Mideast online travel bookings grow unabated

14 Dec 2011

Regional travel agents begin to diversify and develop online capabilities; ATM 2012 to launch dedicated technology seminars to share technological insight

The region’s travel agents are diversifying their traditional booking channels in the face of increasing competition from technology as business and leisure travellers make the move from offline to online bookings buoyed further by improved internet transaction security.

According to Reed Travel Exhibitions, organiser of Arabian Travel Market (ATM), travel agencies are not only confronted to the online booking capabilities of major regional airlines, but also face the growing number of Online Travel Agencies (OTAs), which are pursuing aggressive development agendas and investing millions of dollars into promoting one-stop online booking portals.

“The Middle East travel community is still very much people focused. However, online booking functionality is the norm now within the regional airline community and this is leading the shift in mindset on both the part of the consumer and a growing number of the region’s travel agencies,” remarked Mark Walsh, Group Exhibition Director, Reed Travel Exhibitions.

“The region’s travel sector is now at an important crossroads, where the desire to retain long-standing customer relationships is in a stand-off with the pressing need to embrace Internet technology in order to ensure commercial survival,” he added.

This prompted Reed to develop a dedicated technology seminar series to be launched at ATM 2012, where a host of leading digital experts specialising in the travel sector will address delegates regarding the latest in technological advances and online consumer behavior. In addition to this industry analysts will provide invaluable insight into digital trends.

While technological advancement is accelerating, many travel IT experts believe that companies in the Middle East are languishing up to five years behind other international markets, despite having one of the fastest growing internet populations in the world.

E-commerce in the Middle East is currently believed to be valued up to US$100 billion and is widely acknowledged to be one of the fastest growing regions in the world having surged tenfold since 2001. A high proportion on this estimated online spend can be attributed to the travel and tourism sector given the restrictions to general online shopping in the Middle East.

According to Expedia, the number of online travel bookings in the Middle East is forecast to double in the next five years, up from around 20 to 25% currently, adding it has seen a noticeable increase over the last two years.

However growth in the Middle East is still playing catch up with other regions such as Europe, despite concerns over the mounting debt crisis there. Online travel agency Priceline said its third-quarter international bookings jumped 73% with most of the increase coming from Europe, according to analysts. Expedia’s third-quarter international sales, which include Europe, jumped 24% compared with 7% for the U.S.

OTAs such as uflyonline.com, yalago.com and cleartrip.ae are reporting increasing levels of interest and growing number of visitors to their sites; but the online movement is also being driven from within the industry with a number of traditional agencies looking at adding an online element to their business. The development of complementary online products in order to offset potential declines in revenue streams as travellers go direct is a pivotal decision facing key industry players in the region.

The implementation of new technology is also being affected by operational concerns such as supporting functionality and out-of-date back office systems, and is further compounded by banking sector issues including high credit card charges and the prevalence of debit cards; all of which will be debated by experts from both sides of the table during ATM 2012.

“The trend towards online transactions is an inevitable one. We want our technology seminar series to both inspire the industry and communicate the benefits of embracing technological change while, at the same time, ensuring that the business of travel remains a very personal one,” concluded Walsh.

Arabian Travel Market 2012 will be held at the Dubai International Convention & Exhibition Centre from 30 April – 3 May 2012. For more information, go to www.arabiantravelmarket.com  

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