UAE travel tech sets high ambitions for Saudi expansion

UAE travel tech sets high ambitions for Saudi expansion
By the end of April, travel tech startup Tumodo aims to be fully operational in Saudi Arabia, marking a significant milestone in its expansion journey. (Shutterstock)
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Updated 23 March 2024
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UAE travel tech sets high ambitions for Saudi expansion

UAE travel tech sets high ambitions for Saudi expansion
  • Tumodo’s target is to reach $100 million in sales by early 2026: co-founder

CAIRO: The burgeoning expatriate community and digital surge in Saudi Arabia have beckoned UAE-based travel tech startup Tumodo to expand its horizons. 

In an interview with Arab News, Vladimir Kokorin, co-founder of the firm, unveiled the company’s ambitious strategy to venture into the Saudi market, buoyed by a successful $35 million raised in its latest funding round. 

He said: “2024 will be the year to set up the foundation for accelerated growth in the upcoming years. Our target is to reach $100 million in sales by early 2026. By the end of 2025, we aim to have an annualized turnover of $123 million.”

Kokorin added: “We also plan to have a strong presence in five major cities including Jeddah, Riyadh, Dammam, Makkah, and Medina with about 800 clients nationwide by the end of 2025.” 

By the end of April, Tumodo aims to be fully operational in Saudi Arabia, marking a significant milestone in its expansion journey. 

Amid its $35 million pre-seed round, Tumodo anticipates becoming profitable in existing markets, launching new markets —including India and Germany, and reaching targeted transaction counts.  

“Tumodo aims to achieve profitability in its current markets, such as Saudi Arabia, by efficiently managing its operations and increasing revenue streams. This milestone signifies the company’s ability to sustainably generate positive cash flow and financial stability,” Kokorin stated. 

Tumodo is also preparing to navigate Saudi Arabia’s regulatory environment with a proactive compliance approach, ensuring adherence to local regulations through thorough research and engagement with local advisors, Kokorin explained. 

He emphasized the importance of expanding into the Kingdom is underscored by Saudi Arabia’s rapid travel market growth, increased tech investment, rising number of registered companies, and expanding expat population.  

Tumodo’s expansion aligns with these dynamics, positioning the company to capitalize on the growing demand for innovative travel management solutions in the Kingdom, supporting its vision for long-term growth and success in the region.

A Saudi landing

Kokorin outlined ambitious short-term objectives for the company’s expansion into the Saudi Arabian market, emphasizing a strategic focus on becoming the leading online travel management platform within three years.  

Tumodo aims to be synonymous with value and efficiency, aspiring to dominate the market by demonstrating their superior technology and service offerings. 

In the long term, the firm plans to revolutionize Saudi Arabia’s travel services sector by modernizing traditional processes and enhancing operational efficiency.  

“We recognize the growing trend of multinational corporations establishing global and regional headquarters in Saudi Arabia, which is expected to drive an increase in business travel demand,” Kokorin said. 

Tumodo aims to achieve profitability in its current markets, such as Saudi Arabia, by efficiently managing its operations and increasing revenue streams.

Vladimir Kokorin, co-founder of Tumodo

“We plan to develop tailored solutions and services specifically designed to meet the unique needs and preferences of multinational companies operating in Saudi Arabia. By forging strategic partnerships and alliances with multinational corporations, business associations, and industry organizations, Tumodo aims to become their preferred travel management partner,” he added.

“We also plan to expand our network and presence in key business hubs and economic centers where multinational corporations are concentrated, such as Riyadh, Jeddah, and Dammam, to better serve the growing demand for corporate travel services,” he stated.

Discussing broader ambitions, Kokorin reveals Tumodo’s global expansion plans, targeting key markets in Europe, the Americas, India, and the UK in 2024.  

This global outreach aligns with Tumodo’s vision to be a frontrunner in the international travel management landscape, catering to diverse markets and leveraging growth opportunities in emerging economies. 

Moreover, Tumodo is keen on forging partnerships with Saudi government entities to contribute to the sector’s advancement, particularly focusing on automation, analytics, and green initiatives.

Business fundamentals

Kokorin shed light on the company’s mission to revolutionize Saudi Arabia’s travel tech sector through innovative automation.  

Tumodo is focused on simplifying the complexities of travel administration, which encompasses a wide range of tasks from booking flights and accommodations to managing itineraries and processing reimbursements.  

By leveraging technology, Tumodo aims to streamline these processes, significantly reducing manual efforts, time, and the likelihood of errors.

