"We're still doing really well," said Jehangir Shahezad, GM, Space Travel Agency. "I would say that for us, the Internet has caused a reduction in ticket bookings from two to three percent. However, we find that people are still reluctant to purchase tickets directly from airline sites. I had a senior executive telephone from South Korea last week and insist that we had to book a ticket for him and then send him the details. I advised him that he could book the ticket online with his credit card, but he refused."

Saudi banks have difficult policies when it comes to credit card usage. Fraudulent credit card charges must be disputed immediately or the risk of the customer being stuck with the liability for those charges rises. At the minimum, the credit card will be cancelled and reissued the moment fraudulent charges are detected. This could leave a Saudi on a trip abroad without access to his credit cards for other essential purchases. Consequently, many Saudis won't use their primary credit cards online because they believe that the risk of card fraud will increase. Credit cards issued by Saudi banks especially for online use, generally have limits too low to allow an international airline ticket purchase.

"Let's be clear though," commented Shoaib Malik of Najd Wings Travel. "Just because this market doesn't buy travel services online doesn't mean that they don't use the Internet in regards to travel services. People do a lot of research online before they come to us. Travelers are much more aware of the ticket and hotel prices before they walk in the door of an agency. I would say that has impacted our profits by ten percent."

Malik remarked that travel agencies are still popular because there's a language barrier between the travelers in the Kingdom and what's available online, particularly when it comes to the terms and conditions of various offers. Customers trust that the travel agent will explain all the penalties and regulations in regards to a travel product purchase. The "fine print" in online deals scares them away from such purchases. Additionally, if there's any possibility that travel plans might change, people don't want the hassle of trying to deal with the airlines' offices — a necessary evil if the purchase was made online.

The summer rush has already begun and the agents' offices are full every evening. Malaysia, Turkey and  Dubai are the big winners this year. Turkey is extremely popular in part due to the outdoor scenes from Turkish soap operas broadcast in the Kingdom. High income families are still going to Europe, especially the UK. People would like to do more domestic tourism, and flights to Abha are already packed from mid-June through mid-July. Casablanca is the destination of choice for Saudi bachelors this summer. Saudi travelers are shunning Tunisia and Lebanon, and bookings to Egypt are dramatically down. The agents Arab News interviewed stated that they've only sold tickets to Egyptians returning home for their holidays. Some agents are trying to capitalize on that situation. One offer put out this week through email is advertising a package consisting of an economy class airline ticket from Dammam, seven nights in a 4-star hotel with daily breakfast and private airport transfers for SR4,842. Such a package would have been just a dream in May 2010.

"Due to the popularity of the Internet, people have more exposure to travel resources than ever before," said Mohammad Nazim Maniar, sales manager, Attar Travel, Al-Khobar. "They cross check ticket and hotel prices and do a lot of homework before coming to a travel agent. Now we not only compete with other travel agents, we compete directly with the airlines for customers. The airlines promote their online offers very aggressively. It isn't well known that travel agents no longer make commissions from most airlines for ticket bookings. This means we have to charge 30 to 50 riyals more than an airline's website to issue the same ticket and cover our costs."

Maniar said that many Saudi companies now book and purchase all the domestic flight requirements for their staff using the Nas Air or Saudi Arabian Airlines websites. There is less of a willingness to purchase international travel requirements online, but he has seen that international travel companies such as Expedia and Booking.com are beginning to gain customers in the Saudi market, particularly among executives who have a good command of English and who are more Internet savvy. Attar is able to compete because every one of their agents has at least eight to ten years experience and can add value to the customers' travel plans.

"I think the future for travel agencies is good, but the future of their former business model is not. Like everyone else these days, travel agents  are having to rethink the way they do business, find new products to sell and package, work out new remuneration schemes and find ways to establish customer loyalty," said Imtiaz Muqbil, executive editor, Travel Impact Newswire. "Travel Agents are only the 'middle-men.' They do not have 'ownership' of any of the products they sell. But the vast number of new products emerging on the world travel market opens up terrific opportunities for creative ways to package and sell them. Of course, this means the agent has to remain constantly abreast of changing prices, conditions and other complexities that are becoming much too commonplace in the world of travel. Personally, I think it's better to use a travel agent, especially for complicated tours and holiday packages. Simple bookings like single-itinerary flights and limited-period hotel stays are best done yourself, especially if the customer is part of a loyalty scheme."

Ali Al-Yami, Al-Khobar Branch Manager, Dreams Holidays Travel and Tourism has a straightforward idea for how local travel and tourism companies could attract more customers and thrive.

"Companies need to find ways to hire and train Saudi travel agents. I know that's tough due to the working hours, but for us it's key. Saudi customers open the door of our agency, see my shemagh and are willing to wait in line to be served by me," he asserted. "I provide excellent service. I spend a lot of time checking out the best offers and reading the reviews on the Internet. The day after every one of my customers returns from a trip, I telephone him to see how it was. It makes him feel happy that someone cared about his holiday and I get all the information about the good and bad aspects of his trip. Saudis don't want to struggle to have a great vacation. They want to come in, give me the parameters for their trip and have me quickly create an amazing personalized vacation. The Internet can't do that."