SPATIO-TEMPORAL GROWTH PATTERN AND PATRONAGE LEVEL OF AIRLINE TRAVEL AGENCIES IN NIGERIA
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1 JORIND 15(1)June, ISSN SPATIO-TEMPORAL GROWTH PATTERN AND PATRONAGE LEVEL OF AIRLINE TRAVEL AGENCIES IN NIGERIA I.T. Bawa, I.J. Musa and J.O. Adefila Department of Geography, Ahmadu Bello University, Zaria, and A.E. Ubogu Department of Geography and Regional Planning, Federal University, Dutsin-Ma Abstract This study assesses the growth pattern of airline travel agencies over a period of forty years across locations in Nigeria as well as the patronage level of agency business. The need for the study arises because of the technological marketing of airline tickets through direct online ticket sales that aims at reducing cost by eliminating travel agents commissions. The study made use of primary data involving a questionnaire survey of 215 IATA travel agents on their view about the patronage level of agency business. Secondary data required for the study were extracted from the records of IATA on the number and locations of registered travel agencies in Nigeria from the year Data collected were analysed using descriptive and inferential analyses. Data were also mapped to show the spatial distribution of travel agencies across locations in Nigeria over four decades. The study found a decrease in the growth rate of travel agencies during the fourth decade of The results of the mapping show that Lagos dominates the location of travel agencies in Nigeria over the years. The patronage level of travel agencies by both individuals and corporate bodies was found to be moderate. It was recommended that that travel agents need to strategise to diversify business focus into other areas such as hotel booking and organisation of tours. Keywords: Airlines, agencies, patronage, temporal, spatial Introduction The advent of travel agents in Nigeria is as old as the beginning of airline operations. Travel agents make travel arrangements and bookings for prospective travellers, and provide information about tourism attractions in the country of destination. Airline travel agents also involve in the selling of airline tickets, booking of hotel accommodation, and organisation of tours. Travel agents may work in a range of areas, including retail (in a high street travel agency), corporate (arranging travel for business customers) and online (using web tools and services). The first generation of travel agencies in Nigeria were West African Shipping Agencies (WASA), Umarco Travels Agency, John Holt Travels, Transcorp, and Mandilas Travels (Diepiriye and Okereke-Onyieke 1997). These few agents at the earlier time restricted their operations to Lagos International Airport, and were not found in every location. Over the years, it has been observed that more airline agents have tremendously increased in number and spread across the geopolitical zones of Nigeria. This is a result of development that led to the structuring of Nigeria into six geopolitical zones of thirtysix states for administrative purpose. The increase of travel agents from less than five (5) at its inception to about 600 spreading across all the geopolitical zones of Nigeria calls for an examination. This necessitates the need to carry out an assessment of the pattern of growth of airline travel agencies across locations in Nigeria over a period of time. Indeed, the monopoly of the travel agency business was by foreigners for the best part of twenty years of its existence in Nigeria (NANTA, 2012). Nigerians gradually started establishing travel agencies, especially by those who worked with the foreigners. As at that time, it was easier to start a travel agency business because it required little capital. Today, the story is different. A huge amount of capital is required to set up a reputable travel agency. A report by IATA (2010) stated that the criteria for establishing a travel agency company include the following: 30million Naira share capital, 10 million Naira bank guarantee and qualified staff. The sector is said to have more than six hundred office locations in Nigeria according to the National Association of Nigerian Travel Agents (NANTA, 2015). Before a traveller makes a trip, there is need to plan and make arrangement for the trip. Usually one faces many options in choosing a good air carrier, accommodation and attractions. To choose wisely, the prospective traveller needs a wide variety of information on prices, quality, characteristics of destinations, and schedules. After accessing this information, the traveller then needs a reservation for the trip. This is of a particular interest because airlines operate on schedules. Some people rely on themselves to prepare and arrange their trips; others depend on the services of travel agents, who are usually well trained to plan trips for their clients (Alamadari, 2002). 228
