Convincing travel companies to take less commission is a tall order, especially coming out of the pandemic. But Niarra Travel believes that getting more money into the hands of local communities requires bold steps and immediate action. The severe downturn in tourism revenue and its impact on Africa’s wildlife and communities means that the time is now.
Tourism in Africa suffered mightily during the Covid era as border closures and travel restrictions resulted in billions of lost revenue and contributed to wiping out a large number of jobs in the industry. The downturn in tourism to the continent has also posed a major threat to wildlife since many poachers have felt free to go to locations where they don’t have to worry about being spotted by tourists.
So tour operator Niarra Travel is challenging the travel industry to do more to strengthen communities in Africa, hoping to set precedent and create a model for others.
The London-based company is taking substantially less than other tour operators in commissions — 10 percent in Niarra’s case — that often chip away at profits which can be directed toward conservation and sustainability efforts.
Niarra is instead using the money that would have gone toward additional commission fees to help hotels and lodges pay for sustainability initiatives in their communities. The company’s practices could push other tour operators to adopt similar models, although some rivals have expressed doubt that they could follow in its footsteps.
“If we don’t support and invest in these communities, we may not even have these areas that the industry depends on in a few years’ time,” said Byron Thomas, Niarra’s founder.
“Challenging a business to take less commission is not the easiest pill to swallow. However, the reasons behind it is something that most people in the industry can see and understand.”
How to Get More Money to Communities
Many travelers going to Africa — especially on safari trips — use travel agents to help simplify planning their excursions, and safari companies typically pay for the agents’ services through commissions as without the agents, tour operators generally have a more difficult time generating leads through marketing. An agent’s referral, in some cases, can represent as much as 40 percent of the trip cost, leaving the remainder for companies to cover expenses such as labor, operations and upkeep.
“When you look at commissions globally, Africa is by far the most lucrative in how it is set up. (It) can attract elements that are simply there for profit,” Thomas said.
But what steps can companies take to ensure that large amounts of tourism dollars — the United Nations Environmental Program has reported that just $5 out of every $100 spent in a developing country stayed in that destination — are not leaking out to intermediaries?
Thomas recommends that the booking channel be shortened, adding that even after a travel agent contacts an international tour operator, the process for booking trips to Africa can include several more steps — such as having to reach out to international wholesalers, destination management companies and accommodation providers.
Furthermore, he said Niarra always tries to contact properties directly to ask how money that would have gone toward commissions can be invested, adding hotels and lodges often ask the company to take the funds and donate into their foundations.
“Our preference is always that the money goes back to the property so that they are pushed into action at their end,” Thomas said.
Getting more money into the hands of local communities would go a long way in helping Niarra accomplish its goals. But how long can the company keep operating with a 10 percent commission?
“It’s a viable business model,” Thomas said about his company, which he expects to hit $5.4 million in sales (4 million pounds) this year. He added Niarra hopes to double that figure in 2023.
“If we meet our targets, we will keep going. And at this time, we have no intention of changing our commitment to this structure.”
Obstacles to Niarra’s Goals
Thomas admits his business model presents several risks for Niarra, the first of which he said is that his company makes much less margin than other tour operators. In addition, despite an increasing desire among many people to travel more sustainably, he said Niarra needs buy-in from prospective guests leery about greenwashing due to hearing constant claims about sustainability.
And despite Thomas’s belief that tour operators and travel agents that conduct business in Africa are facing increased pressure to reduce commission fees and invest more in communities, it’s uncertain that other companies can adopt a 10 percent commission.
“Each party in that (tourism supply) chain has a different nature of costs,” said Nicole Robinson, the chief marketing officer of luxury safari company AndBeyond, adding it couldn’t take a 10 percent commission like Niarra does because AndBeyond occupies several places on the distribution chain, including being a lodge operator, a destination marketing company and an online retailer.
“You need partners in the chain to perhaps guide or convince people you can’t actually meet yourself. And that’s what you pay a commission for.”
Thomas acknowledged that trying to spark a major change in the travel industry is challenging. “Yes, this is undeniably ruffling some feathers,” he said when asked if executives would be unhappy about a possible trend of less commission money.
“But on the whole, we are all looking at what we can do to improve and change is never easy. Our model puts pressure on people to clearly define their value in the booking channel.”
Nevertheless, Thomas has expressed optimism Niarra’s model can gain a greater foothold throughout Africa as numerous destinations and companies are reassessing their commission structures. The founder of one safari lounge who has committed to reducing commission said he doesn’t know about any other industry that gives away so much from its bottom line. Although many properties Niarra works with are shocked the company only wants a 10 percent commission, he’s confident major changes in the travel industry are afoot.
“The reaction has, at times, been emotional as the realization of what a shift like this could mean,” Thomas said.
“We hope that through our success we can give lodges and hotels the confidence to stand their ground the next tie they are being squeezed in a commissions negotiation with an agent or operator.”