Tourism Industry in Tanzania: Moustafa Khataw Gives An Overview of Travel Management Company Skylink Group

Interview with Moustafa Khataw, Managing Director of Skylink Group

What has been the impact of COVID, specifically to the tourism industry and then to your business as a whole?

In Tanzania, the tourism industry has been the hardest hit including the tour operators, travel agents, hoteliers, and those companies which are providing ancillary services to tourism like the souvenir market or restaurants. The whole impact has been quite huge in Tanzania. For my company, as such, we have been impacted very heavily. With tourism closed in the end of March, we were shut down for business for almost five months. In the meantime, what the government has been doing after the reopening of the airspace was encouraging a lot of domestic tourism which has, to a certain extent, been effective because the rates of the hotels have gone down tremendously during this period which geared up some local demand. In the recent months following the government’s decision to reopen the airspace, tourists arriving into Tanzania do not have to go through quarantine measures, only enhanced screening. You do not have to produce a PCR negative certificate unless the airline requires it. So, we have seen some growth of tourists. But from my experience and my recent visit to the northern parks, we are actually at only 10% of our capacity. There have been a lot of challenges in terms of tourism related point – we have been made redundant and companies have reduced the packaging for all in the tourist or in travel agency or in car rental. The recent report by the Central Bank showed that the proceeds from tourism have gone down by over 74%. That has been quite a challenge. Some of the hotels are still closed in Dar es Salaam as well as in the northern circuit. But from the Zanzibar side, we have had some positive news. A lot of tourists from Russia and Eastern European countries are arriving in Zanzibar by regular weekly charter flights and all the planes are coming full. I was in Zanzibar and witnessed myself the arrival of this plane which was full of Russian tourists. From the mainland side, we have airlines which are still not operating, like Swiss International Airlines. They decided to stop flights to Tanzania, pending loads factor of passengers, but KLM, Turkish, Emirates, Flydubai, Kenya Airways all have resumed their flights and they are coming at reduced frequencies. But at least there is some movement of tourists and a little bit of business related activities. The collapse of South African Airways has had a very huge impact on Tanzania. There have been no flights into Dar es Salaam. However, Airlink, which is a private airline from South Africa, started flying three times a week from December, which is a good point for us and for Tanzanians also because our country was never in lockdown. So, we have had the opportunity to travel but the only countries we are able to travel to are Kenya, Rwanda, South Africa, Dubai, Turkey, and America. The Far East is still locked down. Tanzanians cannot go to European countries because we cannot get visas at the moment. For America, people who have visas can go there, but the embassy here has still not resumed issuing visas. Tanzanians want to travel outside the country but we are restricted. But I am very optimistic for 2021 that tourists will start flowing in, especially with the vaccination which started in the UK and rolled over to America and other European countries that will give some confidence to the tourists to come to Tanzania. Tanzania is a safe place. We have been granted the World Travel and Tourism Council’s Safe Stamp. So, all the protocols are observed. Tourists feel very much at ease when they arrive in Tanzania to go on safari or Zanzibar for beach holidays.

With this impact, what kind of strategies are you going to put in place to bounce back fully into business operation?

I was appointed as Honorary Consul for the Slovak Republic in Tanzania. My appointment was confirmed but then COVID struck, so there has not been much potential during this period. However, the group plans to do some roadshows to the Slovak Republic to harness the opportunity of tourists from the Slovak Republic and other Eastern European countries to Tanzania. Last year, we had about 3,500 Slovaks visiting Tanzania and Zanzibar. Our plan is to double that figure to at least 7,000. So that will be quite a huge jump. The other strategy we are using is going to a more digital penetration in the sense that we would be doing a hybrid model, because when somebody wants to book a safari, just to book on a website portal and you get your booking vouchers would not sound interesting. We would be doing a hybrid of digital as well as a live person interaction discussing the safari, showing some video clips to the person who is far away to get the true essence of what he or she is going to experience in Tanzania. We have also partnered with travel specialists from California and we have signed up with one of the largest banks in Tanzania to start Tanzania and Zanzibar rewards. So, this effectively means to provide a digital platform for tourists coming into Tanzania to spend more by showing them the ad hoc additional services apart from what they booked from their respective countries before reaching Tanzania, and also providing them with a local SIM card in advance so that they know the number before they land, and they get a welcome pack when they arrive at the international airports. We expect to roll this out in the first quarter of 2021.

