Middle East Travel Market

Posted on 15 January 2009 by Norm Rose

I am currently back in Middle East. This is my sixth trip since July 08. Rapid growth is still the norm here despite the economic downturn, though the market is showing some signs of a slowing down. Even hot markets such as Dubai are showing signs of a slowdown as many construction projects have been slowed or put on hold.

The following chart describes the maturity of global market based on travel technology adoption:

The Middle East is an emerging market where online travel itself has not yet taken off. Corporate travel agencies are still primarily transaction processors rather travel management consultants.

There are both structural and cultural barriers to adoption of corporate booking tools. Most of the agency staff is actually Indian. Rates for agency staff are still much lower than in Europe or the US. Service is viewed as an essential component of corporate travel.

Despite these obstacles I do believe we are on the cusp of a major change in corporate/agency relationships here in the Middle East. High net worth individuals will continue to demand personal service, but many Middle East residents in my age group (baby boomers) were actually educated in the US or Europe and thus are implementing Western business techniques. With places such as Dubai now facing a drop in occupancy, online travel companies such as Expedia are poised to launch Middle East operations in 2009.


As this chart (developed in conjunction with Market Designs) indicates the evolution of a market first begins with basic infrastructure and online activity. Travel search follows with the adoption of online booking. Corporate booking tools are at the last stage of market development.

I believe the current economic downturn combined with the rapid growth of online travel will dramatically change the lansdcape for corporate travel mangement in the region over the next 12 months.

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  • http://www.blogger.com/profile/01128082243255520656 naresh

    Its an interesting article about middle east travel market.Having spent quite some years in the market,i see the market more traditionally driven controlled by market forces especially airlines and big travel agencies.They are also divided by region like for example abudhabi has a very strong lobby of travel agents and have never allowed few things to happen while other areas like dubai or muscat or bahrain are dominated by major groups.Also travel consumers are dominated by expats who travel frequently to home destinations for a holiday.These consumers are dominated by standard set of rules and regulations.Fully agree with authors view that there a potential change possible in the middle east market where webservices is a new buzz word still.

    Regards

    Naresh

  • http://www.blogger.com/profile/01128082243255520656 naresh

    hi

    One question,in europe one segment shows rapid growth in the Map.Can we know which are the geos we are referring to

  • http://www.gtc.travel Mujtaba Mahmood – gtc.travel

    The economic impact has really affected the credit business as all corporates have shown delays in their payments thus agents slowed their sales and some even pulled back and closed some corporates accounts.
    Corporate culture in this part of the world has a different attitude than the western, if you as a travel agent and want to convince a corporate travel manager to use the online tools, then you might end up loosing him. They like to live the old days and some still depend on sending faxes and hardly check their emails.

    If you go to those new companies or financial institutions then you might find new travel managers who like to use nothing but the electronic media like online tools and emails.

    Things are gonna change soon as there are some demands from corporate to use online tools.

    Regarding the agents, the sad story is that they are one the lowest paid employees in the market and are not trained to be travel advisers or managers. They rarely know more…

    The case with us when we have recruited our 14 years experienced staff, we fund un-healthy habits that they come with which we had to go a fix and to show the new technologies and how they can get the benefit from.