Tourism with a twist

Ad­min clerk ‘brakes’ with back­room to ac­cel­er­ate into the real world

Finweek English Edition - - Portfolio Punts -

BE­ING HIVED OFF in a back­room of­fice in a sales depart­ment can have its ben­e­fits. For starters, you’re ex­posed to num­bers that in them­selves can make sure-fire suc­cess sto­ries. Kag­iso Du­masi’s suc­cess story is, in a sense, a nar­ra­tive straight out of a spread­sheet in the sales depart­ment of the plum Mel­rose Arch Ho­tel, north of Jo­han­nes­burg. Du­masi was 29 in 2006 when she stum­bled upon an op­por­tu­nity that would de­fine her ca­reer as an en­tre­pre­neur in tourism.

Al­most daily, throngs of high net worth in­di­vid­u­als coursed through the dainty en­vi­rons of Mel­rose Arch, ei­ther for busi­ness or a typ­i­cally tourist ex­pe­ri­ence. And al­most ev­ery day for close on 18 months Du­masi would make book­ing ar­range­ments for ev­ery­thing from trans­port for guests to se­cur­ing event man­age­ment venues for the ho­tel’s busi­ness clients. Those clients she did oc­ca­sion­ally get to phys­i­cally in­ter­act with would con­stantly voice their frus­tra­tion about get­ting around the city due to trans­port has­sles.

Then it occurred to her: why work in an ad­min­is­tra­tive job when she could make a mint from a lu­cra­tive ca­reer as an en­tre­pre­neur in the tourism sec­tor? So she ap­proached her man­ager, Dou­glas Allen, and asked whether he’d be will­ing to of­fer her clients to kick-start a tourism start-up. Allen – who Du­masi de­scribes as a “men­tor” – obliged. But with a caveat: her ser­vice had to be ex­traor­di­nary enough for the ven­ture to thrive in SA’s com­pet­i­tive tourism in­dus­try. “He told me my busi­ness would have to have a twist – some­thing dif­fer­ent to the usual ser­vices pro­vided by trans­port and tourism com­pa­nies the ho­tel had re­la­tion­ships with.”

No sooner had Du­masi quit her job, than the idea of a concierge in­volv­ing a spe­cialised range of ser­vices (in­clud­ing trans­port) emerged. Du­masi teamed with Sola Owoloja – an as­pi­rant en­tre­pre­neur in the chauf­feur busi­ness – to form West chauf­feurs. “The idea ( which soon be­came re­al­ity) was to of­fer a com­bi­na­tion of a spe­cialised concierge and trans­port ser­vice that was pretty much an ex­ten­sion of a client’s life­style,” she says.

Allen would coun­sel Du­masi about po­ten­tial clients and their pro­files. She’d then dis­til their spe­cific pref­er­ences from those pro­files and de­sign a tourist pack­age to suit their lifestyles. “For ex­am­ple, one would want to go to a night­club (or even a strip club) af­ter a func­tion. Our driv­ers – who aren’t only im­pec­ca­bly dressed but also well versed in a range of is­sues that tourists find handy – would be briefed that they’d be re­quired to work over­time.”

It was an am­bi­tious plan that would in­volve a slog, ini­tially us­ing her per­sonal re­sources to get started. Her first stum­bling block was sourc­ing lux­ury ve­hi­cles to shut­tle her clients around in. “High value clients are savvy about their mode of trans­port. If they want a Mercedes-Benz it’s not your or­di­nary ve­hi­cle. They want lux­ury – say, an S500,” she says.

When Du­masi con­tacted Avis, it turned her down be­cause she was still new in the in­dus­try. “Avis said it couldn’t take the risk of leas­ing a ve­hi­cle to some­one without a track record. I was told my busi­ness case wasn’t com­pelling enough to prompt the com­pany to lease ve­hi­cles to me.”

So Du­masi turned to lo­cal tour op­er­a­tors in a bid to sub- con­tract their lux­ury ve­hi­cles for her clients at far lower costs than rental com­pa­nies. That meant she was able to de­ploy cash she would oth­er­wise have spent on rental leases on other ex­tra ser­vices as a value add to her clients. Iron­i­cally, the very ser­vices she’s been able to of­fer from lower rental costs be­came her com­pet­i­tive ad­van­tage over those ri­vals she leases ve­hi­cles from.

Ten months into the busi­ness, West chauf­feurs has ex­pe­ri­enced a re­mark­able growth run. The com­pany has since added the De­vel­op­ment Bank of South­ern Africa, Jo’burg Tourism, bro­kers/spon­sors Barnard Ja­cobs Mel­let and in­surer Lib­erty Life (among oth­ers) to its im­pres­sive port­fo­lio of clients. That the com­pany has grown rev­enue from R2 200/month to al­most R200 000/month is im­pres­sive. West now has six lux­ury ve­hi­cles and em­ploys six driv­ers and tour op­er­a­tors full time.

With de­mand for its ser­vices ris­ing and the pres­sure of over­head costs as oner­ous as ever in a tough eco­nomic cli­mate, Du­masi has de­vel­oped a sim­ple but clever strat­egy to ex­pand her client base without adding to her over­heads: she hires ad­di­tional ve­hi­cles and driv­ers on an ad hoc ba­sis to meet ad­di­tional de­mand. Once her mar­gins start grow­ing com­men­su­rately, she’ll in­vest in new ve­hi­cles and per­son­nel.

“It makes busi­ness sense to em­ploy more part-time driv­ers be­cause you get to pay them on an as­sign­ment ba­sis. The core fleet of ve­hi­cles I own and the driv­ers I em­ploy meet my cost struc­ture – that is, my rev­enue ver­sus ex­pen­di­ture.”

Du­masi’s other clients in­clude min­ing gi­ant An­glo Amer­i­can, Eskom and SA Tourism in SA, with Nige­ria rank­ing as the big­gest source of clients in the con­ti­nent. And she’s sourc­ing clients in East­ern Euro­pean coun­tries who are in­creas­ingly warm­ing to SA as a tourist des­ti­na­tion.

For now SA re­mains her pri­mary growth mar­ket. But over the medium term she plans to be­come a global player.

Kag­iso Du­masi

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