Will COVID-19 Zoom meetings spell the end of business travel?

Will COVID-19 Zoom meetings spell the end of business travel?
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Amit Taneja, Chief Commercial Officer of Cleartrip
Will COVID-19 Zoom meetings spell the end of business travel?
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There are signs of optimism for the business travel industry, which, according to the World Travel and Tourism Council, made up 0.7 % of global GDP in 2019. (Reuters)
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Updated 11 March 2021

Will COVID-19 Zoom meetings spell the end of business travel?

Will COVID-19 Zoom meetings spell the end of business travel?
  • The pandemic has meant executives have become used to not having in-person contact with clients

DUBAI: A survey of 5,678 respondents living in the UAE and Saudi Arabia has offered much-needed hope to the travel and hospitality sectors. Carried out by online travel agency Cleartrip, it found that 72 percent of respondents said that they were happy to travel within the next six months once safety procedures were in place and restrictions lifted.

Digging deep into the results, while 70 percent said they were looking to travel to see family and friends, only 1 percent said that this was for business purposes.

With employees stuck at home and not seeing colleagues, let alone clients, does this mean that the rise of Zoom calls and online meeting platforms will do away with the need to travel to meet clients in person?

“Yeah, definitely, I think corporate business travel is going to see a sea change, which probably would have taken, you know, a decade or so (before COVID-19),” Amit Taneja, chief operating officer of Cleartrip, told Arab News, adding that the rise of video conference meetings with clients had accelerated the demise of business travel.

The impact on the region can be seen in the monthly poll by the US-based Global Business Travel Association (GBTA), which found that in February, 63 percent of respondents said that they had canceled all business trips to the Middle East because of restrictions related to COVID-19, with only 2 percent saying they had not canceled travel.

Looking to the future, just 7 percent of respondents in the February GBTA poll said that they planned to resume travel to the Middle East in the next three months. While 44 percent said they may travel to the region again, they had no timeframe in mind, and 28 percent said they had no plans to travel.

In August 2020, global consultancy firm McKinsey carried out a study into the corporate travel sector. It concluded that “given the volatility of business-travel patterns, on top of significant modern technological and connectivity advancements, the economic disruption from the COVID-19 pandemic will have critical implications for the rebound of business travel — and indicates a long road ahead for the sector.”

However, there are some signs of optimism for the global business travel industry, which, according to the World Travel and Tourism Council (WTTC), made up 0.7 percent of global gross domestic product in 2019 and has doubled in size in the past 20 years to be worth roughly $1.28 trillion.

This week, a survey by the International Air Transport Association (IATA) found that more than a third of respondents said that they could not do business normally without air travel. “People want to get back to travel, but quarantine is the showstopper. As testing capacity and technology improves and the vaccinated population grows, the conditions for removing quarantine measures are being created. And this points us again toward working with governments for a well-planned reopening as soon as conditions allow,” said Alexandre de Juniac, IATA’s director general and CEO.

The McKinsey report predicted that travel for conferences and large-scale meetings will recover, but not until well into 2021. Cleartrip’s Taneja was confident that while trips to meet clients might not recover, travel for conferences, networking events and team building sessions would come back.

“People didn’t necessarily need to travel to meet your clients or meet your team in different parts of the world,” he said, but added that what we will “probably see a bigger surge in is the conference kind of travel.”


ESG investing makes business sense: Saudi PIF chief

ESG investing makes business sense: Saudi PIF chief
Updated 12 min 22 sec ago

ESG investing makes business sense: Saudi PIF chief

ESG investing makes business sense: Saudi PIF chief
  • The PIF has already incorporated ESG principles into its $400 billion worth of global investments as the sector gains in prominence throughout the region

