The National Association of Nigerian Travel Agencies (NANTA) has canvassed merger and consolidation of its members as parts of measure to ensure profitable in view of the unfavourable airline policies. This was revealed during a workshop organized for members of the association in Lagos.
According to Tinuke Nwakohu, who is the first deputy president the association, the workshop is expected to educate travel agencies on the advantages and benefit of consolidation to their operation.
She said, “The seminar is put together to let our members know that consolidation is not a bad idea to their sustainability of their business. Professionals all over the world are coming together in order to consolidate on their works. NANTA has noticed that there is no growth in the sector due to the capacity of the individual operators; particularly in this era of no commission. The agencies are suffering.
She said, “They cannot approach the airlines because the airlines will tell them, sorry, you are not selling us. Look at what our counterparts are doing in South Africa, in the UK and elsewhere and we realised that they are consolidating. In these countries smaller agencies are merging with bigger agencies to become stronger and together they talk with the airlines.
“But our agencies are scared of merger; you know the Nigerian factor. Some agencies will be asking, can I work with this agency? Not possible; they are bigger than me; they will swallow me up. But luckily, some agencies have come together and they are operating as one.
According to Nwakohu, some agencies in the country are afraid because of the feat that they may lose their identity in the event of any merger. The workshop will help to address their fear. She said, “We have informed them that they will not forfeit their licence, you are just working together for the benefit of the group. If you merge, you merge all your resources, all your volumes and in that way you are strong enough to actually speak with the airlines,” Nwakohu added.
Mr. Dele Adesina, a principle partner, at Dele Adesina and Co, charged the agencies to embrace consolidation because that is the only sure way they to sustain their business and make profits.
He noted that most of the travel agencies are on small scale with high probability of weak bargaining power with the airline operators. “Thus, the need for the movement of the industry towards consolidation into a number of “Mega-agencies” cannot be over emphasized.
“Mega-agency” will have the resources to set up large offices in prime locations and to establish small branch agencies that are run in coordination with the main offices,” Adesina said.
He said consolidation enables all the parties involved to bring together their expertise, equipment, ideas, human capital and other resources for a common goal and the size and resources being controlled gives the consolidated agencies business advantage to negotiate discount percentage with airline operators