Secret weapon to reviving tourism industry
The local tourism industry exceeded expectations
in 2007. Arrivals crossed the 1.5 million mark, raking in close to
$1bn and contributing 15 per cent of the country’s GDP.
Domestic tourism grew at a remarkable 45 per cent, the best
sub-sector performance, accounting for a fu ll
26.9 per cent of total earnings. But with the post-election
violence, massive cancellation of bookings saw earnings drop up to
90 per cent. Efforts under way to reverse this trend are bearing
fruit, but there is a secret weapon that we have yet to fully draw:
Kenya Airways.
Traditionally, global airlines expect to reap the benefits once
tourism takes off, but a new model in emerging where an airline uses
routing and other incentives to drive tourism. An example is
Emirates.
The business model of the airline is tightly intertwined with
Dubai’s tourism industry. Central to this strategy is making transit
extremely tantalising. The number of passengers passing through
Dubai International Airport stood at more than 25 million in 2006
and is expected to reach 65 million by 2010.
Lucky chip
Tourist arrivals staying for at least one night exceeded eight
million in 2006, and are expected to reach 10 million by 2011.
Emirates, in turn, plans to capture 70 per cent of the flights
through the airport by 2010.
The city and the airline have grown in tandem. Emirates has enjoyed
a 25 per cent annual growth rate since inception in 1985 and made
history in 2003 by placing the largest carrier order in history —
$19 billion for 71 new aircraft.
What does all this have to do with us? Since, “the world connects in
Nairobi”, massive numbers of potential tourists are already
shuttling through. The trick is to entice them beyond the airport.
Then, it’s easier to get them to stay one night or one week or two.
It’s often as easy as a visa waiver or an innovative hotel package.
But at the point of booking, when presented with options, the
traveller must choose Kenya Airways. Three strategies helped
Emirates. First, branding. Emirates directs $300m annually in brand
building, 50 per cent of that in advertising.
Second, is ample financing from diversified sources, from commercial
and Islamic funding to export credit finance with a full 40 per cent
from operating leases. Third, is investment in globally-trained
personnel, offering impeccable service. With the open-sky treaty
between the US and Kenya, KQ has a golden opportunity. Kenya already
has a lucky chip in the transit hub that is Nairobi. All we have to
do now is cash it in.
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