RIYADH: Saudi Arabia’s Public Investment Fund (PIF) Governor Yasir Al-Rumayyan said that environmental, social, and governance (ESG) programs made solid business sense in the Kingdom and worldwide.
“Such action not only helps in protecting climate but also helps economically,” he said during the Future Investment Initiative (FII) Institute’s ESG virtual event on Thursday.
The PIF has already incorporated ESG principles into its $400 billion worth of global investments as the sector gains in prominence throughout the region.
Al-Rumayyan, who also chairs the FII Institute, said that ESG investing should grow in tandem with the sustainable development goals (SDGs) which were adopted by UN member states in 2015 as a universal call to action to end poverty and protect the planet.
“We need to work together on mobilizing ESG for a sustainable future,” he told delegates.
Developing the renewable energy sector was crucial to reducing emissions, he said, highlighting the Fund’s work with ACWA Power, a leading global player in the renewables sector. The PIF in November increased its stake in the company to 50 percent, part of a move to support the wider renewables sector in the Kingdom.
ACWA Power is planning an initial public offering and heads a consortium that will build and operate renewable power-based utilities at the Kingdom’s flagship Red Sea tourism project.
Al-Rumayyan also referred to the Saudi Green Initiative and Middle East Green Initiative to reduce carbon and contribute to protecting the planet as an example of the Kingdom’s progress, which were announced by Crown Prince Mohammed bin Salman in late March.
The green initiatives aim to reduce carbon emissions by 60 percent in the region and deliver the world’s biggest afforestation project. The tree-planting project will be double the size of the Great Green Wall in the Sahel region, the second-biggest regional forestry initiative. The initiative will also work to increase the percentage of protected land to more than 30 percent, exceeding the global target of 17 percent per country.
It aims to reduce carbon emissions by more than four percent of global contributions through renewable energy projects that will provide 50 percent of the Kingdom’s electricity production by 2030.
The initiative is expected to eliminate more than 130 million tons of carbon emissions by using clean hydrocarbon technologies.
The PIF governor said such initiatives represented a clear and ambitious roadmap and would contribute to achieving global targets on combating climate change. He said the Kingdom will raise vegetation cover, reduce emissions, and preserve marine life as part of its efforts to deliver a more sustainable future.
Thought leaders in sustainable investment gathered virtually in Riyadh on Thursday to explore one of the hottest topics in the world of finance — the move to environmental, social and governance (ESG) benchmarks by big global investors.
The event, under the auspices of the Future Investment Initiative (FII) Institute, focuses attention on sustainable investment in the post-pandemic recovery, and the role of emerging markets like Saudi Arabia within the new investment philosophy.
ESG investing has recently taken off, attracting hundreds of billions of dollars into funds that pledge to weigh broader considerations when deciding where to put their money, rather than mere cash returns.
Richard Attias, chief executive of the FII Institute, said: “Although ESG has proven its worth, much remains to be done to ensure we use it to its full potential. The low level of inclusion and participation of emerging markets in the development of ESG frameworks is counterproductive to global sustainability.
“Perhaps the most challenging task, and one that we will address during this event, is how we push ourselves to think beyond ESG as a risk management tool and deploy it to create a truly sustainable future,” he added.

 


More than 6,000 Saudi companies operating in Egypt

More than 6,000 Saudi companies operating in Egypt
Updated 28 min 48 sec ago

More than 6,000 Saudi companies operating in Egypt

More than 6,000 Saudi companies operating in Egypt
  • Saudi companies have investments of SR122 billion in Egypt

RIYADH: There are 6,017 Saudi companies in Egypt, with investments of SR122 billion ($32.5 billion), according to data from the Egyptian General Authority for Investments.

The total paid-up capital of these companies is SR82 billion, said Dr. Saleh Bakr Al Tayyar, legal counsel for the Saudi-Egyptian Business Council, citing data from the Authority.

The Kingdom ranks second in the Arab world in terms of participation in foreign projects in Egypt, and in terms of the number of foreign companies invested, he said.

Abdel Wahab, CEO of the Authority, said that obstacles to further investment in Egypt from Saudi companies, will be removed, Al Watan newspaper reported.

Trade between the two countries reached SR26 billion in 2019, Wahab said.


Jordan public debt reached 85% of GDP in 2020

Jordan public debt reached 85% of GDP in 2020
Updated 47 min 37 sec ago

Jordan public debt reached 85% of GDP in 2020

Jordan public debt reached 85% of GDP in 2020
  • External debt reached 13.7 billion dinars in 2020

RIYADH: Jordanian public debt surged by 10.6 percent in 2020 to 26.50 billion dinars ($37.4 billion) as the government spent heavily to support its economy during the COVID-19 pandemic.

Jordan’s public debt ended 2020 at 85.4 percent of GDP, up from 75.8% a year earlier, according to Ministry of Finance data. The ministry recently changed its methodology for calculating public debt, excluding obligations from the Social Security Investment Fund, which amounted to 6.67 billion dinars.

The Hashemite Kingdom’s internal debt was 12.78 billion dinars last year, while external debt stood at 13.72 billion dinars, Ministry of Finance data show.

Unemployment rose to 25 percent in the fourth quarter of 2020, with youth unemployment reaching 55 percent, according to International Monetary Fund data.

Jordan responded “quickly and decisively” in its support of the economy during the COVID-19 pandemic and is making progress on its program of economic reforms, IMF Managing Director Kristalina Georgieva said on Monday in a statement to mark the kingdom’s 100th year.

“Timely and targeted fiscal measures have helped protect jobs and the vulnerable, while equitable tax reforms – aimed at tackling evasion, closing loopholes, and broadening the tax base – have helped maintain debt sustainability,” Georgieva said.

However, the country must address high unemployment to deliver durable, jobs-rich and inclusive growth, she said.


