The travel and tourism industry is an enjoyable and rewarding sector of any economy in the world. With a good business plan, potential investors in travel related businesses can succeed in this exciting field of trade.
Nevertheless, irrespective of the lucrative look of the industry, Kola Anigioro, the Managing Director/Chief Executive Officer of Sky Guide Travels & Tours Limited, said beyond a good business plan, those who really want to succeed in travel and tourism business, must to be fully committed to the business and must genuinely be interested in providing services to people.
In an exclusive interview with FinIntell, Mr. Anigioro further shares his thoughts and experience in the travel and tourism business, and what potential investors need to know before setting up such business.
Of all business opportunities in Nigeria, why did you choose travel and tourism business?
In my 15 years of career building, I noticed that a lot of Nigerians love taking out time away from work. I observed that Nigerians love travelling. There is no continent that you will go in this world that you will not find a Nigerian.
I also discovered that travel and tourism is an evolving industry, and with our population, I knew that opportunities abound in the sector. In 2011, I also got an eye-opener when I read a report, by the regulatory bodies –i.e. the International Air Transport Association (IATA) and the National Association of Nigeria Travel Agencies (NANTA) – that Nigeria earned about ₦50 billion in the travel and tourism sector.
I was still a branch manager at Ecobank, while I was doing my study of the sector. The branch I headed, located on the arrival lounge of an international airport, further gave me privilege to see the opportunities in travel business. Those days, kidnapping cases were so rampant, and one would, ordinarily, expect that there would be some levels of reduction in the influx rate of expatriates into the country. But that was not the case as more expatriates were seen coming into the country daily, in large number. I deduced from that experience that Nigeria is a blessed nation because there is money in any sector of the economy. All I needed to do was to look for where to pitch my tent.
So, I did my feasibility studies and I made up my mind that this is the industry to belong. If you go to the embassies, you will see crowd of people planning to travel out of the country. A larger percentage of those people need the services of travel agents. I chose this business because I love the service industry. It gives you the opportunity to continue to provide service for people because the business, itself, involves continuous patronage.
Coming from a banking background, one would have thought that you will pitch your tent in banking related services?
Banking is good. But when you do banking to a level, say for about 15-20 years, you will want to do some other things. Yes, I also have interest in micro-finance banking, but I operate in the directorate level.
How has travel and tourism business fared, generally, in terms of its challenges and rewards?
The business has its own advantages and disadvantages, just like every other business. The major challenge I would like to mention is the issue of non-professionals in the business. I called them non-professionals because they are neither trained nor registered with the National Association of Nigeria Travel Agencies (NANTA). And because they are not trained, they are creating serious damage in the industry. These are the people that will promise clients that if they give them ₦1 million, or more, they can get them guaranteed visa of any country of their choice. I have had cases of clients that were defrauded. These non-professional agents don’t have genuine offices.
The truth is, there is nobody that can guarantee you visa. The only authority that issue visa is the embassy, through the consulate officers. We tell our clients that we can only assist them by giving them professional advice in their visa applications. We don’t do document for people, and we encourage them to be truthful in documentation. Even though we have good working relationships with embassies around here –some consulates have even taken us to their countries for trainings –still, we don’t promise guaranteed visas.
However, to the glory of God, there is no week that we don’t push up applications to embassies. We do about 40 to 50 applications monthly. In the South African embassy alone, we push up to ten applications a week. And as at today, we have not experienced any rejection. We have pushed so many applications to the United States of America embassy too and we had success stories. I tell people, the US visa is about the easiest because you will not be asked questions outside what you have filled in their form.
The good part of the business is that genuine travel agents are assisting the travelling populace in getting so many things right. If you are going on a trip, for instance, a travel agent will plan the trip together with you so that you can get the best option and also control cost. Legitimate travel agents are now sanitising and creating an enviable decorum in the industry, to the advantage of clients.
Recently, the United Kingdom (UK) announced that some Commonwealth countries, including Nigeria, will be asked to pay a £3,000 cash bond in return for 6 month visitor visas. As a travel agent, what is your opinion on the proposed bond?
Some parliament members, in the UK, are already against the bond because the kinds of businesses the affected countries do with the UK do not warrant bonds. However, what is certain is that, either the proposed bond sees the light of the day or not, applicants will still be assessed on their economic and social status before visa will be granted. The bond is not an automatic means of getting visa because the £3,000 does not mean anything to some desperate people.
What should those who want to start or invest in this kind of business be looking out for?
For investors, this is not a business you can do as a part-time because it is a bit expensive. You must have genuine interest before setting up this kind of business. Travel agency is not a business you can start with ₦1 million shareholding structure. According to IATA’s regulation, the registration requirement involves ₦30 million shareholding structure as well as ₦10 million bank guarantee. And before any bank will give you a ₦10 million bank guarantee, you must give them about 120% equivalent.
Also, before IATA will certify you as an agent, your facility will be inspected. You are expected to have some basic operational requirement in place for the business to run smoothly. They will also look at your staffing capacity, information communication technology facility, audited accounts, etc.
When you finally get an IATA certification, you will now establish relationships with the various airlines available so that you can have the right to sell tickets. To establish these relationships, however, you also need about ₦20-30 million bank guarantee. That is why I said this business is not a business that can be done on a part-time basis. It is a business that one must be available to give direction and ensure each staff is doing his or her work. The account department, in this kind of business, must also be solid, manned by a chartered accountant.
Meanwhile, due to the cost implication of registration, there are so many agents who cannot set up the business in full. So, they act as sub-agents in the industry to the IATA certified ones, and they assist in selling airline tickets.
In my opinion, if the regulatory agencies really want people, with genuine interest, to register, the high cost of registration must be reviewed. Although, IATA is an international organisations, which may not necessarily review its rules because of a country, but the Nigerian government can provide a succor for practitioners in the industry.
How does the advent of online booking/payment platforms, which is giving customers the book-it-yourself options on the internet, affecting your business turnover?
There are three basic ways to get a ticket. You can buy at the airport, buy online or buy through an agent.
To some extent, the online booking payment option has an impact on the business. But a lot of people are also skeptical about online transactions. So, there are many clients who still prefer that travel agents handle their bookings for them. It is also somewhat cheaper buying through an agent than buying at the airport. An agent can also use his or her money to book for a trusted client in a situation where the client could not transfer money to the agent immediately.
With so much work to do, how do you create time to relax?
In a service industry like ours, we don’t go on holiday. However, whenever we organise special foreign trips for clients, we use those opportunities to relax on the job.