In 2019, tourism was a global powerhouse, accounting for 10% of GDP, or roughly $9 trillion.[1] After weathering the pandemic storm, we expect 2023 figures to show a full recovery to pre-COVID levels, in line with data from leading travel platforms and the World Bank.[2] But the story doesn’t end there. A transformative shift is underway, fuelled by evolving consumer preferences and habits, which could push tourism spending even higher to $13 trillion by 2030.[3] Amidst this dynamic landscape, the travel tech sector is witnessing noteworthy developments. Online Travel Agencies (OTAs) are still capitalising on the shift from traditional to digital platforms, gaining a greater share of the travel and tourism market. In more developed markets, OTAs are increasingly focusing on improving the user experience by leveraging generative AI. Companies such as Wego, MakeMyTrip, and compete and dominate in the Middle East and Asian markets. At the forefront, Expedia and, major industry players, collectively command 60% of all travel bookings in the United States and Europe. This emphasis on technology underscores the industry’s commitment to innovation and adaptation in the evolving realm of travel.[4]

While major travel companies recognise the growth potential in emerging markets like Latin America in their annual reports, the African tourism sector remains relatively underdeveloped and is seldom acknowledged. Nevertheless, Africa presents a considerable opportunity for local online travel agencies (OTAs) to establish extensive inventories on the continent, a feat challenging for non-African entities like Booking and Expedia. Additionally, there are substantial prospects for businesses that serve as facilitators or catalysts, aiding hotels, restaurants, and leisure operators in establishing an online presence.

The current state of global travel

The global travel industry has emerged from the shadow of the COVID-19 pandemic, with several overarching trends boding well for the industry. Online travel titans and Expedia have reported revenue figures that exceed their pre-pandemic figures as people prioritise travel after prolonged lockdowns and travel restrictions.[5]

The industry’s strong resurgence also comes from a broader shift in consumer preferences that value experiences over material possessions. This shift will continue to serve as a favourable tailwind propelling the growth of Online Travel Agencies (OTAs) in 2024 and beyond.[6]

OTAs have generally benefited from the ongoing transition from offline to online travel bookings, especially in North America, Western Europe, and parts of Asia, where internet penetration is ubiquitous. However, OTAs in these markets face fierce competition, particularly from metasearch players like Google. According to research by Morgan Stanley, 38% of travellers initiate their travel search on Google, compared to 16% and 15% who turn to Expedia and, respectively.

Faced with formidable competition, OTAs are deploying strategic investments in areas poised to redefine the traveller’s experience. These investments aim to enhance customer services, boost conversion and booking rates through their platforms, and increase the lifetime value of their customers.

Curated trips and Gen AI disruption

Leading travel platforms like are transforming into comprehensive trip-planning hubs, covering flights, accommodations, dining, car rentals, and activities. This shift towards “connected trips” is aimed at enhancing customer service and boosting retention and conversion rates, a trend also pursued by Expedia and on a global scale. emphasises AI’s role in curated trips as a key strategy in its annual report.[7]

Generative AI, particularly AI-powered chatbots, plays a pivotal role in this concept. These chatbots, considering factors like budget and preferences, streamline the process of creating personalised itineraries. Currently, 20% of Google Bard users utilise AI chatbots for travel planning, with this number expected to rise as technology matures.

Expedia and use OpenAI-powered language models for chatbots, but the current implementations lack the capability to book personalised trips. Despite this, these industry leaders can leverage their expertise and data to develop custom chatbots surpassing existing solutions, ensuring customer loyalty and repeated platform usage.

Mondee, an Austin-based travel tech company, has emerged as a major player, embedding Gen AI at the core of its travel marketplace. With partnerships spanning over 500 airlines and over one million hotel and accommodation providers, Mondee’s AI assistant, Abhi, guides users through a chatbot interface, seamlessly recommending flights, hotels, activities, and car rentals.

US-based Mindtrip is developing a trip-planning and booking app powered by generative AI that essentially acts as an AI-powered travel agent. The AI agent interacts directly with customers through a chatbot-style interface, suggesting activities based on prompts and creating entire travel itineraries. In late 2023, the start-up raised $7 million in seed funding from Costanoa Ventures.[8]

London-based Holibob offers a white-label B2B service that assists operators and travel brands in providing their customers with tailored activities and experiences via a chatbot interface. The company serves partners like Kayak and Amadeus with curated tours and activities inventory, helping them strengthen customer relationships and increase revenues. Holibob raised $12 million in mid-2022.[9]

Over in Germany, Layla is developing a similar proposition, offering travellers an AI-driven holiday planning experience. Users can converse with Layla, an AI-travel bot on Instagram, to discuss and discover information on destinations, weather conditions, ideal travel times, and activity suggestions. Layla also presents users with videos from various creators, providing an alternative perspective on exploring different places. The company raised €3 million recently from celebrities like Paris Hilton and other investors.[10]

The move to integrating AI extends beyond North America or Western Europe, as evidenced by players like Eddy Travels in Lithuania, Yoda Trip in Korea, and Ava Intelligence in Japan. As the industry progresses, it may make strategic sense for some of the larger OTAs to consider acquiring these innovative companies and seamlessly integrate their offerings into their platforms. By capitalising on their data advantage and direct inventory connections, these acquisitions could transform the travel planning experience for millions of travellers. The Amex GBT acquisition of Claire (now 30secondstofly) in 2020 in the corporate travel space is a compelling example of this approach in action.[11]

Why we see Africa as a significant opportunity

The case for online travel in Africa aligns with many global themes driving the online travel industry, such as increased efficiency and greater choice. However, Africa also holds unique advantages that make it an exceptionally promising market for tech companies operating in this space.

