In order to unlock the full potential of travel and tourism, we need to incorporate fintech and travel-tech into the industry.
That’s according to Jabulani Debedu, principal consultant and tourism specialist at BDO South Africa.
NDebedu said that the integration of finance and technology, known as fintech, has revolutionised traditional banking and payment systems, transforming how we live, work and travel.
Similarly, travel technology, or travel-tech, has empowered travellers with convenient booking platforms and personalised experiences. It therefore makes sense that significant opportunity exists to bridge the gap between these two sectors.
“Africa’s travel and tourism sector has immense growth potential. But a major hurdle that first needs to be overcome is the large percentage of the continent’s population who remain unbanked, particularly when it comes to facilitating payment for travel and tourism services.
“Additionally, there is a need to digitise existing products and services to enhance market access and the experience for all travellers and improve operational efficiencies for businesses operating in the sector,” he explained.
He said that from a fintech perspective, it is crucial to identify ways to facilitate transactions between businesses in the tourism sector and payment oversight entities.
“One successful example of this is mobile money, which has gained significant traction across Africa, with platforms like M-Pesa in Kenya leading the way.
“Integrating mobile payment solutions into travel-tech platforms can cater to the large unbanked population and provide convenient payment options for travellers throughout the continent,” he added.
Debedu said that fintech platforms can introduce micro-investing or savings features specifically designed for travel purposes, and by enabling individuals to save small amounts of money regularly, these platforms can help people build travel funds over time.
“Fintech solutions can also address the challenges of financial inclusion in Africa by leveraging alternative data sources for credit scoring and providing access to credit for individuals with limited formal banking history.
“This can empower more people to travel and support the growth of domestic tourism within the continent,” said Debedu.
He said that to better incorporate fintech into existing travel-tech solutions, online travel agencies and digital travel platforms should consider integrating fintech solutions to streamline payment processes, provide secure transactions, and even offer financial services like micro-insurance or access to credit for travel expenses.
“Platforms like Airbnb, for instance, which have already disrupted the traditional accommodation industry, could benefit from fintech integration to facilitate seamless and secure payment processes between hosts and travellers.
“Africa’s rich natural and cultural heritage presents opportunities for sustainable tourism initiatives.
“Fintech can support impact investing in sustainable tourism by providing crowdfunding or investment platforms that connect travellers, local communities, and investors interested in supporting environmentally friendly and socially responsible travel projects,” Debedu said.
Debedu added that bridging the gap between fintech and travel-tech holds immense potential for Africa’s travel and tourism sector.
“By incorporating fintech solutions into existing travel-tech platforms, we can enhance payment processes, facilitate secure transactions, promote financial inclusion, and support sustainable tourism initiatives.
“With careful implementation and collaboration, fintech and travel-tech can work together to unlock the full potential of Africa’s vibrant travel industry,” he said.