Seera, Saudi Arabia's largest travel company, expects to return to profitability by 2022 as inbound tourism rebounds and strong domestic demand continues.
The company expects to narrow its annual loss in 2021 as the kingdom prepares to reopen its borders to foreign tourists, chief executive Majed Alnefaie and Muzzammil Ahussain, executive vice president of consumer travel at Seera, said in the joint interview at the Arabian Travel Market in Dubai.
"The fourth quarter will be the real shining quarter if regulations open up," Mr Ahussain said, pointing to the cooler weather and reopening of local attractions such as Al-Ula during the winter season.
Saudi Arabia expects to reopen its borders to foreign tourists very soon, according to its tourism authority. The kingdom opened up its tourism industry in 2019, making it easier for foreigners to apply for tourist visas. Developing the nascent tourism industry is part of its Vision 2030 plan that aims to grow the non-oil sector, nurture new industries, attract foreign investment and create jobs.
Seera is expecting a "big number" of foreign tourists and is receiving visitor inquiries from Russia, China, Italy and the US about travel during Saudi Arabia's winter and spring seasons but these have not yet translated into bookings, Mr Alnefaie and Mr Ahussain said.
"There is a long lead cycle for international markets because of marketing campaigns to educate travel agents about Saudi Arabia," Mr Ahussain said.
On May 17, Saudi Arabia lifted a ban on international travel by Saudi citizens, which was imposed last year to contain coronavirus infections in the kingdom. Saudi citizens thronged airports and the causeway to Bahrain after the ban was reversed.
Seera is recording relatively late bookings about seven to 10 days prior to the departure date to Egypt, Dubai, Bahrain, Maldives, Georgia, Sarajevo and Bosnia.
"Saudis love to travel all the time, we did a survey over three months and six months asking when people are ready to travel and we were shocked that more than 80 per cent were ready to travel from the first of the border opening," Mr Alnefaie said. "We have to return the trust of the clients and new regulations from each country and that will drive people to go to Europe, America, to the Gulf."
Still, the domestic travel segment remains an important part of Seera's business.
"We are very excited about the opening of borders but domestic [tourism] is a big part of our business," Mr Ahussain said.
Domestic travel has "stayed strong", including not just leisure trips to cities like Jeddah and Abha, but also corporate travellers going to business meetings within the kingdom, he said.
Countries around the world have seen a faster recovery in domestic travel while international journeys continue to lag behind, according to Iata.
With the phased easing of travel restrictions in Saudi Arabia, Seera is focusing on consumer travel, hajj, ummrah and business travel. The company is also evaluating investment opportunities in yachts and desert camps and plans to build new hotels, Mr Ahussain said.
Seera's capex for tourism investments in 2019 to 2022 is about 500 million Saudi riyals ($133m), he said. The company aims to increase its marketshare of inbound travel and religious travel by packaging both together.
During the Covid-19 pandemic, which hit the global travel and tourism industry hard, Seera laid off 15 per cent of its workforce in 2020 and currently has 3,500 employees in Saudi Arabia, the UAE, Egypt, Spain and Jordan, Mr Alnefaie said.
However, the company plans to hire 250 people this year amid expectations of a market rebound, Mr Ahussain said.