Exciting changes are afoot in the Saudi Arabian online travel market with the government’s Vision 2030 plan which sets ambitious targets to diversify sources of income and reduce reliance on oil in the kingdom.
There are plans to open up inbound tourism to foreign travellers and boost domestic tourism and a target of 30 Haj/Umrah million pilgrims has been set for 2030. A string of mega projects is planned, including the $500 billion Red Sea coastline project, the Neom megacity, the entertainment, sports and cultural destination Qiddiya, and the luxury destination Amaala.
Abdullah bin Nasser Al-Dawood, group CEO of Al Tayar Travel Group: “We believe it will happen this year. We would be happy to welcome you.”
When I asked Abdullah bin Nasser Al-Dawood, group CEO of the kingdom’s leading travel company, Al Tayyar Travel Group, when I could visit his country as a tourist, he said, “We believe it will happen this year. We would be happy to welcome you.”
Al Tayyar Group itself announced a transformation plan in December 2017.
Al-Dawood said that Al Tayyar had moved from being a traditional player reliant on government corporate contracts to a company that’s investing in technology and talent to serve all travel segments including leisure and Haj and Umrah.
He said, “The government corporate segment is worth about 130-140b Saudi Riyal (SAR), and it’s about 10% of the total market. We were leading in this segment but we were reliant on it.
“What we did was we looked at all markets and saw all the exciting changes going on – the changes in the global travel market, agencies evolving from airline ticket suppliers to holiday advisers and online booking service providers and the Saudi market itself undergoing massive social and economic transformation and that travel will be a key beneficiary – and therefore we are undergoing strategic transformation to adjust to these changes.”
The OTA business was identified as a principal growth engine and since then the group has been busy executing on its vision to be the leading travel platform for Saudi as well as in markets it is planning to expand to, with Al-Dawood singling out UAE (where it operates the Tajawal brand) and Kuwait.
In January this year, it acquired the remaining 40% stake in Almosafer for US$18.66 million (70 million SAR). It acquired the first 60% in 2015 for 22.5 million SAR. Its plan is for Almosafer to be its leading consumer travel brand.
Al-Dawood estimated that consumer travel formed about 20-30% of the total market “and this is why we have been diligently growing the Almosafer brand to capitalize on the consumer market”.
He said online sales booking volume in 2018 had grown to two billion SAR and “it’s a manifestation of the company’s ability to offer complex packages to the Saudi customer”.
Al-Dawood said another reason for the decision to expand to other travel segments was to achieve economies of scale. “You can’t build a longterm viable business on one segment. That’s why we have been building robust platforms to serve the whole travel market. ”
On its decision to acquire the remaining 60% stake in Almosafer, Al-Dawood said, “Almosafer has immense brand recognition and loyalty in Saudi. For us to build on the success of the brand, we needed to take full ownership and to take the lead to build a fully-fledged platform. To do that, we needed Almosafer to be connected to our robust platform.”
Asked what his vision was for Almosafer – and if there were role models in the West such as Booking.com or Expedia or Ctrip from China he looked to – he said, “We want to build something unique for our market, something different that will fit the needs of Saudi customers – a more streamlined offering across digital and retail touchpoints – rather than mirror other platforms. We have a sophisticated data team and robust and strong product teach team building solutions tailored for our markets.
“We will take an omni-channel approach to deliver across diverse user journeys under the Almosafer brand name.”
Its transformation plan called for revamped retail outlets, from flagship travel shops to kiosks in shopping centers, and it currently has 100 outlets across 30 cities in Saudi. Al-Dawood said it would also take the omni-channel approach when it expanded to other markets outside Saudi.
Since its transformation plan was announced, the group has invested in three areas – marketing and customer acquisition, winning retail market share (Al-Dawood said it has grown from zero OTA market share in 2015 to 50% today) and talent.
“Talent is extremely important. We started the Jadarah (meaning ability) programme to offer opportunities to talented local candidates. We want to play a role in the kingdom’s vision of creating the next generation of leaders. We have just completed the first programme and are starting the second round soon.”
Jadarah is a six-month intensive programme by which industry giants such as Google, Twitter, Amadeus, Facebook and Udacity works with the Al Tayyar Strategic Online Business Unit to give young people an insight into their businesses and provide them with tools to strive for their own success.
“Our business is very complex and we need talented individuals to lead us into the new digital age.”
The group has a total workforce of 3,500 across offices in Riyadh, Egypt, Dubai and the UK.
Asked to cite exciting trends taking place in the Middle East online travel space, Al-Dawood said mobile was a key area – Saudi is reported to have 129% mobile penetration.
“People want to book anywhere, anytime which is why Almosafer launched its app two years ahead of its website. We also have a big focus on personalisation. Consumers are very sophisticated and we understand their usage patterns and behaviours and so we can create personalized experiences with relevant offerings.”
He’s also excited about the Haj/Umrah target of 30 million pilgrims by 2030. “We are in a unique position to deliver end-to-end business solutions for pilgrims worldwide.”
The imminent opening up of inbound tourism as well as boosting of domestic travel will also open up huge growth opportunities for the group. “We are working on creating packages and travel solutions for domestic and inbound.”
Another catalyst for travel has been low cost airlines. Saudia launched its low cost subsidiary, flyadeal, on September 2017 and since then the airline has flown over three million passengers, 95% of whom book direct of whom over 50% book on mobile, according to CEO Con Korfiatis who spoke at the CAPA conference in Singapore last month. In the last two years, three new airlines have launched services in the Kingdom, he said.
Said Al-Dawood, “They provide another catalyst to provide affordable travel to consumers. The more suppliers that come into the market, the more we can connect them with consumers, the better.
“We have one million hotels, 450 airlines and tours & activities on our platform – that’s our key value proposition, to connect all sorts of suppliers across the world to our consumers in the Saudi market.”
Asked if it was eyeing other acquisitions to expand its business, Al-Dawood said, “We will continue to invest to deliver the right value to exceed our customer expectations. We have no specific acquisition in mind but if needed, whether it’s new tech or new solutions, we will not be shy of making that investment. We have big targets ahead of us, and we want to achieve that by all means.”
Note: Key executives of the Al Tayyar Travel Group will be speaking at WiT Middle East, Dubai, on April 9 to share more specific plans on its expansion. Sign up here.
• Featured image: The team at Al Tayyar Travel Group