2 It is the tradition of airlines to distribute their tickets to the passengers through their sales offices and travel agents who collects commission on every ticket sold on behalf of airlines. However, the recent trend in reaching the travellers through direct online ticket sales (e-commerce) has opened a big window for the airlines to reduce ticket distribution costs serving as commissions to travel agents, and also keep detailed records of their customers (Santis, 2012). Generally speaking, the demand for commercial air travel inadvertently affects demand for air travel agents. James (1980) examined the period when airlines solely depend on travel agents for sales of tickets through Global Distribution System (GDS). The study found that the operations of travel industry have improved over the years because of the greater levels of international travel around the world. The drive to reduce distribution costs through increasing online sales, e-ticketing, self-servicing, reducing travel agents commission and battle against GDSs will be an on-going strategy while at same time the internet will continue to revolutionize travel distribution (Mason, 2008). Bogdanovych, Berger, Simoff, and Sierra (2006) assessed the need to tackle the shortcomings of the nowadays online tourism portals in relations to travel agents versus online booking found that social interaction with travel agents, their expertise and possibility to save time can be of higher importance to travellers. The online direct sale of airlines tickets to customers may have significant effect on the growth of airline travel agents in Nigeria. This may arise as a result of the desire of airlines to cut cost by eliminating agents commission on tickets. The consequence of this will be that travel agents will have to compete to meet up with business demands. In the process of competition there is tendency that the number of airline travel agents reduce while at the same time welcoming new entrants. This is expected to lead to fluctuation in the growth of surviving airline travel agents over a period of time. Invariably, the patronage of travel agencies by prospective passengers tends to also fluctuate as a result of changes in the demand for air travel and airlines direct online ticket sales. This study therefore aimed at examining the growth pattern and patronage of airline travel agents in Nigeria based on geopolitical regions of the country over a period of time. It is therefore the focus of this study to identify the extent of growth of airline travel agents in number across locations in Nigeria, and their patronage level in sales of airlines tickets. Methodology The data types required for this study include the number of registered airline travel agents and their locations across Nigeria over a period of forty years as well as the level of corporate and individual airline ticket sales by travel agencies. The data on the number and location of travel agencies were obtained from secondary source by extraction from the records of the International Air Transport Association (IATA) on the list of registered travel agencies in Nigeria over a period of four decades from The data regarding the level of personal and corporate patronage of travel agents were gathered from the records of the airlines. The study also made use of questionnaire survey of a total 215 travel agents in four major international airport cities of Lagos, Abuja, Kano and Port-Harcourt. The questionnaire survey was conducted using purpose sampling to ensure that only travel agents with IATA registered agencies were sampled. The data collected were analysed using descriptive analysis involving tables presented in frequency and percentage, and maps. The aim of the analysis is to show the pattern of growth in the number and location of air travel agencies in Nigeria over a period of time. The period under consideration was divided into four decades from , , , and in consideration of the number and locations of airline travel agencies in Nigeria. The study also applied Friendman s Two-Way Analysis of Variance (ANOVA) to test for the level of significance difference in the temporal decadal growth of airline travel agencies in Nigeria. Data on the level of both personal and corporate tickets offered were subjected to T-Test to test for the significance difference in the level of airline patronage involving corporate and individual tickets. Result and discussion Spatial distribution of airline travel agencies in Nigeria The total number of IATA registered travel agencies in Nigeria is as presented in Table 1. This shows the major cities in Nigeria where airline travel agencies which are registered with IATA are operating as at the year It is to be noted cities with highest number of travel agencies are major airport cities in Nigeria. The cities which are Abuja with 70 IATA registered travel agencies, Kano having 77 travel agencies, Lagos with 348 and Port- Harcourt with 31 travel agencies are cities where the major international airports in Nigeria are situated. This implies that airline travel agents locate their business close to major international airports where the demand for air travel dominates. Table 1: Distribution of airline travel agencies in Nigeria City No of Agencies Percent (%) 229
3 Abeokuta Abuja Benin City Eket Enugu Ibadan Ilorin Jos Kaduna Kano Lagos Minna Nnewi Onitsha Osogbo Oyo Port Harcourt Umuahia Uyo Warri Total Source: Compiled from IATA, 2016 The fact that majority of the airline travel agencies are located in Lagos further confirm that Lagos remains the major business and economic nerve centre in Nigeria. The result as presented in Table 1 shows that 60 percent of airline travel agencies in Nigeria are located in Lagos. This further implies that both local and international wings of Lagos airport dominate air traffic operations in the handling of aircrafts and airline business in Nigeria. Airline travel agency decadal variation It is indicative from Table 2 that there is positive growth in the number of airline travel agencies registered in Nigeria over a period of four decades. This may be as a result of increasing population growth, expansion of the scope of airline business, the overall economic development of the country, and the spread of people within the geographical locations in Nigeria. 230
