Investment. The number of entrepreneurs joining a particular industry usually signify its profitability. In Uganda, tourism is one of the fastest growing industries which attracts a great number of investors both local and international every year. Jowet Matsiko is one of those young entrepreneurs happy to have ventured into it, writes Paul Murungi.
In 2017, Jowet Matsiko started a tour and travel agency with Shs4m. The soft spoken 27-year-old Matsiko reveals that he was able to grow his business and is now valued at Shs50m in less than three years. At 24 years, Matsiko realised his childhood dream when he bought his first car in September, 2016. All he wanted was to fulfill his passion of travelling.
At that time, he was in his second year at Kampala International University (KIU) pursuing a degree in Information Technology.
However, three years down the road, the young and ambitious entrepreneur has nurtured his passion into a successful tour business.
Armed with Shs4m he had saved during his working days in Juba, South Sudan, Matsiko bought his first car, a second hand Ipsum. All he wanted was to travel with friends from campus to the beach for fun during weekends. However, he set a condition for his friends to contribute fuel. But since he only drove the car during weekends. Matsiko decided to hire it out.
“I got a driver who agreed to pay me Shs120,000 for using it six days and I would have my car on Sundays, I would also earn extra income from students since I got a balance on the money contributed for fuel,” he says.
After two months of hiring the car out, Matsiko realised the driver was delivering less money than agreed upon. “The driver started giving excuses. So the money started reducing; when the money dropped below Shs80,000, I decided to get back my car,” Matsiko recounts.
Matsiko realised to keep making money, he had to change strategy.
“When I got the car from him, I decided to drive it myself and would only ply two routes; that is Jinja and the airport. I would also market the business at campus to students and lecturers because for any business to succeed, you start with the people around you,” he says.
Whereas most of the clients Matsiko received travelled to and from the Airport, he got his first major breakthrough in November 2016 when his Indian lecturer gave him a deal.
“I was marketing my business during a lecture, my lecturer got interested and told me that he wanted someone to transport his brothers coming from India to Jinja for a tour. We agreed, and I was paid Shs500,000 for the journey,” Matsiko explains.
From then, Matsiko says he developed love for tour business. Apart from chauffeuring foreign tourists to hotels. He started casting his net in deeper waters mainly targeting tourists travelling to tourist sites such as national parks who paid handsomely.
Jinja still was his first major destination, especially with local tourists and a few foreign tourists. And still he engaged students who would travel to Jinja for fun.
Since he was more conversant with Jinja, he played both roles of a driver and a tour guide; and also charged $150 (about Shs550,000 shillings) for a trip.
Whereas he would get clients, his car started to constantly breakdown leading him into more repair costs which ate into his profits. By January, Matsiko could not withstand the high costs of repair and decided to sell it off.
“I sold it off at loss of Shs2.5m. Then I started to hire cars to ferry my clients which proved expensive and inconvenient,” Matsiko says.
As his interest in the tour business grew, he felt the urge to swim alongside sharks and decided to formalise it by registering Gild Tours and Logistsics Ltd. In February, 2017 he engaged a lawyer who helped him register. That same month, he opened a Facebook page to market the business and also paid for its boosting to reach many people.
But since he was still at university, he lacked the necessary money to open up an office space.
“I would meet my clients at restaurants in the city and other hangouts. I used to lie to them that I was out of office yet in actual sense I had no operating space,” Matsiko explains.
However, he says sometimes he incurred losses in terms of transport since some clients he went to meet took him for granted. Others never honored the appointments. This went on until when he acquired office space at Mazima Mall in Kabalagala.
By June 2017, Matsiko had saved enough money for a new car for his tour business. “I had saved up to eight million, and partly acquired a loan of Shs6m from the bank to make it Shs14m. But the car cost Shs21m, so I remained with a balance of Shs9m which I paid later.”
He adds: “The car helped me in both long and short trips because there are tourists interested in being driven to hotels, especially in the city.”
In July, 2017, the entrepreneur decided to go digital. Using his IT skills horned at university, he designed the company website and engaged in digital marketing. “It took me three weeks to complete the company website and I also made some promotional materials like posters and business cards. The tourism business needs a lot of marketing and you need many sources,” he explains.