Saudi Re aims to boost capital to fund domestic, overseas expansion plans

Fahad Al-Hesni, managing director and CEO of Saudi Re. (Supplied)
Fahad Al-Hesni, managing director and CEO of Saudi Re. (Supplied)
Updated 15 April 2021

Saudi Re aims to boost capital to fund domestic, overseas expansion plans

Fahad Al-Hesni, managing director and CEO of Saudi Re. (Supplied)
  • Despite a difficult year in 2020, Saudi Re recorded SR 60.7 million in net profit before zakat, an increase of 2 percent year-on-year

RIYADH: The Saudi Reinsurance Company (Saudi Re) on Thursday announced plans to increase its capital in order to fund its expansion plans.

Saudi Re’s board recommended increasing the company’s capital from SR 810 million ($216 million) to SR 891 million and converting SR 81 million of retained earnings into capital, giving the company an extra SR 162 million to finance its expansion plans.

Fahad Al-Hesni, managing director and CEO of Saudi Re, said in a statement: “The capital increase will strengthen Saudi Re’s capital base and support the expansion plans in the domestic and international markets. The board’s recommendation comes in line with Saudi Re’s effort to generate better returns and create a greater shareholder value.”

Despite a difficult year in 2020, Saudi Re recorded SR 60.7 million in net profit before zakat, an increase of 2 percent year-on-year.

At the same time, total assets increased 7 percent to SR 2.8 billion and total gross written premiums (GWPs) increased 18 percent to SR 935 million. International business made up the bulk of the GWP growth — up 25 percent year-on-year — while domestic business increased 8 percent.


Turkish central bank holds rates, drops policy pledge under new chief

Turkish central bank holds rates, drops policy pledge under new chief
Updated 15 April 2021

Turkish central bank holds rates, drops policy pledge under new chief

Turkish central bank holds rates, drops policy pledge under new chief
  • Lira slips 0.7% on announcement
  • Inflation could reach 19% before mid-year

ISTANBUL: Turkey’s central bank held rates steady at 19 percent as expected on Thursday and dropped a pledge to tighten policy further if needed, in its first decision since President Tayyip Erdogan fired the hawkish former governor and sparked a market selloff.
In a statement, the bank also ditched last month’s pledge to “decisively” maintain a tight monetary policy “for an extended period” to address inflation, which has risen above 16 percent and been in double-digits for most of the last four years.
The lira slipped as much as 0.7 percent to 8.125 versus the dollar after the bank under new governor Sahap Kavcioglu replaced the hawkish guidance with a softer assessment of risks to inflation that analysts said signaled interest rate cuts were on the way.
Erdogan’s shock removal last month of Kavcioglu’s predecessor Naci Agbal, a respected policy hawk, sent foreign investors fleeing from Turkish assets on concerns that rates would be quickly slashed.
But Kavcioglu — who had previously criticized Agbal’s rate hikes — has since promised no abrupt changes. Those assurances as well as the more-than 10 percent lira selloff had convinced analysts that policy would remain steady for now.
The central bank said it maintained a tight stance in the face of lofty inflation expectations, adding rates would remain above inflation until it is clear that price pressure is easing.
John Hardy, FX strategy head at Saxo Bank, said the currency had weakened on Thursday because Agbal’s pledges were scrapped.
“Any daylight they see, they are going to want to cut rates. Holding them here (today) is just an acknowledgment they can’t get away with it for now,” he said.
In a Reuters poll, most economists had predicted no change to the one-week policy rate this week, but saw easing from around mid-year, to settle at 15 percent by year-end.
Last month, the central bank under Agbal had raised rates by a more-than-expected 200 basis points to levels last touched in mid-2019 to dampen inflation and support the currency.
Before taking the job, Kavcioglu had said such a policy was wrong for Turkey and also espoused Erdogan’s unorthodox view that high rates cause inflation.
Erdogan has repeatedly called for monetary stimulus to help the economic rebound. He has fired three bank chiefs in two years, eroding monetary credibility.
The lira plunged 15 percent immediately after Agbal’s dismissal before a rebound, and foreign investors dumped the most bonds and stocks in 15 years over the following week.
Depreciation boosts inflation via imports, delaying any rate cut plans, analysts say.
Inflation is expected to reach as much as 19 percent before mid-year. Yet few analysts see another rate hike given Erdogan’s repeated calls for stimulus — including one this month for single-digit rates.
The change in tone under Kavcioglu reflects “preparation being made to cut the policy rate,” said Haluk Burumcekci of Istanbul-based Burumcekci Consulting.
Ratings agencies say premature easing could again hammer the lira and raise risks of a balance-of-payments crisis given Turkey’s depleted FX reserves and its $160 billion in short-term foreign debt.
Citing sources, Reuters reported Erdogan ousted Agbal in part because he was uncomfortable with the bank’s investigation into some $128 billion in FX sales undertaken during his son-in-law Berat Albayrak’s stint as finance minister.