What are some of the challenges you faced from COVID and how did you overcome them?

We are the only ISO 39001 2015 certified travel management company in Tanzania. We have won the World Travel Awards for the fourth year in 2020. That gives a confidence that when somebody books, whether it is a safari, air travel, car rental, that company or person is assured of quality service at all times.

Until mid-March last year things were looking very, very upbeat and we were very happy and excited. But in mid-March, when COVID was announced in Tanzania, things just died. Cancellations were the order of the day. April was the first month in my 32 year career in the travel and tourism business that we had a flat zero income. So, you can imagine from a huge revenue stream, you just get cut down immediately. So that was very, very hurtful and painful. We met with our team, immediately we discussed the challenges we were having, and we put in place that initially we allowed the entire workforce to take their 2020 leave in advance with pay, of course. So, the entire staff was on leave apart from skeleton staff which worked remotely. We used to have Zoom calls with the entire team every week to reassure my staff of the support that the company is there and to enhance that feeling of belonging to the company, that we have not abandoned them just because of COVID. Domestic travel was never shut down in Tanzania, but of course, it went down to a very, very low scale. People were not willing to travel or were scared to travel. So, April was also flat. In May, we started a little bit of domestic travel, but international travel was closed. So, we had no international travel May and June until the government reopened the airspace. But the airlines were not flying in immediately. So, it took them time to reorganize, redo their risk assessments before they resumed. My business is 60% international travel, business travel, and 40% is a mixture of outbound travel as well as inbound tourism. 60% of international travelers were gone, 30% of tourism was gone, so my revenue stream remained at 10%, which covered the domestic travel and local tourism. Eventually, we had to discuss with the team and reduce our staffing in a very amicable way. And we agreed with the staff that should things change in 2021, we would bring them back onboard. The other thing which COVID has really given us was the opportunity to be able to work online from home. This also means a strategy of reducing our physical office footprints in the sense that we would have reduced office space from next year and would allow consultants to work from home which will also reduce our rental costs. By that, we would save the time to commute to work, they would be with their families, and of course with the digital tools in place, we are able to monitor and see how they are performing. Our main source market is the Americas and Europe. All those bookings which we have had have been either canceled for 2020 or postponed until 2021. But our agents and the tour operators we work with are also cautious. They are just waiting to see how they can convince their clients to consider traveling to Tanzania. We went through elections in October, and the President has just put in place the full new cabinet. So, we have a new Minister for Tourism and Natural Resources. We have a new Minister for Communication and Transport. So, we would be as a stakeholders, we would be engaging with them to see how we can support the Tanzania Tourist Board to promote Tanzania and participate in the international trade fairs, which we believe will resume from next year.

There are quite a number of travel and tour companies in Tanzania. What makes Skylink Group different from these other companies?

First of all, is the experience. We have been in business for 30 years in July 2021. I have spent 26 years running this company. We have been a stable company and we have evolved over time and grew from one location to six locations all over the country. We have on our portfolio two large diplomatic missions who we work with and we have our staff working in their offices; although, at the moment, they are working from the head office due to the COVID challenges. But that shows the confidence we have had in the market. We are the only ISO 39001 2015 certified travel management company in Tanzania. We have won the World Travel Awards for the fourth year in 2020. That gives a confidence that when somebody books, whether it is a safari, air travel, car rental, that company or person is assured of quality service at all times. We are one of the very few travel management companies who run two offices at the Dar es Salaam International Airport in Terminal 2 and 3 and they operate on a 24/7 basis. So, wherever you are in the world, at any time zone, if you call Skylink, you will reach a live person.

What are some of your success stories?

We have also diversified in the sense that we have an associated company called the Noesis Strategic Institute. That company is focusing on personal development, leadership, as well as quality service and training. We represent Service Quality Institute of the United States who are the leading gurus in quality service. We also represent Leadership from UK and my partner and his other team members are doing a fantastic job in creating a company culture of customer experience change in Tanzania. We have had the trainings conducted for a couple of banks, a pension fund, and at the moment, we are undertaking a project of revamping and enhancing personal leadership skills as well as customer experience services through one of the largest sugar manufacturing factories in the country. So, there is now also a need to encourage Tanzanians to learn leadership skills. The government is encouraging that local skills have to be enhanced and they take over top positions in the country. We have seen that major banks in the country are now led by local, indigenous Tanzanian CEOs. That is very exciting when you have a Tanzanian leading, including two international banks that now have Tanzanian CEOs. That is where our focus is now for this other company of how we can enhance that knowledge and pull up the potential candidates who want to grow in their businesses or in their employment.

