ET Holiday: a sore issue with tour operators


Ethiopian Airlines (ET), Ethiopian Tour Operators’ Association (ETOA) and private tour operators have gotten into a dispute following the Air Transport giant’s entry into the local tour operations market through its newly-formed ET Holiday Division.
Recently, ET and the association discussed issues concerning how to handle tour operations together, but ET unilaterally went ahead and floated a bid for a joint venture (JV) and has already selected a tour operating company to work with, claim tour operators.  Their complaints centre around the fact that joint discussions and negotiations between the two groups were about working together for the growth of the sector, but Ethiopian’s actions in floating the bid and selecting a specific company to work with, defeats the whole purpose of the negotiations and hence is improper. 
The consultative forum organized by Ministry of  Culture and Tourism  was held on April 8, at the Sheraton Addis aims to boost the tourism sector in partnership with the private sector.
According to the tour operators, besides the fact stated above, the state monopoly’s new plan will force them out of the sector. Meanwhile, ET stated that its plan was to work together with established companies for mutual benefit. “The bid is illegal,” the tour operators claim. This is because only one company (Boston Day Spa) participated and won the bid,” they argued. At the event held on Monday, April 8, to address the problems facing the tourism sector, this issue of ET Holiday was raised.
Essayas Wolde Mariam, Senior Vice President (SVP) of Global Sales at Ethiopian Airlines, informed participants that the airlines does not wish to control or dominate the sector; however, he admitted that it has selected one partner to undertake its activities. “We will outsource the business that comes our way to the rest of the tour and travel companies,” he informed the gathering at the consultative forum.
Even though the ET official gave assurances that the ET Holiday Division will work with other companies, tour operators made clear their fear and suspicion about the monopolisation of the business by ET and its partner.
The following Thursday, the association and ET officials met to discuss and find an amicable way to resolve the issue. But sources informed Capital that the discussion was less than satisfactory. There as more of accusations rather than addressing the primary issue, our sources indicated. The tour companies kept on accusing Ethiopian that it was in violation of the law when it floated the bid, while Ethiopian denied it was outside the bounds of the law. “We followed the government’s procurement policy, if you believe there was misdemeanour during the bid process you can appeal to the federal Anti Corruption Commission,” an ET official, is said to have said at the discussion.
On the other hand, Ethiopian in its turn accused tour operators of price excesses; in regards to the amount of money they charge tourists. “The money tour companies charge ET clients that want to travel to the country has played a major role in discouraging them from coming here,” ET accused.
Experts say that such deals were usual and are used by other airlines in the world, but in the Ethiopian scenario it might affect private tour companies that are new and are subject to capital limitations. Due to that fact these companies will be unable to compete with ET Holiday. “The new division that Ethiopian has established will have to take into consideration these new and upcoming tour companies for the development of the sector,” experts notified Capital.
Experts advised that both parties have to focus on working together rather than engage in conflict. “The sector is vast and relatively new; therefore, both sides can reap the benefits better and develop the sector accordingly if they work in coordination.” But to do this requires Ethiopian Airlines’ inclusion of all stakeholders instead of one or only a few of them, said the pundits.
According to the new plan, ET will undertake the tour operation business with it sole agent, Boston Day Spa, which will be responsible for handling ET’s tourists and will have sole rights to deal out the services required by these tourists to other tour companies, which need to be selected by another bidding process. Our sources indicated that for the ground services needed by tourists, ET has already selected two companies, which will undertake operations on a subcontract basis. But Capital was not able to get confirmation from the airlines about the selection of these companies. 
Currently, ET has 73 international destinations and this new division will provide the company with the perfect opportunity to carry out the tour and travel business in conjunction with the air transportation service it is engaged in.