By Joel Bronkowski, Paystack Country Lead, South Africa
As is the case with so many industries, South Africa’s tourism and hospitality sectors were hit hard by the COVID-19 pandemic. But unlike some other sectors, the post-pandemic recovery hasn’t been as smooth as many industry players would have liked.
Internal factors – such as the 2021 riots and the devastating 2022 KZN floods – have dampened recovery, but so have external pressures. A global inflationary environment, along with substantial increases in energy and fuel prices, have all contributed too, especially given South Africa’s distance from some of its biggest traditional visitor markets.
As the sector looks to drive recovery, it’ll need to do everything it can to provide the best possible experience for prospective visitors to the country. Fortunately, the right tech, applied in the right ways, can go a long way to providing those enhanced experiences.
On the road to recovery
Before looking at why those experiences are so important and how tech can help provide them, it’s worth providing some context around the South African hospitality sector’s post-Covid recovery. In 2022, the country welcomed some 5.7 million international visitors. That represented a 152% increase on the previous year’s numbers (when travel restrictions were still in place across the globe). While those aren’t quite 2019 numbers, they do show that the sector is well on its way to recovery.
There are other green shoots that are beginning to appear. Earlier this month, it was revealed that international arrivals at Cape Town International Airport are back up at pre-pandemic levels. There have also been numerous new route announcements in recent years, with Lufthansa’s Frankfurt to Mbombela Kruger National Park (KNP) and Delta’s Cape Town to Atlanta routes among the most notable. At the same time, the country’s low-cost domestic carriers are opening more and more routes into other African countries, making intra-African travel much more affordable.
But in order to drive further recovery and – beyond that – growth and expansion, players in the sector must ensure that they provide customers with the best possible experiences. Technology is increasingly vital to delivering those experiences.
The right tech implemented correctly
But what does that technology look like? And how should players in the sector go about using it?
A good first step is to ensure that the business is optimised for discoverability. That means taking a serious approach to things like search engine optimisation (SEO) and website performance. The latter may not seem like that big of a deal, but it is. While there are slight variations, most people agree that the ideal load time for a website is 1-2 seconds, with every second thereafter increasing the likelihood of abandonment. But discoverability can go beyond that. Many big hotel groups, including Radisson, have virtual tours to give prospective guests a real sense of what they can expect should they decide to make a booking.
Social media is, if anything, more important than ever. Research released in 2022, for example, shows that 40% of Gen Z internet users are using social media apps like TikTok and Instagram as their primary avenue for search. That means that sector players shouldn’t just have a presence on these apps; they also need to ensure that they produce engaging and compelling content. A good example of how social media can be used to improve customer experience comes from UK booking site lastminute.com. It used TikTok to promote a new range of flight and hotel packages to young travellers looking to beat the January blues. The campaign saw 10.5 million impressions and an impressive 18% click-through rate.
Having a white-glove onboarding experience, whereby the organisation’s customer success team guides new customers through each step of the onboarding process is also important. Travel and international travel especially are big time and money commitments. Ensuring that people feel like their experience is personalised from the start sets them up for a much better overall experience. Let’s say you’re using a hospitality marketplace to book your accommodation for a trip. A great onboarding experience from that marketplace would include things like extrapolating from the difference between current location of the user and their final destination (the hotel, etc), that they might need car hire/rental/ or currency exchange or SIM card procurement support. It could also include tailored recommendations based on their previous uses of the app, where they’re staying, and how many people they’re travelling with.
Payment tech can make a big difference
Finally, having the right payment tech in place can make a massive difference too. Remember, we live in a time where people can (and would rather) organise and pay for almost every aspect of their trip online. From flights to accommodation and even tourist experiences, all can (to varying degrees) be paid for online.
But if your online payment process contains any friction, you’re going to lose out on customers. In fact, research shows that 88% of UK consumers (one of South Africa’s biggest travel markets) will abandon purchases if faced with friction. Conversely, having the right payment tech in place can act as a growth engine. Hotels for example, might get more value and margins out of direct bookings. Paystack platform partner Siteminder makes this possible. Payment technology like direct bookings also help hotels to build up lifetime value by owning their own data and experience as opposed to relying on booking engines where 15% or so is taken. More than just making payments smoother while also ensuring that they’re secure, the right payment tech can help tourism and hospitality businesses expand their customer base, achieve more successful bookings, and build brand loyalty. The data gathered from payment gateways can, for example, also be used to build customer behaviour insights, which can then be used to further improve the overall customer experience.
That doesn’t just apply to pre-booking either. After all, the customer experience carries on long after a trip has finished, with many opportunities for additional wins.
Let’s take wine farms for example. Visiting them and sampling their fares is a popular tourist activity, particularly in the Western Cape. More often than not, visitors will buy a few bottles – either to enjoy throughout the rest of their trip or to take home with them. Some will also want to keep buying once they get home (especially if the rand remains weak). That can bring in some serious money, too. According to eCommerceDB, the South African Wine ecommerce market is predicted to reach US$18.9 million by 2023 and accounts for 19.2% of the alcoholic drinks’ ecommerce market in South Africa. Again, having payment tech that contributes to frictionless payment experiences is incredibly important. Fortunately, a growing number of players understand this. In the wine industry, for example, Commerce7 is a leading direct-to-consumer sales platform and has baked secure, frictionless payments into its offerings.
Investing in success
Of course, building great customer experiences isn’t a once-and-done kind of thing. It’s something that you have to pursue on an ongoing basis. Whether that means being on a new social media platform, finding new ways to enhance a website or onboarding process, or adopting new payment technologies, it’s something that organisations need to constantly be working on.
So, as South African tourism and hospitality businesses look to recover, and then grow beyond pre-pandemic numbers, it’s vital that they concentrate on building the best possible experience for potential and existing customers alike. That, in turn, means investing means making effective use of all of the technologies available to them, including those concerning payments.
Joel Bronkowski has spent the past 13 years focused on growing global ecommerce and payments platforms. Following exciting stints at WooCommerce, Automattic, and Shopify, he is currently the Country Lead for Paystack in South Africa where he’s focused on helping businesses solve their payment challenges as well as helping connect businesses to the tools that are driving ecommerce growth in Africa.