Are UAE residents seeking travel experiences going back to Online Travel Agencies (OTAs) and price aggregators amid global headwinds? Are corporate consumers liaising directly with airlines and hotels for their travel needs? And how are travel agencies in the country keeping up against stiff competition from online marketplaces for travel deals? It’s not easy by any means.
The travel and tourism industry was most affected when the pandemic hit. Yet, despite COVID-triggered restrictions, travel agencies in the UAE survived the worst of times by earning the trust of travellers. Residents found it easier to recover cancellation refunds and better rebooking options through travel agencies.
“They felt like they could speak to someone about the issues they were facing with airlines,” said Afi Ahmed, the Managing Director of Smart Travels. “People stranded in foreign countries and those with cancelled tickets awaiting refunds could not get through the airlines. But carriers were inundated with calls and messages at that time,” he explained.
Now that these issues are resolved consumers are returning to OTAs and price aggregators for their travel needs, forcing travel agencies to develop creative business strategies to stay afloat.
Scottish metasearch engine and travel agency SkyScanner.com boasts over 100 million monthly users. Dutch OTA Booking.com, a subsidiary of Booking Holdings, had over 100 million users on its mobile app in 2022, accounting for 40 per cent of its total bookings.
Are hybrid business models the way forward?
Unlike the corporate travel sector, B2C is highly competitive in the travel industry. And to combat the intense competition from travel aggregators, agencies are adopting a ‘hybrid’ business model. Smart Travel, for example, is planning to launch its B2C price aggregator platforms to compete against more prominent players, Booking.com and Agoda.
Ahmed said: “We have plans to launch our B2C platform in a few months. Travellers who prefer to book online can book on the website, and those who want a retail experience can make bookings at any of our 11 branches in the UAE.” Moreover, suppose a customer faces a booking-related issue. In that case, they can visit the retail outlet or speak to one of the customer service agents, who are locally based, to resolve their problems, said Ahmed.
Musafir.com, an OTA launched in the UAE in 2008, is one of the first to adopt a ‘hybrid’ business model. The company has 13 retail outlets in the UAE. “A majority of our business comes from the corporate travel sector; 60 per cent is from business travellers and 40 per cent from leisure,” said Raheesh Babu, Chief Operating Officer at Musafir.com.
He said: “Having a hybrid model was one of the main reasons we recovered faster during the pandemic. Moreover, one of the challenges of having a fully-online model is customers find it hard to trust online-only companies. A brick-and-mortar store alleviates that challenge.”
Expansion and recruitment plans
Many travel agencies are also turning to social media to capture online audiences. Geoffrey Salatan, Managing Director of Pinas Travel, said: “Online travel agencies are doing good. But keeping the traditional way and utilising social media gives a more personalised service to clients.”
Some travel agencies have planned recruitment drives to employ at their new retail outlets. Babu said: “We have expansions planned in other GCC countries and Sound India. We will be opening a new retail outlet in Saudi Arabia and at least three more in UAE,” explained Babu.
“We have a current staff strength of over 300 employees, of which over 50 per cent are employed in the UAE. We are looking to hire country managers, sales staff, and holiday consultants. We are also offering 15 to 20 per cent higher salaries as we want to retain talent,” he added.
The Emirates Group’s Yalago, through its Retail Connect operation, has recently appointed business development managers in the USA, Switzerland and Spain, as well as expanding its Dubai-based team, intending to further grow its global footprint in 2023.
Husain Iqbal, GSA at Sharaf Travel, said: “Across the GSA (general sales agent) front, we have been hiring, but it is purely need-based. We have hired at multiple scopes, including reservation and ticketing, GSA sales and airport operations,” he added.