The company’s solutions are designed to provide businesses with enhanced visibility and control over their travel expenses, ensuring transparency and accountability in managing travel-related costs, which, in turn, aids in optimizing travel budgets and improving financial management practices. 

Discussing Tumodo’s business model, Kokorin says the company’s revenue streams include booking commissions and a processing fee. 

These are earned when customers book various travel services through Tumodo’s platform, while the processing charge covers the transaction’s facilitation costs and system maintenance. 

Kokorin emphasizes Tumodo’s commitment to transparency, ensuring there are no hidden fees for users, thus maintaining clear operations. 

On the topic of profitability, Kokorin acknowledges Tumodo is currently in the investment stage, focusing on development, marketing, and talent acquisition.  

“Our MENA revenue stream is growing consistently and in accordance with our projections, allowing us to cover all our basic costs. The initial funding, however, comes from the investors, and we expect to start returning investments within one to two years,” Kokorin stated. 

The inspiration behind Tumodo, as Kokorin reveals, stems from the global trend towards digitization, which now encompasses sectors that were traditionally offline.

“From media to automobiles, people need speed, connectivity and ergonomics. Business travel is no exception. The idea was to make business travel convenient, fast and simple for all people by using computer technology. Why spend hours and days booking and managing travel via phone or in the agent office, if it can all be done from your mobile device with just a few clicks?” he said.

In terms of measuring success, Kokorin says market penetration and customer satisfaction are key indicators for Tumodo.

The company prides itself on retaining customers over time, viewing the growing customer base as a testament to its mission’s fulfilment. Kokorin also highlights the importance of developing local metrics specific to the Saudi market, although these are still under consideration.

Looking forward

Kokorin offers an optimistic view of the travel tech market in Saudi Arabia, highlighting its potential for growth and technological advancement.  

With Vision 2030 driving the Kingdom’s development initiatives, there’s an increasing trend toward embracing digital solutions in travel management among Saudi companies.

This evolution is expected to boost demand for platforms like Tumodo, which streamline and automate travel processes.

“In light of these market dynamics, Tumodo aims to position itself as the leading online travel management company in Saudi Arabia. Through its user-friendly interface, robust features, and dedication to customer satisfaction, Tumodo aims to establish itself as the preferred choice for companies in Saudi Arabia,” Kokorin explained.


Qatar issues green bonds worth $2.5bn

Qatar issues green bonds worth $2.5bn
Updated 7 sec ago
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Qatar issues green bonds worth $2.5bn

Qatar issues green bonds worth $2.5bn

RIYADH: Qatar has issued green bonds in two tranches totaling $2.5 billion, according to official data. 

Citing a release from the International Financing Review, Reuters reported that the operation is the Gulf state’s first external debt issuance in four years. 

According to the IFR report, Qatar sold five-year offerings worth $1 billion with a yield of 30 basis points above US treasury bonds, and ten-year debt securities worth $1.5 billion with a yield of 40 basis points.

This comes several months after global professional services network KPMG encouraged the Gulf country to issue green bonds and adopt sustainable financing mechanisms, saying that this step would help the country achieve its sustainability goals.  

The report also showed that Qatar reduced the initial indicative rate to 70 basis points over US treasury bonds for five-year debt securities and 80 basis points over US treasury bonds for 10-year offerings after receiving total orders exceeding $10.9 billion.

On another note, new data revealed that in the first quarter of 2024, Qatar recorded a merchandise trade balance surplus of 53.2 billion Qatari riyals ($14.6 billion), down from 68.4 billion riyals in the same quarter last year. 

Issued by the country’s National Statistics Center, the analysis also disclosed that the value of Qatar’s total exports, including foreign sales of domestic goods and re-exports, amounted to 87.6 billion riyals, reflecting an 8.6 percent drop compared to the corresponding period in 2023. 

On the other hand, during the same period, the value of Qatar’s imports stood at 34.4 billion riyals, reflecting a 25.4 percent surge in comparison to the first quarter of 2023. 

When asked about the issuance of external debt in January, Qatar’s Finance Minister Ali Al-Kuwari, said: “We’re ready to do it very soon.” 

Speaking to Bloomberg Television on the sidelines of the World Economic Forum in Davos at the time, the official highlighted that Qatar is “not hungry for money,” but it will pursue the issuance “mainly to send a strong statement” in combating climate change.  

One of the world’s biggest producers of liquefied natural gas, Qatar has not issued eurobonds since early 2020, when it sold $10 billion of debt.   

