Al Tayyar Travel launches transformation plan
Saudi Arabia-based Al Tayyar Travel Group, a leading global travel and tourism company, today announced a strategic transformation plan that will take the company in a new, more focused direction to enhance long-term shareholder value.
A statement said the the company’s board of directors has approved the new plan.
The company’s operating environment is undergoing a significant shift, yet with the implementation of this transformation plan it will be able to reconfigure its business divisions, enabling them to expand into new profit pools and revitalise their returns, it said.
Abdullah Aldawood, Chief Executive Officer of the company, said: “We look forward to turning a new chapter in our company’s history. As a leading travel and tourism company we are witnessing very exciting changes on two fronts: firstly, the global travel industry is shifting and agencies are evolving from being airline ticket suppliers to holiday advisors and online booking service providers. Secondly, Saudi Arabia is undergoing an economic and social transformation, whereby the tourism sector is set to be a key beneficiary. Therefore, we are undergoing a strategic transformation which will allow the company to adjust to the changes, capitalise on emerging opportunities and expand into other growth markets.”
The company will now be organised around four main areas: Travel, Hospitality, Supporting Business and Investments. Travel and Hospitality will undergo significant changes with the aim of driving operational efficiency, promoting customer value and focusing on high growth areas. Supporting Business will be repositioned to supplement the company’s profitability and Investments will help enhance the shareholders’ equity value, the statement said.
Travel Services and Online Travel Agency (OTA) will be the principal growth engines of Travel. The Travel Service unit aims to better serve three customer groups: leisure, government and corporate, and Haj and Umrah. For leisure tourists, the company will adopt an omni-channel strategy that serves to reorient its sales approach from a transactional agency to a travel and holiday advisory. To complement this new approach, in 2018 the company will roll out a series of revamped retail outlets, from flagship travel shops to kiosks in shopping centres.
As for the government business, the company will upgrade its offerings to public sector employees to offer more cost-effective travel solutions. The company will also accelerate its push into the mid-market corporate segment, providing convenient travel solutions. Also, the company will be working on developing the best travel solutions for Haj and Umrah visitors to help the government achieve its goal of attracting 30 million pilgrims by 2030, it said.
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OTA is a high growth business where the company will significantly increase capital expenditure to enhance its platform with world class solutions for the customer. The company’s goal is to reach a gross booking value of SR3.75 billion by 2020 – led by its brands Almosafer and Tajawal. Since 2015, the two brands have achieved phenomenal growth and have risen to become the leading OTAs in Saudi Arabia. Furthermore, the company plans to increase the number of new products available, such as insurance and holiday activities, and to expand into other high growth markets, the statement said.
Aldawood said: “We are very proud of the massive growth the online booking business has amassed in under two years. This is a great testament of our ability to expand into a booming market by building strong brands – Almosafer and Tajawal – to help us grow our market share in the OTA space and to cement our position as the leader in travel and tourism in the region. The outlook for the OTA business is very bright, so this is where the company will be significantly allocating resources.”
The hospitality mid-market segment and hotel management will be the key focus of Hospitality. The company currently has five operational hotels, including the Sheraton Makkah and Movenpick Hotel City Star Jeddah. These assets will provide steady cashflow to fund investments into other areas of the company. Going forward, the company will develop and operate hotels in the GCC’s mid-market segment through its Choice Hotels master franchise, owner and operator of globally renowned hotel brands including Comfort Inn, Quality Inn and Clarion.
Aldawood added: “The hospitality business will have two very important functions: to provide the company with steady cashflow and tap into the underserved mid-market hotel segment. Currently, the book value of our hospitality portfolio is over SR4 billion and we are targeting to develop and operate 30 hotels with 6,000 rooms in the mid-market segment by 2022 and will be leveraging the Choice Hotels’ expertise to help us in achieving our growth ambitions.”
For Supporting Business, the company will increase its focus on car rental corporate leasing and targeting business travelers. It has a huge competitive advantage by being one of the only car rental companies with access to all major airports in Saudi Arabia, including Riyadh’s King Khalid International Airport and Jeddah’s King Abdulaziz International Airport.
In addition to the actions above, Investments will continue to manage a portfolio of other ventures that carry upside potential and expand our international reach. Some of the company’s investments include the leading Mena-based car-hailing app Careem and the ninth largest UK travel management company Portman, it said.
Aldawood concluded: ”We are fully committed to ensure that this transformation shapes our future, delivers strong shareholder value, and continues to protect the trust our customers have placed in our brands for over 35 years.” – TradeArabia News Service