Conversational commerce, seamless experience are key to innovation in South Africa’s travel space

Globally, the travel industry has come back in force in the post-pandemic era, with global travel publication, Skift, citing 2023 as the year the industry has truly fully recovered.

According to Mastercard Services in their recent travel outlook, global leisure travel remains robust (up roughly 31% in March 2023, compared to the same period in 2019), representing a 25% year-over-year-to-date change from 2022 to 2023. Commercial and corporate travel, driven primarily by back-to-office initiatives, is also up YTD.

One indicator of this continued growth is the idea that, despite the challenging economic climate, consumers globally continue to prioritise travel and experiences over things. Travellers are increasingly seeking unique experiences in destinations across the world, with spending on experiences up 65%, while spending on things is up only 12%, compared to 2019 as of March 2023.

In South Africa, both inbound tourism and local travel are also seeing positive growth. South Africa’s Minister of Tourism, Patricia De Lille, shared that more than 5.8 million people visited South Africa last year. The country’s travel sector is expected to continue growing at an annual rate of 7.6%.

One reason for the influx of local tourists is that online payments have made it easier and more convenient for visitors to book flights, accommodation and other travel arrangements. In addition, access to new payment options like Buy Now Pay Later and incentives like travel rewards are encouraging even the more budget-conscious to venture.

As Lee-Anne Singer, chairperson of the Federated Hotels Association of South Africa (Fedhasa) in the Cape, said: “Visitors this year spent more than R25 billion, and it looks like that number will only continue to increase. Having a safe and convenient digital payments infrastructure is a key part of that growth.”

However, with the rise in travel — both domestic and international — comes higher expectations from consumers in terms of offering, support, and the checkout experience. One significant way for travel booking sites and platforms to differentiate themselves in an increasingly competitive environment is to optimise and innovate at the critical point of payment.

We spoke with two leading South African businesses — FlySafair and Cullinan Holdings — for their take on what’s next in the local travel industry, how they continue to meet changing consumer demands, and what’s required to ensure a seamless booking experience.

How Cullinan Holdings remains nimble and agile after over 40 years operating in the travel space

Known for its well-loved collection of travel brands, including Pentravel, Thompsons Holidays, Springbok Atlas and many more, Cullinan Holdings is steeped in rich South African heritage. Originally founded in the 1920s, the firm began as a mining company (named for the Cullinan Diamond) and later developed into the holding company they are today. Cullinan is owned by The Travel Corporation, which was initially founded by the Tollman family.

Today, Thompson’s Holidays — one of South Africa’s oldest travel agencies, founded over 40 years ago — is a massive operation. The firm holds an exclusive agreement in South Africa to sell Disneyland and Disney World travel. Thompson’s Travel has developed as a separate division focussing on corporate and business travel as a travel management facilitator for many large organisations.

According to Carlien Parsons, Group Online Strategic Director at Cullinan Holdings, the firm underwent a complete digital transformation starting in 2016, enabling formerly manual or analog processes to better meet demand from consumers. Today, Carlien’s role is to work with the respective CEOs of each division within the firm and execute their business strategy from a digital perspective.

“All divisions have their own CEOs and business objectives,” Carlien shared. While supported by a large organisation, one of the reasons Cullinan’s individual brands have been able to remain agile and innovative is that structurally they all operate fairly independently. “[The divisions] all have different business models and client bases, and they have the freedom to follow the strategy that makes sense for their business. What would work for coaches, for example, wouldn’t work for Pentravel, and vice versa. This way, we have a lot of flexibility.”

The pandemic slowdown presented an opportunity to improve processes and the travel booking experience.  

During the pandemic, the firm was able to pause and look at ways they could improve their customer experience. At Pentravel specifically, one major shift they noticed was that their customers increasingly wanted to interact with them via mobile. “We saw that customers wanted to use their chat channels. As a result, we made a massive shift in 2020, and really doubled down on our chat customer service and flows,” Carlien said.

Today, these social chat channels are overtaking traditional web channels from a revenue perspective. “We’ve seen the world of conversational commerce blow up quite a bit, and this is where we see the future — specifically for the South African consumer.”

