The Gulf Cooperation Council (GCC) has been home to an abundance of changes as of late. Nowhere else has the transformation been more apparent than in the corporate travel segment, where major names from across the globe have flocked to make good on a great and growing number of opportunities. However, while visitor numbers are skyrocketing and the infrastructure fast improving, the fact remains that this is still a relatively immature market, and the part played by corporate travel management companies is of inestimable importance.
Business Destinations spoke to Haytham Sadek, CEO of the region’s fastest growing travel management company, Alshamel Travel, about the ways in which the region’s tourism industry has evolved and what role firms like his have played in facilitating this influx of corporate travellers.
Can you tell us about the ways you’ve seen corporate travel grow in the GCC since your firm’s inauguration?
Since the establishment of Alshamel Travel in 1996, corporate travel in the GCC – as in other regions around the world – has changed and evolved with the dynamic advancements in IT and telecommunications. The economic prominence of the GCC and the establishment of world-class airlines have also contributed greatly to growth in corporate travel, as more multinational companies have found the GCC to be a convenient hub between east and west, while also providing access to the Middle East.
Over the past 20 years we have also seen a boom in hotel construction, with thousands of new hotel rooms added every year to accommodate for and take advantage of the constant growth in the marketplace. These elements combined have motivated many global companies to establish regional HQs in the GCC, creating working opportunities for professionals from every corner in the globe and simultaneously driving phenomenal growth in corporate travel. At Alshamel, we have enjoyed year-on-year growth averaging at 20 percent since the creation of the company.
Likewise, how has the business of travel management changed in that time?
Several technological innovations have changed the face of the travel industry. The emergence of the internet and the ability to communicate over secure email protocols has made it possible for travel companies to deliver travel services instantly and efficiently. E-ticketing, for example, has revolutionised the way that travel companies work and has enabled them to reach customers and markets they had never previously had access to.
What are the biggest opportunities and challenges for corporate travel in the region?
There are many untapped business opportunities in the GCC corporate travel landscape, and chief among them is the insistence of corporate buyers to book and pay for hotels directly. Non-air attachment rates and, in particular, hotel attachment rates remain very low. There is at least a 30 to 40 percent potential increase of existing contracts due to the underutilisation of travel management companies (TMCs) when it comes to hotel bookings.
As far as challenges go, we believe that the most dangerous comes from within the industry itself: transaction fees below three percent and a lack of transparency are distorting the business as more and more travel agencies undercut pricing in the hope of making money from kickbacks and mark-ups from the back end.
What do your corporate travel services include?
By virtue of being a regional travel management company, our services include an array of products and services that cater to our corporate customers. We divide our service offering into two sections: services for the corporate buyer or travel manager, and services for the corporate traveller.
For corporate buyers we provide travel policy management, intended to monitor compliance and full visibility of our clients’ travel expenditure though periodic management reporting. This in turn helps travel managers to identify business trends and saving opportunities. Using our leverage and good name to negotiate preferable airfares and hotel rates with suppliers, we also set up traveller tracking for safety and security via third party providers. Our services also extend to include an invoicing portal that provides instant access to invoicing and financial statements and a business continuity plan (BCP); all delivered though our network of offices. For regional companies, we offer a unique opportunity to streamline their travel procurement.
For the traveller, we arrange bookings for all types of services, from the traditional flight and hotel requests to arranging limo services and theatre tickets. We also deliver profile and travel preference management, destination information and 24-hour emergency travel support.
What differentiates you from rival travel management companies?
Perhaps the single most important differentiator is in our ability to manage businesses scientifically. We take great pride in the technology that we deploy to capture the accumulated travel expenditure of our clients, safeguard client data and reproduce it in a format that gives them full visibility of their expenditure, thereby allowing them to make informed decisions that should save them money.
Tell us about your military and government travel services. How has this segment grown recently?
Alshamel’s military and government travel services are second to none in the region. We have helped the military to develop its travel programmes in the area, and have been working with the Department of Defence (DOD) for well over a decade. Through our projects we have ticketed over one million military travellers, and we have developed a traveller tracking application specifically for the military. This is used to provide tracking of the extensive documentation that is required in order to move service members around the globe. The DOD used this ‘travel tracker’ software during Hurricane Katrina in order to successfully locate all service members travelling in the affected area.
Although military travel in the GCC has been on the decline in recent years, it is an ever-changing landscape of movement as the political environment continues to shift. We are able to immediately step in and assist the military with their requirements through our unique systems and knowledge of this segment.
What are your plans and ambitions for the future?
Alshamel Travel has always been an ambitious company, with the right personnel and financial capital to achieve its goals. Our aspirations for the future of our business are limitless: we seek to be the employer of choice in the industry and to be the best service provider through our network of offices across the region. All our resources are geared towards achieving the highest approval rating from our existing clients, and we aspire to convert this high approval rating into more opportunities. We believe our infrastructure in IT and telecommunication technologies, which we have built over the past three years, enables us to serve regional clients seamlessly across the GCC and bring tremendous service improvements to corporations with a regional scope.