In 2022, the Gulf state’s central bank announced plans to implement strategic actions, including facilitating green bond issuance and advancing cooperation with the Qatar Development Bank, to promote diversification efforts. The aim is to fund projects to reduce carbon and other planet-warming emissions.


Saudi Arabia, China explore private sector investment opportunities during Beijing meeting

Saudi Arabia, China explore private sector investment opportunities during Beijing meeting
Updated 5 min 40 sec ago
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Saudi Arabia, China explore private sector investment opportunities during Beijing meeting

Saudi Arabia, China explore private sector investment opportunities during Beijing meeting

 RIYADH: Chinese participation in Saudi Arabia’s private-sector projects is set to increase as the Kingdom’s Finance Minister Mohammed Al-Jadaan held meetings with top officials in Beijing. 

Al-Jadaan, who is also the chairman of the National Center for Privatization & PPP, led a roundtable meeting with senior officials of Chinese companies in cooperation with the Industrial and Commercial Bank of China to discuss partnership opportunities. 

In his opening address, the finance minister emphasized the depth of the bilateral relationship between the two nations, highlighting the trust and ongoing collaboration across diverse sectors, the Saudi Press Agency reported. 

He revealed that the NCP has so far awarded over 60 privatization and partnership contracts in eight key sectors since its establishment, totaling a capital investment exceeding $10 billion.  

Al-Jadaan also highlighted the NCP’s proactive measures in fortifying the ecosystem, including the adoption of privatization laws and complementary statutory frameworks aimed at expediting the implementation of PPP projects. 

During the meeting, participants emphasized the potential for PPP - public private partnership – ventures within the infrastructure sector, outlining pathways for companies and investors to engage in these initiatives across diverse domains. Special focus was placed on construction, transportation, water management, and airport development. 

At the close of the meeting, the minister commended the ICBC’s role in bolstering the NCP’s efforts to showcase privatization and partnership opportunities to Chinese investors and firms. 

NCP plays a key role in facilitating the privatization program, a key priority outlined in the realization of the Saudi Vision 2030, according to its website. 

The center assists in drafting regulations, establishing frameworks, and preparing government assets and services for privatization. Additionally, it is developing the privatization pipeline, proposing sectors and government assets and services for potential improvement through private sector involvement.  

In 2023, the NCP unveiled its privatization and PPP pipeline, featuring 200 approved projects spanning 17 sectors. This initiative was in alignment with the objectives of Vision 2030, aiming to elevate the private sector’s contribution to the gross domestic product from 40 percent to 65 percent by 2030.  

As of the same year, the pipeline encompassed over $50 billion in investments, with an additional 300 projects under evaluation, signifying promising growth prospects. 


Egyptian merchandise exports reach $13bn in first 4 months of 2024 

Egyptian merchandise exports reach $13bn in first 4 months of 2024 
Updated 22 May 2024
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Egyptian merchandise exports reach $13bn in first 4 months of 2024 

Egyptian merchandise exports reach $13bn in first 4 months of 2024 

RIYADH: Egyptian merchandise exports reached $12.91 billion during the first four months of 2024, reflecting an annual 10 percent increase.

The country’s Minister of Trade and Industry, Ahmed Samir, highlighted that this continuous rise in merchandise exports has persisted for the fourth consecutive month, according to an official announcement.  

The ministry aims to further increase exports from all production sectors to various global markets in the upcoming phase.  

This strategy involves a concerted effort by the authority, its affiliated bodies, the business community, and Egyptian exporters to enhance the quality and competitiveness of Egyptian products both locally and globally. This will contribute to the state’s target of achieving $100 billion in annual merchandise exports. 

Saudi Arabia emerged as the largest market for Egyptian merchandise exports during the first four months of 2024, with a value of $1.1 billion compared to $993.6 million during the same period in 2023.  

Turkiye followed with $1.08 billion compared to $900.5 million, Italy with $793.1 million to $785.5 million, and the UAE with $735 million to $460 million. The US stood at $716.2 million compared to $587.1 million. 

The main sectors forming the structure of Egyptian merchandise exports during this period included building materials worth $2.88 billion, food industries worth $2.10 billion and chemical products and fertilizers worth $1.98 billion, as well as agricultural products worth $1.77 billion, engineering and electronic goods worth $1.70 billion, and ready-made garments worth $855 million. 

Key export items that increased from January to April 2024 included fresh and dried citrus worth $767 million, gold worth $650 million, and nitrogen fertilizers worth $588.5 million.

