Seera says travel segment recovers to 2019 levels, expects continued contracts with major clients

Muzammil Hussain, Executive Vice President of Business Unit, Seera Group Holding

Muzammil Hussain, Executive Vice President of Business Unit at Seera Group Holding, said the travel segment recovered to 2019 levels, which reflects the ability and strength of Almosafer Travel & Tourism brand to serve travelers locally and internationally.

He told Argaam that Almosafer’s business grew by 52% year-on-year (YoY) in the first quarter of 2022, while the corporate and government travel management businesses rose by 5% YoY.

The consumer segment grew by 122% YoY, Hussain noted.

He indicated that the government and corporate agreements segment contributed about SAR 400 million to Seera's Q1 2022 results, expecting the firm to extend agreements with major clients, including the Ministry of Health, the Ministry of Defense and several companies affiliated to the Public Investment Fund (PIF).

Almosafer will likely show better performance in the second quarter to exceed 2019 levels, especially for the consumer travel business, Hussain said, adding that consumer travel reservations would exceed nearly SAR 1 billion in Q2 2022.

“The business travel segment is still strong,” the official said.

He added that Saudi Arabia is the largest market for Almosafer, accounting for nearly 85% of total reservations, followed by Kuwait and then the UAE.

The travel business dominates approximately 60% of Seera’s total value of reservations, Hussain noted, adding that Almosafer’s travel segment represents around 20% of revenues due to higher revenues from Lumi Car Rental.

Almosafer, according to the top executive, is the largest travel services provider for the Kingdom’s companies and government agencies, which constitute a market share of 20% and 25%, respectively.

The consumer segment’s market share, meanwhile, is difficult to measure due to the various travel booking alternatives, Hussain said.

He indicated that the market share of travel and online reservations, especially flights, stands at more than 75%, while the market share of leisure travel business is 20%.

Travel was battered by the Omicron variant, but it strongly improved from February to April, especially for regional and international destinations.

Moreover, the Umrah season during Ramadan and Riyadh Season, and also currently in Jeddah Season, contributed together to a strong recovery in travel regionally and internationally.

The top executive also expects increased travel activity after the announcement of the new 2022-2023 academic year calendar, which includes many weekends. In addition, Thailand receives a strong turnout of tourists during the summer season, as the Asian country became one of the top five destinations for travelers in the Kingdom.

Hussain noted that Almosafer is working on several projects, such as the Red Sea project that will start receiving visitors next December. The company also aims to gain more presence in the GCC region, especially in Bahrain, and Qatar to support World Cup 2022, on the back of the expected increase in travel in the Kingdom and the GCC.

Seera is also planning to offer to the public shares in its car rental business, Lumi, Hussain affirmed, expecting growth to continue over time with a bigger contribution to Seera’s operations.

Seera trimmed net losses by 52% after Zakat and tax to SAR 63 million in Q1 2022, from SAR 130 million a year earlier, according to data available with Argaam.