Paulina Klotzbucher, managing director
South Africa-based Travelstart sees itself in an ideal position to expand into the Middle East. Its experience gleaned in bringing online to offline markets in the past two decades as well as its development in smaller countries could put it in a good place.
According to Travelstart managing director Paulina Klotzbucher, the company also believes the region is an exciting prospect going forward because of the tech-savvy consumer and payment trends such as the move to card payments.
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 of Travelstart, says why she’s excited about the region’s potential.
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.
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.
Another focus is aligning product with market requirements as they have shifted somewhat over the years. For instance, app and mobile are the main channels to communicate and we need to up our game a bit there.
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 continue 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
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. Further, our expertise comes from two decades in smaller markets, Scandinavian markets and African markets. The Middle East is also not ONE market – they are many smaller markets where you can’t use a one size fits all.
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 settlement so that consumers are not hit with unexpected forex charges on their credit cards.
Nothing beats a great local player. They have their eyes and ears on the ground and can localize in a way that doesn’t make any financial sense for a global player.
The problem is often as markets and customers' behavior mature, local players have a problem to keep up with customer expectations.
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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 drifting 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.
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.
What can you do better than global?
Move fast, react to customer changes, find gaps in the market, build scale locally quicker and become top of mind amongst customers.
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 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).
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.
*This article originally appeared on WebInTravel.