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Saudi Arabia’s largest online travel agency, Almosafer, hopes the kingdom’s online travel market will stage a furious comeback from its pandemic collapse, lifted first by record domestic Saudi leisure tourism and followed by a pickup in demand for international leisure travel later.
A new survey of more than 2,100 Saudi nationals and about 900 other nationalities has highlighted the dynamics at play. Released on Wednesday by Almosafer, the study found that about 83 percent of surveyed consumers were planning to travel internationally this year, mostly for vacation. Top desired spots include Sarajevo, Dubai, Cairo, and the Maldives.
Saudi Arabia historically struggled to win over both domestic and international tourists due to societal limitations, including a strict no-drinking policy and restrictions for women. Riyadh hadn’t welcomed international tourists for so long that its infrastructure remained underdeveloped. Even locals complained of a lack of venues.
Until last year, authorities forbid local restaurants and malls from playing music. Although officials eased some of these restrictions, much of that doesn’t apply to residents. Because the local culture doesn’t allow for much intermingling between the sexes, most Saudis enjoy the freedoms of being in unknown territories in cities such as Dubai, Cairo, London, or Paris.
Yet the post-pandemic reset in travel could be the start of a multi-year boom for travel businesses in the Gulf region.
Almosafer Looks Ahead for Saudi Travel
Gains in online technology will speed up a Saudi shift to online bookings, with an expected compound annual growth rate of about 28 percent in the next few years, according to a recent report by research firm Euromonitor International. The report forecast that by 2025 Saudi online travel intermediaries would have a market value of $12.6 billion (47 billion reals).
Almosafer claims a 60 percent share of hotel sales in the online travel agency market in Saudi Arabia. But it faces competition from the global giants as well as regional online travel intermediaries, including Rehlat, Holiday ME, and Flyin.
When it comes to the mobile app download game, Booking.com is leading in Saudi Arabia, with Almosafer in second place and Rehlat in third, according to analytics firm App Annie for data between November 2020 and January 2021.
Across the Middle East, Booking.com leads in app downloads with metasearch brand Wego a close second, App Annie reported. The Middle East market looks quite a bit skewed toward hotel-heavy brands like Booking.com, which are doing better now on a relative basis because, with borders closed, many people aren’t flying as much.
Almosafer’s Changed Strategy
Almosafer’s parent, Seera Group, is better capitalized than its regional rivals. It plans to make Almosafer, which it wholly acquired in 2018, stand out in the market as a human and digital provider. It believes that some Saudis will want a mix of human agent help and online tools to book travel, especially international travel.
“Saudis will book on their own a routine trip between, say, Riyadh and Dubai,” said Muzzammil Ahussain, executive vice president at Almosafer. “But when they plan to visit an unfamiliar destination, especially internationally, they often want to speak with someone who is a Saudi like themselves and who can guide them through the complexities — whether it’s related to visas, currency, or booking activities.”
Almosafer has been working to become an “omnichannel travel agency” with an integrated technology platform across points of sale.
Since 2019, it has opened about 50 branded Almosafer retail offices across Saudi Arabia. A few months ago, it launched its first Almosafer shop in Kuwait, where it’s pursuing expansion.
“Our stores aren’t like traditional agencies,” Ahussain said. “They deliver immersive content experiences.”
The company connects all its agents to the same tech system, including agents who work in its call center or who help answer more complicated WhatsApp chat queries that chatbots can’t. Whatever a customer sees on Almosafer’s site or app, they can find that travel content or service in an agency store.
But some products are not available online because the market isn’t yet ready. For example, customers have to speak with an agent to book most domestic tours and activities in Saudi Arabia. That reality reflects a need to digitize many tours-and-activities operators.
Getting direct access to inventory is another priority for Almosafer. In November, Hilton signed a direct connectivity distribution deal with Seera Group, giving it access to Seera’s channels, such as Almosafer and Tajawal, to sell its 6,300 properties worldwide.
Almosafer is considering regional expansion.
“We’ll look at nearby countries such as Bahrain, for example,” Ahussain said. “But we don’t see ourselves opening in more distant international markets right now.”
During the pandemic, Almosafer had to reduce some of its staffing. Government aid to businesses helped soften the blow. It continued to run a training academy to help hundreds of Saudi nationals stay current on their tourism-related professional skills while the public health crisis paused international travel.
Before the pandemic, Almosafer relied heavily on social media and influencers as well as traditional brand advertising. The company expects to use a mix of those channels, plus performance marketing with ads on Google as the travel sector recovers.
Now, throughout the pandemic recovery period, the app may have to rely on Saudi tourists looking to travel beyond the kingdom. That’s because tourism in Saudi Arabia was practically non-existent even before the coronavirus outbreak — with the exception of religious tourism to Mecca and nearby Jeddah.
Seera Group has been investing in its customer relationship management and loyalty software to improve how well it re-engages with past customers and drives more direct bookings. Almosafer has also invested in a customer data platform, also called a data lake, to unify its information on customers held in multiple databases. (For context on how a separate division of parent company Seera Group is digitizing Saudi corporate travel, see our November story.)
The kingdom still has high hopes for international tourism as a way to diversify its economy and show off its remarkable landscapes, cities, and world-famous landmarks. Saudi Arabia has launched a global tourism campaign that strives to draw 100 million annual visitors by 2030. For more on the Saudi domestic tourism boom, see our September story.
Tajawal in the UAE
Almosafer’s sister brand is the online travel agency Tajawal, which focuses on ex-pat Saudis living in the United Arab Emirates (UAE). Tajawal uses the same tech platform as Almosafer.
In the UAE, the mobile app download leader is Booking.com, with Agoda and MakeMyTrip following close behind, App Annie estimated. On the web, Cleartrip receives the second-most visits after Booking.com in the UAE, according to SimilarWeb.
Before coronavirus, Tajawal engaged in fierce discounting with rivals like the Sharjah-based Musafir on air travel and hotel packages.
The UAE market is different in many ways from Saudi Arabia, particularly with its large percentage of expatriate workers and its assertive push on a coronavirus vaccination program. So far, UAE has vaccinated 6.2 million — or more than 60 percent of the population.
“The UAE feels safe and is offering free vaccination to all residents,” said Irfan Ahmad, CEO of digital media sales agency Dotcom Arabia
The aggressive vaccination policy is geared toward opening up for foreign tourism in time for the October 1 launch of Dubai Expo 2020, Ahmad noted.
The Gulf region broadly may be one of the first outbound travel markets to recover from the pandemic.
“Many national tourism organization partners have destination re-launch campaigns locked and loaded and ready to execute as soon as borders re-open,” said Ross Veitch, CEO of Wego.
“The budgets being allocated to these recovery campaigns are surprisingly high by historical standards,” Veitch said. “That reflects the importance of the tourism industry in many destinations but also the increasing power of targeted digital channels as the region shifts from offline to online.”