KSA travel sector set for recovery as Saudis prepare for holidays

KSA travel sector set for recovery as Saudis prepare for holidays
The Saudi Interior Ministry recently announced that vaccinated Saudis and those who have recovered from COVID-19 would be allowed to travel abroad as of 1 a.m. from May 17. (File)
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Updated 10 May 2021

KSA travel sector set for recovery as Saudis prepare for holidays

KSA travel sector set for recovery as Saudis prepare for holidays
  • 80 percent of those surveyed plan to go abroad within 6 months of borders reopening

JEDDAH: Saudis are as eager as ever to explore other countries, with a survey by travel operator Almosafer finding that 80 percent are planning  to go abroad within six months of the borders reopening on May 17.

Speaking to Arab News in mid-April, Capt. Ibrahim Al-Koshy, CEO of Saudia, the Kingdom’s state-owned flag carrier, said initial bookings were healthy but “people are still a bit cautious about long-distance traveling.”

This was supported by Muzzammil Ahussain, executive vice president of the consumer travel business unit at Seera Group, the parent company of Almosafer, who found that initial interest among travelers was for locations predominantly within the Middle East and North Africa, especially nearby countries like Bahrain, Dubai, Qatar, and Egypt, as well as new locations like Bosnia, Georgia, the Maldives, and Morocco.

“This is what customers told us in Q1 in the survey, as the borders open soon, and this is exactly what we saw, there is a spike in the traditional countries that Saudis usually travel to in terms or searches and bookings,” Ahussain told Arab News.

Before the coronavirus disease (COVID-19) pandemic, European destinations like France, Italy and Switzerland were popular in the summer. “However, Europe now is not as safe as places like the Maldives,” Ahussain said. 




Muzzammil Ahussain, Executive VP, Seera Group

He added that Saudis have shifted their interest away from Turkey to alternative locations like Georgia and Bosnia.

Another recent trend Ahussain noticed is an increased preference for boutique hotels and alternative accommodation with a more personal touch.

Previously known as the Al-Tayyar Travel Group, Seera Group is the largest travel and tourism group in the MENA region. It was hit hard by the economic impact of the pandemic, with net profit down around 91 percent in 2020. While various subsidiaries of the company are recovering at different rates, Ahussain believed it would take time to get back to pre-pandemic levels. “Collectively, we are looking at a full recovery by 2023,” he said, while adding the general consumer travel division will “reach 50 to 60 percent of pre-pandemic levels this year.”

FASTFACTS

• Saudis are taking interest in visiting countries like Bahrain, Dubai, Qatar, and Egypt, as well as new locations like Bosnia, Georgia, the Maldives, and Morocco.

• Before the pandemic, European destinations like France, Italy and Switzerland were popular in the summer.

Seera Group invested in Dubai-headquartered ride-hailing app Careem in December 2014 and when the company was sold to international rival Uber it received a large cash injection when it exited in 2019. 

Ahussain said the Careem exit provided it with timely liquidity for the company’s balance sheet of around SR1.78 billion ($470 million). This helped it focus on Lumi, its homegrown car rental division.

Lumi was the key division for Seera in 2020, with its gross book value increasing by 27 percent year-on-year to SR434 million.

“Lumi, The group’s car rental unit is increasing, year-on-year, it is already above the pandemic numbers, it has not slowed down,” Ahussain said. “It increased its profit last year and it is expected to increase this year.”

Ahussain added that there are plans to expand Lumi’s digital offerings through rentals, used car sales, mobile workshops, and pick-up and drop-off services. The new platform is expected to be launched within two months. “We are heavily investing in the digital solution of Lumi,” he said.

The Saudi Interior Ministry recently announced that vaccinated Saudis and those who have recovered from COVID-19 would be allowed to travel abroad as of 1 a.m. from May 17.