NDUSTRY experts say the
decline in the fortunes
of the oil industry – as
evidenced by the current low
price of crude oil – has led to
a decrease in the number of
corporate travel bookings into
Africa.
Tourvest Travel Services’
corporate travel bookings into
Africa have declined by more
than 30%, mainly due these
factors, says ceo, Morné du
Preez.
Vanessa Krook manager,
marketing, communications
and supplier relations of BCD
Travel, says its consulting
arm, Advito, can anticipate
a decrease of business
travel in Africa year on year,
compared with 2015.
According to Lee-Anne Bac,
director of Grant Thornton
Johannesburg, the slowdown
is related to both the oil
crisis as well as South
African companies that had
expansion plans in Africa
finding it hard to replicate
their business model on the
continent. For example, she
says, Shoprite which was
expanding rapidly into Africa
is now pulling out. Lee-Anne
says the oil crisis has had a
big impact on Mozambique,
Nigeria and Angola. “Just
look at those economies;
they are in huge difficulty.”
Wayne Troughton, ceo
Hospitality & Real Estate
Consulting at HTI Consulting,
says a lot of investments on
the continent are in limbo
because decisions cannot be
made when commodity prices
are too low. “In Angola, for
example, some of the oil
companies have actually
pulled out because, where
the oil price is now, it’s not
worth them exploring.”
Because of the drop in
demand, Wayne says hotel
occupancies in a lot of
African cities are at the
lower end of 50%. Some
hotel developments on the
continent will likely be put
on hold as a result of the
slowdown.
“If the oil price remains
at its current level, it will
have a long-term negative
impact on corporate travel
into Africa. Corporates
would have to change their
long-term cost structures to
continue operating with it at
the current level and I doubt
they’d be able to do that over
the remainder of the year,”
says Morné.
