Developments in travel related technologies and the opportunities for the industry to capitalise on the global shift towards digital domination from a booking and marketing perspective headlined the opening day of seminar sessions at Arabian Travel Market (ATM) 2015.
A high profile panel of global industry experts addressed the complexities of creating and delivering effective strategies as technology continues to transform destination marketing at an afternoon session held at the RateGain Travel Technology Theatre entitled ‘Destination Marketing for the Future – effective ways of leveraging technology and industry partnerships to successfully market destinations’.
“There are now 6.7 billion global mobile subscriptions with a penetration rate of 92 per cent, and with 50 per cent of all online searches now conducted on mobile devices and a Middle East And North Africa (Mena) smartphone/tablet device market totalling 22 million users, there is no longer any leeway for the travel industry to opt out of a strategic shift towards increased technological commitment and investment,” said Nadege Noblet-Segers, exhibition manager, Arabian Travel Market.
SABRE TRAVEL NETWORK
ATM official Innovation Technology Partner Sabre also took the opportunity on the first day of ATM 2015 to unveil its newly launched TripCase for Apple Watch app.
“Travellers are expecting more than ever from their devices and wearables are no exception,” said Joakim Everstin, Sabre Travel Network EMEA head of innovation.
Sabre announced recently that it has entered into an agreement to acquire Abacus International, the leading global distribution system (GDS) in the Asia-Pacific region. Abacus is currently owned by a consortium of 11 Asian airlines along with Sabre, which has a 35 per cent stake in the company.
Sabre will purchase the remaining portion of Abacus for net cash consideration of $411 million.
“The Asia-Pacific travel market is the largest and fastest growing in the world,” said Tom Klein, Sabre president and CEO. “Acquiring Abacus immediately combines the global capabilities of Sabre with the deep local market expertise of the leading Asia-Pacific GDS. This powerful combination will give customers even more innovation and service options, while allowing Sabre to accelerate growth globally in a very capital efficient way – and to gain regional synergies in all three of our businesses serving travel agents, airlines and hospitality companies.”
Abacus serves more than 100,000 travel agents across the Asia-Pacific region’s 59 markets and has both global and uniquely local relationships with airlines and hotels, including the leading portfolio of low-cost content and Chinese airline content.
Separately, the acquisition includes new long-term distribution agreements between Sabre and the 11 airline owners of Abacus.
Assuming a third quarter closing date, Sabre expects the transaction will increase 2015 revenue by approximately $120 million, be approximately neutral to 2015 Adjusted EPS and modestly accretive to current-year Adjusted EBITDA.
In 2016, Sabre expects the transaction to increase revenue by more than $300 million, to increase Adjusted EBITDA by approximately $50 million and to be accretive to Adjusted EPS by approximately $0.05.
TRAVELPORT
Newly released research from Travelport has also revealed that online travel bookings, which represent 25 per cent of all bookings in the Middle East, are forecast to grow in 2015 and 2016 to reach 36 per cent by the end of 2017, with online revenue expected to reach $35 billion.
Commenting on the findings, Rabih Saab, president and managing director Africa, Middle East and South Asia for Travelport, said: “We can make many interesting regional observations from the research related to online performance; from airlines increasing their brand awareness to hotel focused online travel agents achieving significant growth.”
Offline sales are forecast to continue to grow from $54 billion in 2014 to $63 billion in 2017.
The research released by Travelport as part of a co-sponsored study with Phocuswright, revealed that a host of hybrid travel agents, those whose transactions take place online and offline, are expected to emerge as successful regional agents in the coming years, fuelled by a young middle class, affluent population with a high tendency to travel. Travelport acts as a partner to these agencies by providing the technology to allow them to operate effectively online.
While research shows potential for a mobile breakthrough in the Middle East, only 4 per cent of all online travel transaction revenues are completed on a mobile device. Airlines and hotel focused online travel agents have had the most success with online mobile bookings to date.