The Middle East Is The “Golden Goose” Of Travel: Opportunities Revealed At WiT ME
Movers and shakers of the Middle East online travel industry gathered at WiT Middle East 2019 in Dubai on April 9 to share their plans to unlock the potential of a fast-changing market being driven by youths – 60% of consumers are Millennials and Gen Z, strong spending power and technology developments.
With the global online travel market valued at $638b in 2018, the Middle East currently accounts for a small share, said Mona Faraj, Managing Director of Insight Out Consultancy, presenting the Middle East Online Travel Report from Phocuswright, but that is set to grow, as mobile penetration increases with UAE and Saudi Arabia among the world’s top 10 online travel leaders and a young population leapfrogging desktop to embrace the immediacy of mobile.
The promise of the market has lured global online travel brands such as Booking.com and
Expedia, as well as brands that have grown up in similar emerging markets such as Africa, South-east Asia and India – all of whom gathered to speak at WiT Middle East which fielded close to 40 speakers and attracted more than 200 delegates.
Stephan Ekbergh, CEO of Travelstart, the Scandinavia and Africa-based OTA that is expanding in the Middle East, called the region the “golden goose” of travel. “It is exciting to be here at this time; so much is happening in the region, and it’s just early days.”
Ross Veitch, CEO and Co-founder of Wego, said the South-east Asian based travel search brand entered the Middle East six years ago in search of a high growth market and its entry has paid off. On the back of the Middle East, the company, founded in 2005, has reached US$1b in gross bookings and tipped over to profitability 18 months ago.
Stuart Crighton, CEO and Founder of India-based Cleartrip, which entered the Middle East nine years ago and acquired Saudi Arabian OTA Flyin last year, said a customer transformation was underway in the region with consumers moving online, driven by the high mobile penetration and the growth of low cost carriers.
“Middle East online travel is getting exciting. The region is undergoing a shift to mobile from desktop for search and book, and we have already launched our best in class Mobile APP and PWA site to offer superior experience for our consumers.”
Key to unlocking the potential is technology solving one of the critical pain points in ecommerce in a fragmented market – cross-border payments. Remo Giovanni Abbondandolo, VP of Business Development for MENA (Middle East & North Africa) for global payment solutions provider, Checkout.com, said there’s growing trust in online payments as consumers get used to the convenience. “We are seeing the use of cash decline across the region. Now for many of our merchants, cash no longer represents the preferred method of payment for their customers.”
He said, “The introduction of a legislative framework paves the way forward for greater online payment adoption in the region. This serves to open the market up for brands, especially online travel agencies. UAE seems to be leading the way on this, but we are also seeing similar trends in countries such as Saudi Arabia after the introduction of Mada for online payments and overall ease of doing business in the country.”
Among homegrown brands, all eyes are on the Al Tayyar Travel Group which is reinventing itself with investments into the online travel sector. Muzzammil Ahussain, Executive Vice President, said the group was investing into making Almosafer, a company it now fully owns after buying the remaining 60% stake this year, the consumer-facing travel brand.
He said the group was keen on growing both organically and via acquisitions and had strong interest in the alternative accommodation sector, which is booming globally, as well as the tours and activities segment which has seen almost US$400m raised by startups in the last four years.
Other homegrown brands such as Kuwait-based Rehlat and Dubai-based Holidayme have sights on expanding outside their home bases. Bader Al-Bader, CEO & Founder of Rehlat, said that while the company intended to dig deeper into its home market, it also wants to expand across the GCC.
Holidayme has merged with Malaysia-based Tripfez to enter new Muslim markets in Southeast Asia. The company has developed an Umrah product which combines holiday packages with visa approval, a pain point in online travel. CEO of the new Umrah business, Mohammed bin Mahfouz, said the product took 18 months to develop and, since its launch earlier this year, has seen positive traction by customers.
Saudi Arabia’s target of reaching 30 million pilgrims as well as the kingdom’s intention to boost domestic tourism and open up for inbound leisure tourism by 2030, will open up a huge market for online travel brands. “We want to make sure we are part of that growth,” said Al Tayyar’s Ahussain.
Walid Mansour, Partner and Chief Investment Officer of MEVP, a key investor in Wego, said the climate was healthy for funding of start-ups in the region and the fund is interested in the offline-online migration of traditional businesses. MEVP has declared online travel as a segment it is interested in.
Said Yeoh Siew Hoon, Founder of Singapore-based WiT, which organises similar conferences in Singapore, Seoul, Tokyo, Malaysia and Amsterdam, “The trends in the Middle East parallel what we have seen in South-east Asia – young population, high mobile penetration, a thirst for travel and the arrival of global and regional brands and the rise of local travel players. It’s a super exciting time to be here.”
