(MENAFN - Arab News) Travel agencies and tourism experts have said sales in the domestic tourism sector shot up to over SR16.8 billion last year, compared to SR15.1 billion in 2010.
Though the market is promising and growing steadily, they say there is a need to streamline operational and marketing strategies in order to sustain the momentum of growth. A tourism panel set up in this context has stressed the need for an association that shall work for the protection of workers and solve the sector's problems in coordination with the International Air Transport Association (IATA).
They made this call during the second session of the Travel and Tourism Investment Market 2012 (TTIM) on new trends in the travel and tourism. They underlined the need for an entity that will work for promoting the interests of workers in this sector and discuss its problems, especially in the light of emerging trends such as the tendency of airlines to sell their products directly, the popularity of online and electronic transactions in addition to sales outlets operating from abroad. The association will also work in coordination with IATA.
In his keynote speech, Abdullah Abu Khamseen, member of Yusuf Bin Ahmed Kanoo's board of directors, said the market for travel agencies and tourism remained dynamic. Even so, it was a promising market, he reaffirmed, citing its sales volumes of SR16.86 billion in 2011 compared to 15.1 billion in 2010, an increase of 11 percent. He referred to the anticipated high income of the agencies amounting to SR1.06 billion in 2010 to SR1.18 billion in 2011 to prove this point.
Despite that figure, Abu Khamseen stressed the sector needs a careful review of working methods and technology use already in place. Such a review was necessary in the interest of the current situation facing the airline industry, which is trying to remain afloat in the market through training and planned investment as part of their rehabilitation program.
With regard to the impact of physical factors and technical agencies, Abu Khamseen confirmed the consumer has become more familiar with tourism products, and agents have effectively become consultants to their clients and not just a channel to make reservations and buy tickets. He said technology has reduced the importance of the agent, prompting a change in their approach.
He outlined a number of challenges the sector faces, including low profitability since the cancellation of airline commission rates and the tendency of airlines to only advertise the basic cost of tickets and not mention surcharges such as taxes, as well as the poor performance and unprofessionalism of travel agents. This was in addition to the lack of qualified staff and the absence of a regulatory framework for the movement of flights.
Abu Khamseen called for the need to found an umbrella group to bring the sector together and discuss issues such as training and education outcomes in this area. He said there was also a need to work to regulate agencies in a way that better facilitates the employment of women in a more flexible working environment or from home. He also suggested the Saudi Commission for Tourism and Antiquities (SCTA) increase efforts to support the agencies that deliver organizational, technical and human resources training.
Rashid bin Abdullah Almuqeet, vice chairman of the Advisory Committee for Travel Agencies, said agencies are trying to play a major role in e-commerce, but the payment system, which offers great facilities for domestic airlines, does not allow travel agencies to use such facilities because it allegedly cannot handle great demand.
He said the SCTA has tried to overcome these obstacles with the Saudi Arabian Monetary Agency. He also stressed there are many issues that need to be addressed. The agent so far does not have a specific mechanism to evaluate its performance or monitor clients, he said, adding it is forced to meet its obligations within a specific timescale. He called for the establishment of an association to protect the rights of agencies.
Mohammed bin Hamed Ramadan of Suit Agency for Travel and Tourism argued the Saudi market is very attractive for those wishing to compete in this area. He said the global economic crisis, which affected many countries of the world, had no significant effect on the Saudi market. However, Ramadan pointed out the market lacks many things. The agencies are still scattered and need to be brought under an umbrella to guarantee their rights, he added.
"Since the SCTA started looking after the sector, it started paying more attention to the sector and started to protect, regulate and organize all avenues that will lead to the creation of a healthy sector that would provide strong benefits to the national economy," Ramadan said.
He said the disadvantage with respect to companies and sites operating from abroad via the Internet is that the profit goes outside the country and does not benefit the Saudi economy, while local travel agencies' revenues go back into the national economy, benefiting both its owners and its employees.
Walid Ibrahim Subaie, head of the travel agencies and tourism committee at the Riyadh Chamber of Commerce, said the travel agency is a major source of income for the airlines and other service providers and tourism services. He cited a number of challenges faced by the sector, including reducing the grace period for payment to only one week for agencies, the increased fines imposed by IATA, and the airlines' reduced reliance on agencies.
Dr. Salah Al-Bakheet, SCTA's vice president for the investment sector, said the commission presented draft regulations for three sectors of the tourism industry, including travel agencies, tourist guides and shelters. He said the proposal was submitted in 2005 and is still awaiting approval.
He noted the establishment of advisory committees to play a role in these associations and work with agencies, adding: "We want to reach solutions with IATA to the problems involving travel agencies and facilitate procedures as much as possible and we are ready to listen and initiate dialogue with these agencies."
Meanwhile, it was disclosed that more than SR20 billion worth of tourism investment opportunities in the waterfront project in Yanbu Industrial City were promoted by the Royal Commission for Jubail and Yanbu at its stand.
The project, which has been divided into 14 regions for development purposes across 11 kilometers. The project will serve as an outlet for the city's residents and visitors.
The Royal Commission is seeking to introduce sustainable tourism in the region, which in turn should lead to a diversification of the economic base of the city and region and create jobs. The idea of the project is to protect environmental and nature reserves on the beach, demonstrating the commission is also interested in promoting eco-tourism.
The project consists of waterfront areas to attract tourism to the city of Yanbu and provide services including parks, beaches and marine recreational areas, restaurants and hotels.
The project includes the installation of a lighting network and the establishment of a power network with integrated underground irrigation system and communications network. It also includes the construction of facilities including entertainment spots, stalls and parking lots, toilets, landscaping and footpaths.