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Why mobile is key to success in the Middle East travel market

Nov 27, 2019

by Ahmed Moursi, Business Development Director

As a recent arrival in the UAE, I have enjoyed getting used to the lifestyle here – not least the weekend brunches and gatherings that Dubai is famous for. While these are a well-known part of life in the emirate, it was at one recent get-together that I noticed another unique aspect of leisure time here. And it got me thinking about its repercussions for the travel market in the region.

The subject of next weekend came up, and the group had a sudden idea to spend it in the neighboring Sultanate of Oman. In the space of 30 minutes, the decision was made, the trip was planned, and the hotel was booked by one of my friends using an app from a big global brand on their phone. This was very different from the way trips are typically booked in Europe, where planning is more likely to be months in advance than just one week.

But in the Middle East this is typical – and part of a growing trend. By 2023 the value of the online travel market across the Gulf Cooperation Council (GCC) countries of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates is predicted to reach $15 billion[1]. That equates to growth of 140% in four years. But when you look at the data surrounding this, it's hardly surprising.

Internet penetration is over 90% in most GCC countries, with 99% in the UAE, while both Kuwait, Qatar and the UAE all have a staggering social media penetration of 99% for people aged over 13[2]. And yet despite this huge digital engagement, the online travel sector reportedly accounts for just 5% of the overall travel market in the region[3]. According to figures from MENA Research Partners (MRP) this compares with 12% globally.

So if the region's residents are such heavy users of digital media, why aren't they buying more travel online from local brands? The simple answer: they can't. Lack of demand is not the problem – there are plenty of travelers just like me and my friends. Travel providers are lagging in the Middle East, while global brands capture bookings with better technology. But, as the MRP research shows, those who continue to lag will soon be left behind. The stage is set for huge and rapid digital growth in the region's travel market, and mobile is going to be the key driver.

The time for mobile is now

Smartphone penetration in the region is already at over 75% and mobile bookings increased in the GCC countries by 110% in 2018[4]. But right now, the average mobile experience in the Middle Eastern travel market still isn't up to the expectations of travelers.

The environment for retail businesses is tough now. And the impact of mobile is only going to increase the pressure on travel agencies in the Middle East, as younger travelers turn more and more towards mobile booking.

But, of course, it's also an opportunity. Retail agencies that can upgrade their mobile experience can take advantage of a market that's ready to boom. Mobile experience isn't easy to get right, but doing so can be really powerful in the Middle East, where the typical traveler's booking behavior is tailor-made for mobile.

"The Middle East sees more last-minute bookings than the global average, at 70%" – Revinate[5]

Why mobile is made for the Middle Eastern market

Unlike the average booking behavior in the European and North American markets, which often means booking up to six months ahead, the Middle East is the complete opposite. Booking travel last-minute – one or two weeks ahead – is very normal in the region[6]. Mobile has given the traveler a tool that makes these more impulsive booking patterns more convenient; the technology is perfectly compatible with typical behavior. Online booking and the ability to quickly browse multiple properties and different deals on one platform, on the go, lends itself to last-minute bookings. I've seen it myself with that trip to Oman – we were out at a restaurant and my friend was able to book it in minutes thanks to an available product and a great user experience all in one app. Most important of all – his booking went through a big global platform because it provided a user experience that he couldn't get from a regional business.

Meanwhile, last-minute booking doesn't go so well with the traditional retail experience that most players in the local market continue to focus on – I think this is contributing to the tough conditions that retail agents are facing. But there are solutions.

How retail agents can gain a mobile advantage

User experience on mobile is everything. So the baseline for retail travel agents in the Middle East must be a usable mobile experience. After that, it's about optimizing and the right commercial offering. At Expedia Partner Solutions (EPS), the B2B partnership brand of Expedia Group where I provide solutions to travel providers across the Middle East and Africa, we provide mobile-specific deals, which help travel partners make the most of their mobile traffic and in app promotions. These building blocks are going to become increasingly important for success in the Middle East's online travel market.

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