In the past three decades, Africa has experienced a remarkable surge in its middle-class population, which has now surpassed 300 million people – a threefold increase.[12] This burgeoning middle class has the means and desire to explore their own continent and the wider world and is poised to drive significant growth in the demand for travel services. The continent’s growing and increasingly globally minded young population will further strengthen this demand. Many countries boast a median age below 20, and populations are skyrocketing. The 2020s will see the arrival of 450 million new Africans, and by the 2040s, this number is projected to reach 550 million, constituting 40% of all global births.[13]

The transition from offline to online is another pivotal accelerator worth noting. While online travel booking has made substantial headway worldwide, Africa still trails behind. Only 30% of travel bookings in the Middle East and Africa occur online, falling short of the global average of 50%.[14] This gap presents a significant opportunity. While Internet penetration in Africa stands at 36%, programmes like the World Bank’s Digital Economy Initiative for Africa will enhance Internet accessibility in the coming decade. At the same time, an ever-younger and more tech-savvy population will drive demand for online travel services.[15] Companies facilitating the transition from offline to online travel are well-positioned to harness this immense growth potential.

Technology companies enabling travel in Africa

The opportunities in Africa’s travel industry are partly due to its unique landscape characterised by its nascent and fragmented travel market. Within this dynamic environment, two primary categories of technology companies have emerged: companies focused on aggregating inventory (OTAs) and a newer cohort dedicated to providing the digital infrastructure required to bring travel and tourism businesses online.

One common thread connecting these categories is payment processing, a pivotal component for enterprise software providers as they facilitate the transition to online operations. OTAs are venturing into the payments arena, aiming to capture transaction revenue while enhancing the user experience through a more seamless booking process. This trend extends beyond Africa and is evident globally, as the annual report highlights.[16]

Online Travel Agencies & Booking Platforms

Wakanow is a travel booking app focused on the West African market. It operates under multiple brands, caters to diverse consumer segments, and stands out as a multi-GDS (Global Distribution System) provider, earning several accolades, including from Delta and United Airlines. The company raised $40 million in 2018 from The Carlyle Group.[17]

South African-based Travelstart is Africa’s largest online travel agency group, offering flights, hotel bookings, car rentals, vacation packages, and other travel services through its online booking engine. The acquisition of Club Travel, a corporate and leisure OTA in 2019, further bolstered the company’s position, allowing it to evolve into a full-service travel conglomerate.[18]

Kenyan company Tripitaca operates on a smaller scale than Wakanow & Travelstart, focusing uniquely on accommodations and experiences rather than flights. The company primarily serves its domestic market in Kenya, operating via an Airbnb-style platform and offering an instalment payment option.

Enabling the shift from offline to online

UK-based Direx serves African tourism and hospitality businesses with a comprehensive suite of operating solutions. This includes multi-currency payment and booking systems, a platform for managing back-office activities, and website development tools.

With operations in Uganda and Nigeria, Tripesa specialises in enterprise software solutions for tour and travel operators, individual hotels, restaurants, and airlines. The company’s products span website development, booking and Enterprise Resource Planning (ERP) platforms, and multi-currency online payment capabilities.

Companies like Direx and Tripesa are critical enablers of the shift from offline to online. They are well-positioned to get a firm foothold at the heart of the continent’s digitising travel industry.

What’s coming next in travel tech?

The global travel industry has recovered to pre-COVID levels and offers intriguing prospects for 2024 and beyond. Globally, there’s a growing consumer trend of prioritising experiences over material possessions, which could see travel’s share of GDP grow even further, especially considering rising incomes in emerging markets.

In the African market, tech companies are addressing what we refer to as “first-layer challenges.” These encompass optimising intracontinental travel, facilitating the online expansion of businesses, and broadening inventory to strengthen the network. In developed markets, these foundational issues have largely been resolved. Nevertheless, given the rapid progress in overcoming these challenges in Africa, the increasing tech proficiency among a burgeoning younger demographic, and the trends observed in other emerging markets, we anticipate the preferences of African travellers will swiftly converge with the global trend toward curated, end-to-end travel experiences.

Africa’s next generation of travel technology companies will reap the benefits from an ever-expanding data pool as the offline-to-online transition gains momentum. Their primary focus will be to create refined digital travel products powered by artificial intelligence, all with the singular aim of enhancing the user experience to new heights.

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