Touchdown Travels Limited, Finchglow Travels Limited, Dees Travels and Tours Limited and Quantum Travels Limited under their new body, Travel Investment Company (TICO), generated a combined revenue of N36bn in 2014, underscoring the fact that the travel industry is a multi-billion naira sector.
The N36bn combined revenue is said to represent 20 percent of the market share, with the TICO targeting to grow by 15 percent year on year. The companies also say they have put their share capitalisation at N100 million.
This was disclosed at the weekend during the formal launch of TICO in Lagos; a body that mid-wifed the consolidation of four of the biggest travel companies in Nigeria. This idea of consolidation in the travel industry is about the first in Nigeria
Michael Otubu, managing director of the board and managing director of Quantum Travels Limited, said that the decision of the four companies to form this consortium was not made from the comfort of their financial success but from the depth of their experience in the market.
He explained that together, the companies pooled a wealth of experience, skills and competencies that give TICO the competitive advantage and its drive to work towards building a brand that will become a foremost leader in the global travel industry.
Otubu hinted that their objective is to diversify their operations by adding TICO cargo, airports drop-off services as part of their operations, by putting together travel finance options.
“The decision by the concerned travel agencies to consolidate was more of a natural decision given the competitive nature of the industry. So, in that regard, this is not a new business model.
“However, given the circumstance of the industry changes and looking at the prospects consolidation presents, it is a welcome development to explore other means of revenue generation,” he added.
Speaking on how the individual agencies hope to bury their egos in a business of such magnitude, Dayo Adeola, managing director of Touchdown Travels Limited, stated that ego is a personal thing and has no place in the duty of making business decisions.
He noted that TICO’s principals are indeed very successful in their own rights but in the face of a common industry challenge, they had drawn on from their experiences to come together with a collective vision which can only benefit them as a consortium and as individual companies as well.
According to him, “Consolidation is widely adopted in Europe, South Africa and USA. We can say it started in mid-90s in the USA in the face of stiff competition in the American travel industry. Europe caught on not too long after.”
To him, Asia picked up on it within months and now the rest of the world is seeing it as a viable strategy for cost reduction and profit-making, adding that Nigeria is not exempted from the pressures characterised in global business operations and has no option but to toll the line.
Irene Uti-Egbeogu, chief executive officer of TICO, said TICO is the brain behind this new initiative, noting that consolidation is desirable at this point in time.
She stated that the travel industry in evolving and consolidation is an extract from that evolution.
“Consolidation is sweeping the global travel industry and bringing about tighter affiliations and stronger brands. In Nigeria, I believe that it will bring about efficiency in terms of the operations aspect. TICO has looked into the future and seen that there is strength in number not just by statistic but by strength in competence and negotiation standpoint.
“When you need to broker deals for your clients and partners, you want to do it from a place of strength and not weakness. At the end of the day, it is really about the customer getting the best value and travel experience they are looking for. Consolidation can drive that in this market,” she added.
Sade Williams
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