This trend mirrors the increasing demand for convenient digital payments, such as payment links. “For South Africans, WhatsApp is massive. We see that our customers are very comfortable transacting in their chat channels. We started just fulfilling the garden-variety customer service through chat. But now, we send payment links and booking confirmations through chat. The conversion rate is phenomenal compared to traditional email channels.”

The team has reorganised their online customer support to match these behaviours, recognising the need for high-touch contact due to the custom nature of their packages. “The chat side has provided ease of booking and removed any customer pain; that’s where we see the industry going — not only in travel but across the board.”

The future of travel is centred around a friction-free customer journey

According to Carlien, the goal for the future is all about removing friction across the customer journey. In terms of payments, she sees more seamless methods like Apple Pay and one-click payments gaining traction.

“Where we sit from a customer experience perspective, we want to be frictionless. We want to make it super easy to pay. Travel is one of the most complex things, especially for South Africans. You can hardly go anywhere without having to get a visa, for example. Then there are flights and exchange rates to think about — there are so many things to juggle.”

The booking process should minimise, not contribute to, that complexity.

Enabling a seamless experience is where companies like Pentravel or Thompson’s Holidays differentiate themselves. “Across our business, we always look for ways to make it easier for people to do business with us. We know that it’s complex, and we want to make it frictionless — it must be.”

How FlySafair stands out as competition grows in the budget travel space

While firms like Cullinan Holdings are finding ways to reduce friction across the travel booking journey, one critical piece of most trips that can impact the overall experience is the flight.

According to South Africa’s Minister of Tourism, Patricia De Lille, domestic overnight trips exceeded pre-pandemic levels as well as 2022 levels by 41% in the first quarter of 2023, showing promising growth. One of the best-known local airlines facilitating this growth is FlySafair.

FlySafair initially launched in 1965, not as a commercial airline but offering a wide range of specialist airlift services. They boasted the largest privately owned fleet of Hercules L100-30s and shipped cargo for businesses all over the world, including for purposes of humanitarian aid and relief. In fact, The first wheeled landings on Antarctica were done by a Safair Commercial Hercules.

In 2014, the firm moved into the commercial aviation space, now operating a fleet of 34, taking 160+ flights per day, and is the largest domestic airline in South Africa.

According to Kirby Gordon, Chief Marketing Officer at FlySafair, as a low-cost carrier, the aim of the company is to make air travel accessible to more South Africans through affordable fares, connecting them to who and what they love. “We are a people company that flies aircraft, not an aircraft company that flies people,” Kirby said.

“In South Africa, we firmly believe that air travel is a commodity at the end of the day. From a loyalty perspective, it’s all about great service and getting our customers to their destinations safely and on time.”

The airline competes on pricing, On-Time-Performance (OTP) and offering a variety of flight options. But where they believe they really stand out is the FlySafair app. “The app has gone through a lot of iterations in the last 12 months. The idea was to make it a travel partner or companion. We want to make flying hassle-free and easy. Today, customers can load their boarding pass, book flights and more on the app.”

To book a flight, most customers go onto the FlySafair app or website, select their route, enter their details and complete payment. In terms of payment options, according to Kirby, paying by card is still king in South Africa, though customers are demanding more options including Pay by bank and cash. “A lot of bookings actually take place at the airport counter,” Kirby said, estimating that 5-8% of the firm’s bookings take place in person with cash.

Much like the Cullinan group, the team at FlySafair has also picked up on consumer preferences to receive support and even make payments via digital chat. “WhatsApp is big for us. We put a lot of time and effort into that from a customer experience perspective and have recently added WhatsApp Pay."

Choosing the right payments platform for a seamless travel customer experience

Consumers purchasing leisure or business travel today are often spoiled with choice. When it comes to choosing the right platform for their booking, convenience, trusted support and a friction-free experience are key.

At Stitch, we’ve custom-crafted a payment experience for clients in the travel space that offers their customers a choice of payment methods. From one-click checkout for frequent flyers to cash at the till or ATM that can help businesses expand reach, these options reduce steps in the payment flow to make checkout as friction-free as possible. This captures customers as soon as they are ready to make their booking.

For enterprise organisations with complex payment needs, Stitch offers a comprehensive payment orchestration and billing solution that can help them better manage and reconcile payments across multiple methods and providers, as well as divisions and geographies.