4 Table 2: Decadal Variation of Airline Travel Agencies City % % Growth % % Growth No No No No Growth Growth Enugu Ibadan Jos Kaduna Kano Lagos Onitsha Port Harcourt Abuja Benin City Umuahia Eket Ilorin Minna Nnewi Osogbo Warri Abeokuta Oyo Uyo Total Test statistic = df = 3 Sig. level = Remark Significant Source: Field Survey, 2016 The result as shown in Table 2 reveals that generally airline travel agency increases from decade to decade within the years under review. However, it was observed that there was increases in percentage in the decade ( ) proceeding the starting decade ( ) with about 285% increase of the starting decade and afterward a continuous decline in the remaining decades i.e with 266% increase of the second decade ( ) and with only about 58% increase of the previous decade respectively. Also, observable was that during the second decade Kano experienced the highest (1400%) growth of airline travel agencies, followed by Lagos (312%) while 50% represented those in Port Harcourt. The unprecedented percentage growth witnessed in this decade undoubtedly could be attributed to the aftermath of the airline deregulation Act of 1978 which was completed in 1984 that made many airlines drop unprofitable routes without subsidy in favour of more heavily travelled and profitable routes giving birth to new airlines springing up to take advantage of the new market, hence the need for more airline travel agencies. Moreover except for Kano (133.3%) and Onitsha (350%) that has percentage growth increase during the fourth decade from the third, the rest cities experienced a percentage growth decline. The result of the Friendman s Two-Way Analysis of Variance (ANOVA) shows that there is a statistical significant difference in the temporal decadal growth of airline travel agencies in Nigeria. The spatial locations of airline travel agencies across Nigeria for the four decades of , , and is presented in Figure 1 4 respectively. 231
5 Figure 1: Distribution of Airline Travel Agencies from in Nigeria The spatial distribution of airline travel agencies across locations in Nigeria within the year presented in Fig 1 shows that travel agency business was located in only eight (8) cities of Nigeria. These cities are Lagos, Abeokuta, Ibadan, Kaduna, Kano, Jos, Onitsha and Port-Harcourt. It is indicative that majority of the travel agents during the decade were located in Lagos. The presence of IATA registered airline travel agency in cities without airport such as Onitsha being a commercial city, indicates that the extension of agency business to commercial cities by the establishment of their branch offices. This reason for establishing branch offices in other cities without airport is for marketing purpose. This will invariably lead to a dispersed location of airline travel agency business across locations in Nigeria. The spatial distribution of airline travel agencies during the second decade of shows an increasing number of airline travel agencies across locations in Nigeria in compared to the first decade covering (See Fig 2 compare to Fig 1). This means more cities are being covered with travel agency business in Nigeria. Cities such as Ilorin, Minna, Abuja, Enugu, Owerri and Uyo became additional cities with travel agencies between 1985 and The reason for is a result of the establishment of airports in these cities. 232
6 JORIND 15(1)June, ISSN Figure 2: Distribution of Airline Travel Agencies from in Nigeria Source: Field Survey, 2016 The temporal growth in the number of airline travel agency further shows from Fig 2 that Lagos dominates the number of airline travel agencies in Nigeria. It is worthy to note that Abuja that was without airline travel agency during the decade now accommodates fifteen (15) airline travel agencies during the decade (see Fig 2). This is majorly as result of the fact that Abuja became the Federal Capital Territory of Nigeria during the decade. Furthermore, it is to be noted that Enugu, Jos and Onitsha did not record any growth in the number of airline travel agencies from the previous decade. This may,in the case of Onitsha, probably be as a result of the fact that there are no airports in the city. 233
7 Figure 3: Distribution of Airline Travel Agencies from in Nigeria Source: Field Survey, 2016 An examination of Figure 3 reveals that the number of surviving airline travel agencies increased from a total of 100 during the decade to 366 by the decade. Lagos still maintained its dominance in the location of travel agents across the country. The city of Lagos has 260 travel agencies followed by Kano with 33 travel agencies and Abuja 31. An unprecedented surge in the number of airline travel agencies was recorded across the cities in comparison to previous decades. For example, Abuja that had only 3 travel agencies during decade but went up to 31 airline travel agencies by the decade. This could be attributed to increase in the demand for air transport service hence the need for more airline travel agencies. Observable also is the increase in the number of cities with airline travel agencies from 11 to 17. Across the cities, it was only in Jos that did not experience an increase in the number of airline travel agency from the previous decade. 234
