EFT Travel Distribution Middle East 2008High social use of Internet and growing consumer confidence indicate that the Middle East market is ready to embrace web as a channel for travel distribution.

Published: 17 Jun 2008

EFT Travel Distribution Middle East 2008

High social use of Internet and growing consumer confidence indicate that the Middle East market is ready to embrace web as a channel for travel distribution.

The region, which had 3.3 million Internet users in 2000, has grown to 42 million users in 2008, registering the highest percentage growth worldwide, pointed out Walter Lo Faro, Director of Market Management for Middle East & Indian Ocean, Expedia.

Lo Faro added that the Internet penetration in UAE is 40% (1.76m users); Kuwait 35% (875,000 users) and Saudi Arabia 18% (4.9m users).

Despite such levels of penetration, the online travel market is quite far off from its potential.

"(As of now) only 2% of travel bookings are made online in the Middle East but across how many sites?" pointed Lo Faro, a speaker during the online consumer behaviour session of EyeforTravel's first Travel Distribution Middle East conference being held in Dubai.

On some of the hurdles in this region, Lo Faro referred to low credit cards penetration, issues related to online payment getaway and 13 different currencies.

Overall, he said that local reputable companies are key for the Middle East to culturally 'open' to e-commerce.

"Sites must be the most updated source of information, featuring equal if not enhanced services. This is after all the most cost effective marketing and distribution channel," said Lo Foro.

On factors that can propel the online travel market, he said the government regulations on e-commerce practices would help to create a safe and reliable internet environment.

"(Also), Internet providers should improve the quality of services, decrease costs and enhance security (not limited to censorship) in order to make online transactions efficient and safe and local banks should offer efficient payment gateway solutions, also aimed to facilitate the increase of credit/debit card penetration," he said.

Specifically, on the mobile market, Gerry Samuels, founder and executive director, Mobile Travel Technologies Limited shared that the Middle East market has a 34% mobile penetration.

Mobile services revenue is expected to grow at CAGR of over 10% from $22 billion in 2006 to $40 billion by 2012.

Total mobile revenue per capita in Middle East is 20% higher than equivalent European market, pointed out Samuels.

Ritesh Gupta

EyeforTravel.com