Traveller numbers are soaring in the region and a ‘new-age’ OTA based in Dubai has piqued the interest of some notable investors. Sally White reports
Troubles it certainly has! Yet the Middle East region is forecast this month by the International Air Transport Association (IATA) to see its traveller numbers soar over the next 20 years. And right now its burgeoning online travel industry has absolutely no trouble finding growth funding. Holidayme.com, a fast-expanding Dubai-based OTA, has just raised $7 million from some very strong backers.
IATA’s last forecast, out this week, sees the Middle East growing by 5% a year on a compound basis to 2035. That will bring an extra 258 million passengers a year on routes to, from and within the region. The UAE, Qatar and Saudi Arabia will all enjoy strong growth of 6.3%, 4.7% and 4.1% respectively, it says. The total market size will be 414 million passengers – not yet among the major players, but set to become one.
As IATA notes, last year the share of international traffic carried by Middle East airliners reached over 14%, higher than their North American counterparts at 13.4%. That is not a bad starting point for the local travel industry.
Numbers like those have just helped HolidayMe.com to win money from Accel Partners and Saudi Arabia based F&C Overseas Investment. Existing investor Al Sanie Group also recommitted by participating in the round. (The latter is a Saudi-based investment group that was in on the first round - $4 million in 2014.)
Accel’s early stage investments include companies such as Dropbox, Flipkart, Spotify, Kayak and HotelTonight…even in a funding round for Facebook in 2005
Accel Partners is a Silicon Valley based venture capital group that has a long and highly successful track record of investing in start-ups and young companies. The MENA Herald, commenting on this funding round, points out that some of Accel’s early stage investments include companies such as Dropbox, Flipkart, Spotify, Kayak and HotelTonight. It was even in a funding round in 2005 for Facebook. Investment in HolidayMe marks Accel’s entry into the Middle East.
F&C Overseas Investment is now part of the major Bank of Montreal investment empire, and this is a new foray for it. “The region has one of the highest per capita spend in holidays, and is need of a new age platform to meet their requirements. We are very excited to join HolidayMe in this journey towards fulfilling this gap and becoming the platform of choice for online holidays,” Faisal Al Nassar from F&C Investment is quoted by online investment platform Wamda as saying.
The region has one of the highest per capita spend in holidays, and is need of a new age platform to meet their requirements
Founded by Geet Bhalla and Digvijay Pratap two years ago, HolidayMe aims to “enable travel seekers to design and book holiday packages, hotels, flights and tourist activities for global destinations”. In the interview with Wamda, Bhalla said his company works closely with the region’s powerful airlines. It seeks to help them by “generating more passenger traffic without falling into rate parity, while airlines offer benefits and a value product”. The platform includes more than 400 holiday packages to over 200 destinations, and over 8,000 activities globally. It also has a link with TripAdvisor on hotels.
HolidayMe started by opening offices in the United Arab Emirates, Saudi Arabia and India, and then began growing across the Middle East region.
Outlining the backgrounds of the founders last year, Arabnet said Geet had “over 15 years of experience under his belt in enterprise sales and marketing”. Digvijay on the other hand has worked with a number of companies from the travel sector including Hoteltravel.com…. Thomas Cook, Aviva and Pathfinders.”
Ever prescient, Amadeus Gulf has launched a suite of robotics and touchless solutions to address the needs of Middle East travel market.
Both the founders talk of the scope to grow internationally from their Dubai base. Dubai attracted over 14.2 million overnight visitors in 2015, a 7.5% increase on 2014, according to annual figures from Dubai’s Department of Tourism and Commerce Marketing. That made it the fourth most visited city in the world last year, says Helal Saeed Almarri, director general, Dubai Tourism in an interview in Arabian Business.com. Much of the business remains local – 3.3 million visitors came from the Gulf States (up 12.8% on last year) with Saudi Arabia the largest single source. However, Western Europe remained the second highest regional contributor to visitor volumes, bringing in nearly 3 million tourists, up 6.1%.
Further evidence of the region’s potential comes from Amadeus. Hotelier Middle East in April quoted Amadeus Gulf as forecasting that the regional online travel market would almost double in value within the next two years, rising from US $18 billion to $35 billion by 2018. Ever prescient, Amadeus Gulf has launched a suite of robotics and touchless solutions to address the needs of Middle East travel market.