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PROVAB TECHNOSOFT AT ARABIAN TRAVEL MARKET
17
Jun

The online travel market in Arabian Gulf is set for a boom driven by a young and tech-savvy population, increased internet connectivity and high smartphone penetration. It is projected to grow at least 20 per cent every year for the next five years. These travelers have high expectations, demand personalized offers and do extensive online research for Gulf before purchasing.

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PROVAB TECHNOSOFT AT ARABIAN TRAVEL MARKET
PROVAB TECHNOSOFT AT ARABIAN TRAVEL MARKET

 

The online travel business in Gulf is expected to rise and the market remains relatively untapped compared to global growth. The online travel sector in Gulf accounts for 5 percent of the GCC travel market compared to the worldwide average of 12 per cent. Potentially, this could mean a boom in the e-travel industry, which may log in 2.5 times growth. The digital infrastructure in the region is improving with internet connectivity rates in the GCC crossing 90 per cent in countries such as the UAE and Bahrain, while rapidly expanding in other demographic heavyweights like Saudi Arabia.

When choosing the destination for vacations there are several criteria for Middle East

travelers:

Safety: This is a major concern for all travelers, however during Focus groups, it became apparent that safety was viewed as the direct responsibility of the Male for the rest of the family for Arab Nationals

Nature & Weather: Luxury and green landscapes are definitely attracting Middle East travelers along with cooler temperatures in summer

Multiple activities suitable for the household: Travelers are cautious about the destination being able to cater for all family members and children in particular. Availability of entertainment parks,shopping, choice of restaurants for foodies, sightseeing and other cultural activities, are part of the criteria for selection of the destination

Warmth & friendliness of the host country: The emergence or success of some Asian destinations e.g Thailand relate to the nature of the warmth and sincerity of the people/culture. Middle East

Travelers need to feel ‘welcomed’ :Some European cities are perceived negatively in this respect

Budget: Clearly a criteria at all touch points of the journey. Budget triggers most of the decisions for all Middle East travelers irrespective of their nationality or country of residence

New airlines and increased low cost carrier (LCC) routes are supporting the emergence of new destinations

Visa agreements promoted by word of mouth is also supporting new destinations

Business trips are generally intra-regional (based on travel trade interviews)

Revisiting destinations : Some travelers prefer to return to the same destination frequently as is the case for GCC Nationals re-visiting European capital cities, or for all travelers visiting Dubai.

Couples are generally more flexible on destination and advice. With more than two travelers, there is less opportunity to influence destination as many parties have to be in agreement

The online travel market growth rate is well above the conventional travel market which is progressing at four per cent per year. There are a wide range of online travel portals that are available worldwide today, however, it is up to the customers to select the right one for them. Customers who intend to travel point to point may find it easier when booking online, since they have the origin and destination pre-decided. The challenge occurs while booking online across multiple sectors. The scenario is different as most of the online travel portals provide limited information. Compared to booking just flights tickets, customers prefer to have a bit more human interaction when booking or planning the complete holiday package since it involves gaining additional information, which is needed to ensure that they have a pleasant stay, and become a returning customer of that online travel portal.

Presently, the online travel sector only accounts for five per cent of the total GCC travel market, compared to the global average of 12 per cent. Potentially, this could mean a boom in the e-travel industry which may log in 2.5 times growth. Demographic changes and changes in consumer preferences are largely shaping the upsurge of the e-travel market. The growth in the e-travel sector is expected to come from the larger number of young and tech savvy travelers who embrace the digital ecosystem to plan and book their journeys. These travellers have high expectations, demand personalized offers and do extensive online research before purchasing. Our estimate shows millennials at 20 million, accounting for a massive 40 per cent of the GCC population, which further indicates a growth in expected demand by this segment.

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The advanced digital infrastructure in the GCC region is another driver for growth and a key catalyst as the region embarks on long-term advancement from its current low e-travel activity base. The Internet connectivity rates in the GCC have crossed 90 per cent in countries like the UAE and Bahrain, while rapidly expanding in other demographic heavyweights like Saudi Arabia. Along with high connectivity, smartphone penetration in the GCC stands at more than 75 per cent, a number which is among the highest in the world. Smartphones are the most popular devices for researching travel offers and online information, and the mobile travel market is expected to further expand the digital travel space in the GCC.

In 2019, there will be a number of airlines that will start flying to the UAE, and on the other hand, UAE based carriers will continue to expand their network. Therefore, we are expecting 2019 to be a strong year for the travel sector. The growth in the airlines network he said, will lead to destinations becoming cheaper, and this will further expand the choices of places to visit for consumers. We have seen a slight increase in traffic to the UAE year-on-year and we expect this to pick up in 2019. “In January, the government of Dubai made an announcement of refunding bank guarantees, which will further help drive growth in the emirate’s thriving tourism sector. This capital injection will allow tourism firms to enhance their offerings, and will lead to an increase in international visitors. Mobile has become the most dominant channel for travel bookings in the GCC. Travel packages for families also continue to be popular, and we also witnessed an increase in holiday packages for a group of friends, especially for short getaways. Based on our research, consumers continue to look for travel packages with good value.

Online travel packages continue to enjoy a surge in popularity across the UAE and the GCC, driven by travellers looking for a good deal and flexibility in their booking options. The smartphone penetration in the GCC for Gulf stands at more than 75 per cent, which is among the highest in the world. Smartphones are the most popular devices for researching travel offers online, and the mobile travel market is expected to further expand in the GCC. As a result of the digital infrastructure in the Gulf, the travel industry of Arabian Gulf is undergoing massive changes. Now the consumer appetite has changed from offline to online booking. The governments in the GCC are promoting tourism in the region and have identified the sector as a major part of their long-term vision for economic growth, both from leisure to business travel as well as foreign and domestic travel.

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