It has become almost cliche to talk about partnerships being the foundation of businesses. While I'll testify that it's true, it needs to be done in the right spirit. Former South Africa president Nelson Mandela understood this and embraced ubuntu, an ancient African philosophy that, simply put, means "I am because of you, you are because of me, we are who we are through each other."
Using this as a framework, I would urge my colleagues in the luxury adventure travel industry, both advisors and properties wherever they may be, to take a step back and review what "being a fair partner" really means.
I'm proud of the legacy I'm leaving. Much has changed for the better in the safari business over the past four decades, but one has to ask: is it enough?
Dating back to the early 1980s, the backstory to the partnership between lodges and the travel trade went something like this: Access to these remote places was challenging; communications were by telex or fax; stitching journeys together across multiple destinations and countries was perplexing; and travelers relied on their travel agent for facts about where they would be going, choices offered and possible bumps along the way.
To overcome this, the market split into four clearly differentiated sectors: the upscale travel agent, the outbound destination wholesaler, the inbound destination expert and finally, at the bottom of the chain, the safari lodge. To ensure everyone in the chain received their due, the lodges gave 30% margin from their rack rates, or often more. We all needed each other, and the partnerships were strong.
A 21st century shift
It began to unravel as we headed into to the 21st century. This was due to two factors: The lodges simply couldn't make ends meet on these steep margins (in addition, lodges pay 14% to 16% value-added tax plus tourism levies), and the World Wide Web opened the doors to easily accessible information.
The accepted commission structure globally for luxury hotels is 10%, and most do not include all meals, drinks and up to 12 hours a day of guided safaris. Partnerships started to become more and more strained as the years progressed, with the lodges wanting to trim margins and the travel distribution chain putting pressure on them for considering it.
There also ensued the battle of "who owns the guest." To be frank, it is a ridiculous argument, as we all know nobody owns the guest. Our guests would be offended to think that they were considered "owned" by any one company. Threats of blacklisting were made to any lodge considering "going direct." But this resulted in making lodge owners even more determined to take ownership of access to markets by launching efficient websites, garnering media coverage independent of the travel trade and launching their own boutique travel desks.
As the market disintermediated with travel agents becoming African experts and African wholesalers becoming retailers, lodges increasingly heard, "I can't do business with you for less than 25% to 30% margin" from the wholesaler-turned-retailer -- and, similarly, 15% to 25% for the retailers. What ever happened to 10% being a fair margin for a B2C fully inclusive transaction? On being told by an African wholesaler that X lodge gave him 40% (so would I consider that), I replied by asking what was that property's rack rate? $300 was the answer. My rate at the time was $1,200, and I was offering 30%. "Do you bank percentage points or dollars?" I asked. "That is not the point" was the answer.
Another quote I hope never to hear as a lodge owner again is, "We like selling Africa because we make the most money on these trips."
As in all industry sectors, we need each other. Nelson Mandela had it right: ubuntu. My plea to travel partners who sell Africa is to strive in seeking solutions that are fair to both parties to build a strong, transparent and trusting partnership. Imagine the good that will flow from that, for the agents, the properties, the communities, the habitat and the wildlife. A less fragmented and more cost-efficient partnership would enable properties to reinvest in the underlying guest experience and pay more for the right to be where they are. Only if conservation can prove itself as the most lucrative land use will these wilderness destinations survive. If lodges are unable to survive, what is there left to sell?
As I retire from this remarkable industry, I am grateful to Travel Weekly for giving me this opportunity to connect with our travel partners, encourage them to deepen partnerships with their preferred properties, to work hand in hand sending travelers to Africa and beyond, and to thank them for all their support in encouraging their clients to visit destinations where every tourist dollar leaves a significant impact.
Nicky Fitzgerald co-founded Halcyon Hotels and established safari lodges for AndBeyond. She and her husband, Steve, opened Angama Mara in Kenya in 2015.
