The sweet sound of "profit" seems to be making a slow and steady return in the earnings calls of travel companies in the Middle East.
Saudi Arabia’s increasing focus in the tourism sector and the shift to leisure travel has brought Seera Group from the red to report the company’s first post-pandemic operating profit of $8 million in the third quarter.
A majority of the $1 trillion investment that the country has earmarked for developing the Saudi tourism economy has been deployed for the leisure segment.
Seera noted that leisure travel drove the growth of the consumer travel segment fuelled by the removal of almost all pandemic-related restrictions across the world.
Seera’s return to profit illustrates the incredible recovery of travel and our strategic positioning to capitalise on the pent-up demand, said Majed Alnefaie, CEO at Seera Group.
To capture this pent-up demand, the company in December last year had transformed its portfolio to create the largest travel business in the Middle East with the integration of its verticals under the umbrella of Almosafer.
Saudi Arabia’s sovereign wealth fund — Public Investment Fund — also picked up a 30 percent stake in Almosafer for $412 million in September as part of its plans to diversify into other sectors.
For Seera Group, consumer travel registered record-high levels of gross booking value and revenue in the third quarter compared to the previous quarter.
The segment recorded a 167 percent increase in gross booking value to $320 million in the third quarter compared to the same period last year with revenue going up 135 percent to $22.5 million.
While London, Paris, Dubai, Cairo and Sharm El Sheikh rank as top outbound destinations among Saudi Arabian travellers, Seera noted that destinations such as Thailand and Turkey are also getting increasingly popular.
Seera’s consumer travel segment has also signed partnerships with international travel boards, including the Tourism Authority of Thailand.
As the company focuses more on digitising travel management in Saudi Arabia, Seera noted that its corporate travel arm Almosafer Business has also onboarded new corporate, government and semi-government clients.
The company reported a significant increase in revenue for its Hajj and Umrah tour operator Mawasim following Saudi Arabia’s announcement earlier this year permitting people with tourist visas to perform Umrah during their visit to the country.
The increased demand from pilgrims for its Mecca properties has also contributed to the growth of Seera’s hospitality business.
In an earlier interview with Skift Muzzammil Ahussain, executive vice president of travel at Seera Group, had said that through Mawasim, the company is not just looking to meet the demands of travellers for Hajj and Umrah but also helping them to explore Saudi beyond their pilgrimage.
Seera attributed the growth in its destination management company, Discover Saudi to the rise in the number of events and conferences taking place in the kingdom.
The company noted that the launch of the first used car showroom for Seera’s car rental business, Lumi, has further diversified the company’s offering.
With a fleet of over 19,000 vehicles, Lumi’s policy of selling vehicles that reach two to three years of age enables the company to maintain a young fleet.
The company last month reported that it has sold over 2,000 vehicles this year and is set to drive the sale of more than 5,500 vehicles in 2023.
Last month, Seera announced that it has partnered with the Saudi Air Connectivity Program to operate inbound charter flights from Dubai ,Kuwait and Doha during the peak winter periods.
The weekend flights operational from November 2022 through to March 2023, would offer extra capacity to short-term visitors.
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Photo credit: The city of Al Khobar in Saudi Arabia Seera Group