Increasing demands from potential clients made Matsiko realise he had to learn a lot in a short time in the fast paced tour industry. He recalls a nasty experience with a client while travelling to Bwindi Impenetrable National Park in 2017 when they got lost along the way. This, he says was his first time to take clients to a national park.
Matsiko says, “I got clients travelling to Bwindi, but my first challenge was that I lacked a tour guide and a driver.
So, I hired a driver because I wanted the journey to be smooth. But another challenge was we did not know the exact way to Bwindi. We ended up spending more time and fuel throughout the journey. We had also not booked for accommodation yet bookings are done prior in Kampala for most national parks. We later got accommodation but very expensively since most lodges charge in dollars. I apologised to the tourists for the inconvenience,” Matsiko recounts.
The clients had paid him more than $2,000 (about Shs7m) for the tour package involving park entrance fees, a tour guide, transport and middle income accommodation.
From that experience, the tour operator says it was a blessing in disguise. He realised he needed a specialised tour guide to handle long journeys. He decided to employ a tour guide. However, he says most tour guides double as drivers.
A chance meeting with a client who wanted to travel to India but had no idea how to get there opened up new opportunities into hotel reservations, visa processing and air ticket booking for Matsiko.
“So, I had to process his visa, get air ticket and booked for him a hotel in India and also drove him to the airport. I learnt how to organise trips for tourists. It requires meticulous planning such as hotel reservations, pick up from the airport and transport to tour sites,” he explains.
Matsiko says he has learnt on the job one needs a proper business strategy to keep running both inside and outside the company. You also need to keep growing your contacts both within and outside the country.
He adds: “I have learnt that you need to relegate because when I was a beginner in the industry; I thoughI could do everything but I felt challenged because I lacked certain skills. That is why I decided to recruit other members. I have also learnt how to market because the business is based on marketing skills.”
Matsiko notes that as tour operators they have a challenge of clients who book and cancel journeys. He says normally, they incur a lot of costs in terms of fuel, time, facilitation and office material to organise for such journeys. However, when a client cancels a journey, it is an automatic loss.
He adds: “Some national parks have poor road networks and this discourages some tourists, especially those from foreign countries from visiting such places, yet not many Ugandans are willing to pay for prices to these places, especially those whose rates are in dollars.”
Matsiko says he is now able to organise trips for any tourist visiting Uganda or travelling to foreign countries through his contacts around the world. And he is happy for being able to travel to most parts of Uganda.
Opening up an office space in the city is a big achievement to Matsiko since he has an address where clients can meet him. He also says he has been able to employ six permanent employees who engage in marketing, driving, tour guiding and office work.
“I am also a member of the Association of Uganda Tour Operators (AUTO) where I pay an annual membership fee of Shs700,000. Through AUTO, I have been able to build contacts in and outside Uganda and also get support where necessary like hiring vehicles to transport clients,” Matsiko boasts that he has contacts from almost every major country in the world.
Research is an emerging business field in the tourism industry which Ugandans have not exploited, according to Matsiko. He says many foreign tourists carry powerful machines in form of cameras and they discover a lot of information from our national parks which they again sell to us after refining it.
“We need to take records on our tourist sites by exploring the history, climate seasons, animal species and the nature of our environment because many people need this information,” he says.
Tour guides are much sought after by tour operators. Matsiko says tour guides who are knowledgeable about Ugandan sites are few and that is why they are able to earn handsomely per trip. (They are paid between Shs1 and two million shillings for their services.) Accommodation is another business opportunity where Ugandans can invest.
Matsiko advises government to ensure that infrastructure, especially roads are kept in good conditions to attract more tourists. Good roads also boost our image internationally.
“Hotels charge exorbitantly, you can imagine paying $450 dollars (about Shs1.6 m) for a single night. I urge the government to rein in the hotel charges and find out what exactly they offer for those charges. This is affecting us as tour operators, especially when making quotations for clients,” Matsiko says.
He advises new entrants into the tour business to be patient because travelling is seasonal.
“Each person would like to travel to a place once. So you have to convince other people to travel. Engage in research in terms of target market and resources at hand; also build trust in clients and staff you are serving so that there is no blame game of cheating.”