 


Saudi Monsha’at and Social Development Bank ink deal to boost SME financing

Saudi Monsha’at and Social Development Bank ink deal to boost SME financing
Updated 22 May 2024
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Saudi Monsha’at and Social Development Bank ink deal to boost SME financing

Saudi Monsha’at and Social Development Bank ink deal to boost SME financing

RIYADH: Saudi small and medium enterprises are set to receive a finance boost thanks to a new deal signed by the Kingdom’s Social Development Bank. 

The cooperation agreement, inked with the country’s SME general authority, also known as Monsha’at, will see the authority joining the bank’s Entrepreneurs Program, the Saudi Press Agency reported.  

This collaboration aims to provide the necessary financing solutions and facilities for the growth of SME projects and the expansion of their businesses. 

The program is a financing product aimed at supporting the assets and operating costs of new business entities in the Kingdom. 

This initiative aligns with Monsha’at’s objective to bolster the growth and competitiveness of SMEs by collaborating with strategic partners from various sectors, both locally and globally. The goal is to create an enabling environment and foster a leading society.  

Furthermore, it resonates with the bank’s vision to be pioneers in empowering social development tools and enhancing the financial independence of individuals, families, and entities toward a vibrant and productive society. 


Saudi Arabia rises 9 spots in WEF’s global tourism index

Saudi Arabia rises 9 spots in WEF’s global tourism index
Updated 22 May 2024
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Saudi Arabia rises 9 spots in WEF’s global tourism index

Saudi Arabia rises 9 spots in WEF’s global tourism index

RIYADH: Saudi Arabia has climbed nine spots to rank 41 on a global tourism index – marking the Gulf region’s largest improvement – thanks to its strengthening infrastructure, corporate presence, and major business centers. 

According to the World Economic Forum’s Travel & Tourism Development Index report, Saudi Arabia has recorded the most significant improvement in the Middle East and North Africa region since 2019. 

The WEF’s TTDI, covering 119 economies, measures the set of factors and policies enabling the sustainable and resilient development of the tourism and travel sector, which, in turn, contributes to a country’s development. 

The report highlighted that the tourism sector in high-income economies within the region, particularly the Gulf Cooperation Council, benefited from several factors. These included high-quality infrastructure, such as major aviation hubs and leading airlines, the presence of large corporations and significant business centers driving travel activities, and a favorable business environment. 

“In part, these efforts are reflected in broad increases in government T&T spending as a share of budgets, loosened visa requirements, improvements in the establishment and promotion of cultural resources, and the highest regional average for T&T capital spending per employee in the index,” the report added. 

In the index, the UAE stands out as the top performer in the region overall and the Middle East subregion, ranking 18th. Meanwhile, Egypt, with a ranking of 61st, stands out as the top scorer in the North Africa subregion, the report revealed. 

The US, Spain, and Japan hold the top three positions in the index with no change in ranking from 2019. Meanwhile, France and Australia have climbed two ranks each from 2019 to secure the fourth and fifth positions. Germany and the UK also feature in the top 10 but with a minor fall in their positions to sixth and seventh in 2024 compared to 2019. China, Italy, and Switzerland hold the remaining three positions in the top 10. 

The WEF findings also pointed out that travel and tourism activities in developing economies in the region often face challenges, including less attractive business environments, safety and security concerns, and gaps in the necessary transport and tourism infrastructure. 

Furthermore, many countries in the region have implemented policies and invested substantial resources to develop the tourism and travel sector. This effort aims to diversify their economies and reduce dependency on the oil and gas industry, according to the report. 

Saudi Arabia is set to unveil a new tourism strategy later this year, leveraging artificial intelligence and seamless technology, Gloria Guevara Manzo, chief special adviser at the Ministry of Tourism, told Arab News on the sidelines of the Future Aviation Forum. 

She added that the plan aims to enhance the Kingdom’s cultural, historical, and hospitality assets. 

In 2023, Saudi Arabia’s travel sector surpassed expectations, prompting a revision of its Vision 2030 targets from 100 million to 150 million visits by 2030.  

Additionally, the Kingdom has introduced regulatory changes, such as the “Visiting Investor” visa and the expansion of the GCC unified visa service, to attract more international visitors and investors.  

Major projects like NEOM, Riyadh Air, and the Red Sea Project are central to these efforts, aiming to make tourism a significant revenue source by 2030. 

The WEF also noted that the tourism and travel sector in the region would benefit from reducing travel and trade restrictions and making significant investments in environmental sustainability to support future improvements in natural resources.  

However, it warned that the recent escalation of regional conflicts and the resultant increase in safety and security concerns pose a major external risk to future tourism development.