line,” he says.
That’s why he has committed to working with fewer agents – ones who believe in his mission – and reducing commissions by 5% in the coming year. By 2022, African Bush Camps plans to max out commissions at 25%, as opposed to 30% and up. Bringing bookings in-house is not going to happen soon; doing so would require great investment in both technology and staff.
Savvy Guests Only
Siphoning more conservation funds from each booking is only the first step, Ndlovu argues. A further way forward is to be more selective about his guests in order to maximise the odds that they’ll be mindful travellers and hopefully, philanthropic givers. He is asking the sympathetic travel agents to have more detailed conversations with potential clients to educate them about the fragile ecosystem and its fundraising challenges before they solidify plans.
In addition, the company is now charging a $20 conservation fee per person per night (up from $10, previously), with the aim to double or triple the figure by 2025.
It’s not a huge sum, coming to less than $300 per week per couple—though it comes on top of rates that can hover around $1,500 a night. But every bit helps. If the new barriers turn away some business, so be it, Ndlovu says. “They have to have the same philosophy as us,” he says of his clientele.
Other safari operators hold different perspectives. Nicole Robinson, chief marketing officer of 30-year-old luxury safari outfit AndBeyond, believes that screening guests may be a self-defeating mission.
“There are two kinds of travellers,” she says. “The kind that travel to see the world and the kind that travel to connect with it. We’re for the second kind. However, travel can be a powerful catalyst for a mindset change – and by screening out guests you lose the opportunity to convert them.”
A Rising Tide
Ndlovu has found some enterprising allies in a few companies. One-year-old startup Niarra Travel, for instance, offers the same booking services as a travel agent for just a 10% commission.
“Our message to travellers is: 25% of your money is actuallygoing to reach the destination,” says founder Byron Thomas.
For Nicola Shepherd, founder of the U.K.-based Explorations Co., a philanthropically motivated travel planning organisation, most itinerariesfactor in some form of “giving back” through hands-on positive-impact initiatives such as collaring an elephant or lion so that it can be tracked by conservationists. (The cost runs from $5,000 to $15,000.) These experiences aren’t positive only for the environment but offer guests truly unique experiences. Shepherd’s clients are also automatically charged a charitable fee that is matched from the company’s profits. If clients aren’t interested in contributing, Shepard recommends they book their vacation elsewhere.
“We are, first and foremost, a philanthropic safari and travel company,” she says.
In central Kenya, Borana Lodge, an eight-cottage property in a 32,000-acre rhino sanctuary, is taking another approach entirely. Michael Dyer, its managing director and owner, is hoping to take more direct bookings that bypass agents. To do so, he’s building up a reservation department in-house and working with a Kenyan startup to create software that will help manage bookings and offer dynamic pricing. Dyer is confident that younger guests will come to prefer online bookings, but it all requires a marketing rethink.
For the complete article: http://www.bloomberg.com/news/articles/2021-07-15/post-covid-safari-companies-rethink-who-should-stay-at-their-lodges
By Mary Holland