Are you the only company providing those sorts of services in Tanzania? What are your major competitive advantages?

There are a lot of companies such as PwC, Deloitte, Nexia who also provide these consultancy services, but we build champions. So, what we do is when we go to the client’s place, it is not only training, it is building culture and building champions within that organization so that there is continuity in that organization. We build up champions who can continue to build this culture change for customer service experience. We have loyalty for life, our bad day campaign, speed, empowerment. These are some of the modules which we teach. And when we say loyalty, we mean, in order to solve the problem of the client when you lift that client from hell to heaven in 60 seconds with empowered decision making. If a customer gives a complaint you do not say, “I need to speak to my boss, I’ll come back to you.” But here is a culture change. We bend the rules without breaking them for the complete satisfaction of the client. Once you lose a client, getting that client back is very, very difficult. We have been undertaking such training for banks. And banks essentially, provide almost similar services. But the way the client is handled with hands on customer experience means that client stays for life. Recently, I was remitting for my credit card and they delayed it, so I got charged the penalty for the delay. I went to the bank and told them they had messed up. And eventually, it was in the premier banking section, the woman who was attending to me said they would reimburse me for that charge and that they would write to my credit card company that the delay was from the bank, not from me. So that is how immediate decision making becomes faster and people are empowered. If we do not empower people, the consultants of those who are on the frontline tend to get scared to make decisions that either they will be fired by the boss or their job would be at stake. In our office, we had an experience last year with a client who wanted to go to the Doma when the parliament session was there. So, hotels were very, very scarce. And we got one hotel, where we told him the hotel was not up to the standards he wanted. He insisted saying that he had to go. So, we booked the hotel, he went there, and when he came back, he complained. But he did not complain to me. He complained to my consultant. My consultant immediately said we would give him a credit for that one night hotel he paid for which he was not happy with. And it was not a small amount of money. It was about $80. But the guy who was a CEO called me, he said, “Mustafa, what are you doing? Are you sure? What are you doing? He says your consultant who booked my hotel gave me a credit for $80. You allow your people to make decisions? What if 10 of your people make those decisions every day? Look at how much money you’re going to lose!” I told him, this is a gesture that despite me telling you that the hotel is not up to the standard, you are not happy, but in order to provide reassurance that we are here to provide you that service and ensure continuity of your business support, the consultants are empowered. These are small things which are very, very critical now because digitalization has put us so far from our clients that the personal relationship, personal touch, holding hands is not there.

What is the vision for the company in the medium term, three years’ time? What is your personal ambition also?

The vision in the next three years is to expand our digital presence in the country and beyond. And my vision is to be the leading travel management company in Africa. The second thing is to grow our inbound tourism to make our revenue stream go at least to 60% tourism inbound and 40% corporate travel. That does not mean that our pie is shrinking, but rather we are going to build a new cake. We are not going to share the cake which is out there in the market. We are going to bake a new cake and provide that growth. Personally, with the appointment of my being the only consul for the Slovak Republic is to engage with both the governments to enhance cultural exchange, training, education because there are a lot of opportunities for Tanzanians to go to Slovakia and learn what is out there. I have been there already and it is the sixth largest economy in the EU. There is a lot which Tanzania can learn in dairy farming, winery, automotive, technology, and pharmaceuticals. I want to enhance relations between the two countries. And me being the Chairman of the Tanzania Society of Travel Agents and the President of the Association of Eastern and Southern Africa Travel Agents, which includes 11 countries in Sub Saharan Africa, excluding South Africa, is to bring these countries closer with a view of expanding domestic tourism and extending tourism within these countries. My vision is not to retire immediately but to continue running Skylink. But after three years when this project comes to fruition, my goal is to take a backseat and play an advisory role. We are already building capacity within the company for leadership to take over.

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