With South Africa as its home base and its businesses spread across the African continent, Travelstart believes its roots and experience make it well suited to take on the emerging and fragmented markets of the Middle East. Paulina Klotzbucher, managing director, Travelstart, who has overview of the region, tells Yeoh Siew Hoon why, and also why she’s excited about the region’s potential.
Q: Can you give us an update on Travelstart and its intentions for the Middle East market?
After spending the last few years focusing on the African and developing markets, Travelstart is turning its attention onto the Middle East. We believe the region fits in with the developing markets’ focus that Travelstart has always focused on.
Q: What are its top priorities in the region currently?
We already have a presence in the GCC markets including Egypt. The focus for now is to re-engage with consolidators, airlines and partners in the existing markets together with some major restructuring internally to ensure we are geared for scale and to support the customers.
Q: What are the three most exciting trends taking place in the Middle East online travel space? And how does Travelstart hope to ride on these trends?
The industry is under massive change globally with the likes of NDC becoming a tangible reality. Travelstart is already testing NDC with Lufthansa group. The Middle East consumer is a savvy traveller but payments continues to be a challenge in the region. The increase in card penetration is really helping e-commerce across the board – this should lead to some exciting changes in the next 12 months
Q: Your expertise is in Africa – does it make you better equipped to face the peculiarities of the Middle East market? What similarities/differences are there?
Definitely. The learnings of the past two decades around the complexities of online in predominantly offline markets means we really think we have what it takes to break into these markets.
Q: We see local players expanding – in January this year, Al Tayyar acquired the remaining 40% stake in Almosafer for US$18.66 million (70 million Saudi Riyal). What can local brands do better than global?
A global brand can also be local in its approach – unfortunately many are not. The biggest factor is local forms of payment like Al Ansari and card card settlement so that consumers are not hit with unexpected forex charges on their credit cards
Q: Global brands have also entered the Middle East – Booking.com, Expedia, Agoda – and are having some success. How do brands such as yours, that do not have global scale, compete?
We focus on good relationships with local partners, suppliers and payment providers. We understand the local customer needs. You don’t need to be the biggest to be the best. And actually as Travelstart has grown in our own neck of the woods, we realised that we were drifing away from these very sentiments ourselves, something that luckily we identified quickly. Being small also means that we are more agile and can react to market changes quickly – new forms of payment, new providers, new partnership opportunities – it’s much easier to do this when you are smaller.
Q: What can global do better than you?
Money, reach, brand and resource. If a big player would put massive focus on a specific area, let’s say Booking.com with its fantastic imagery content and amazing UX – it’s hard to complete on that.
Q: What can you do better than global?
Move fast, react to customer changes, find gaps in the market
Q: Cite three major opportunities in the Middle East travel market that make it so exciting
- The emergence of markets outside of just Saudi and UAE where everyone is focusing their eyes on
- NDC – potentially a way to circumvent the growing BSP guarantees in the market
- The volume is there – a massive expat market means everyone travels so you don’t have to create a marketplace. You just have to learn to serve it better, in a way that the Middle east consumer wants to be served (the term middle east consumer is also a loaded comment – the audiences here are as different as the markets.
Q: Travelstart has also been expanding via acquisitions. Will you pursue this strategy in the Middle East? What areas are you interested in? Tours and activities? Alternative accommodation?
We are interested in numerous areas – all of the above and more. This market has enough gossip without us adding more fuel to the fire but yes, there are several potential acquisitions we are also looking at. Watch this space.
Note: Travelstart’s Paulina Klotzbucher, as well as its CEO Stephan Ekbergh, will be speaking at WiT Middle East, Dubai, April 7. Sign up here.
• Featured image credit (Dubai Marina): RobertBreitpaul/Getty Images