8 Figure 4: Distribution of Airline Travel Agencies from in Nigeria Source: Field Survey, 2016 A careful examination of Figure 4 shows a decadal increase in the number of airline travel agencies across Nigeria from 366 to 577 airline travel agencies from the previous decade. Lagos, Kano, Abuja and Port Harcourt also had the highest presence of airline travel agencies during this period in Nigeria while Benin, Eket, Osogbo Abeokuta, Oyo and Uyo accounted for the least. The possible explanation for this is that presently, Lagos has an unlimited number of economic and commercial activities that are capable to generate high demand for air transport. Also, Abuja being the present seat of government in Nigeria serves as the city for the movement of people especially top government functionaries and diplomats that require air transport. All the cities experienced an increase in the number of airline travel agencies from the 3 rd decade except for Jos, Benin, Eket, Illorin and Osogbo. Patronage level of airline travel agencies in Nigeria The level of patronage of airline travel agencies was assessed by the study to generate the view of IATA registered travel agents about the current demand for their services in the face of threat posed by direct online ticket sales by airlines. It can be deduced from Table 3 that the demand for airline travel agency business is moderate in Lagos. This might be as a result of the high level of exposure of people living in Lagos to internet facilities and technological advancement. The high demand for the services of travel agents in Kano may result from the fact that Kano people seems to be conservative to explore offers from the advancement of technology to directly book their flights on the websites of airlines. It is categorically implied from Table 3 that the demand for airline travel agency business is low in Port-Harcourt. It is possible that the low demand for travel agency business in Port-Harcourt is as result of the fact that oil companies which most of them have their headquarters in Lagos book for air flights of their workers to and from Port-Harcourt in Lagos. 235
9 Table 3: Patronage Level of Airline Travel Agencies City High Moderate Low Total Lagos 18 (10.7%) 117 (69.6%) 33 (19.6%) 168 (100.0%) Kano 10 (52.6%) 4 (21.1%) 5 (26.3%) 19 (100.0%) Abuja 8 (38.1%) 9 (42.9%) 4 (19.0%) 21 (100.0%) Port Harcourt 0.0% 0.0% 7 (100.0%) 7 (100.0%) Total 36 (16.7%) 130 (60.5%) 49 (22.8%) 215 (100.0%) Source: Field Survey,
10 JORIND 15(1)June, ISSN The summary of Table 3 shows that in the overall, the demand for airline travel agency business in Nigeria is generally moderate. This is based on the fact that 60 percent of the total respondents who are IATA registered travel agents are of the view that the patronage for their services is moderate. Conclusion The importance of travel agency to the overall operations of air transport industry cannot be overemphasised in Nigeria. It is obvious that this study have established the variation in the number of airline travel agencies in Nigeria over a period of forty years. The study revealed that airline travel agency business witnessed the highest growth during the third decade of of the scope of the study. It was found that there is significant spread in the growth of travel agency across locations in Nigeria. Lagos being the most commercial vibrant city in Nigeria dominates the location of airline travel agencies. Furthermore, the study provided the view of registered IATA travel agents on their level of patronage, and resulted that level of the patronage of airline travel agencies in Nigeria is moderate. Recommendations It is therefore pertinent to recommend that travel agents need to look into strategies to diversify business into handling chartered passenger, dedicated cargo flight and tours instead of relying only on advertised, scheduled flights which will help boost their revenue base. This should be done with a view to boosting the growth rate and spread of travel agents across locations in Nigeria. The study leaves a gap for further study that will examine the effects of airline direct online tickets sales on travel agencies. Diepiriye, D.C and Okereke-Onyieke, N. (1997).Air Transportation in Nigeria: Strategies for21st Century. Lagos: Academy Press Plc Almandari, F. (2002).Regional Development in Airlines and travel agents relationship.journal of Air Transport Management, Pp Mason, K. (2008). Airline Distribution. Air Transport Management Seminar. Lusofona. Accessed from 631/artg10.pdf?sequence=1 Santis, G. (2012). Which Future for the Airline Distribution? Thesis Submitted to the Department of Impresae Management Chair of Tourism Management. LuissGui NANTA, (2010).National Association of Nigerian Travel Agents Annual Report. NANTA, (2015).National Association of Nigerian Travel Agents Annual Report. Acknowledgement The authors are grateful to travel agents that were surveyed for the purpose of the study. References James, M. (1980).The Demand for Travel Agents. Journal of Transport Economic and Policy, Vol. 14, No. 2. IATA (2010). International Air Transport Association Travel Agencies Directory. Part 1 Summary Report, IATA. 237
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