KSA travel sector set for recovery as Saudis prepare for holidays

The Saudi Interior Ministry recently announced that vaccinated Saudis and those who have recovered from COVID-19 would be allowed to travel abroad as of 1 a.m. from May 17. (File)
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Updated 10 May 2021

KSA travel sector set for recovery as Saudis prepare for holidays

  • 80 percent of those surveyed plan to go abroad within 6 months of borders reopening

JEDDAH: Saudis are as eager as ever to explore other countries, with a survey by travel operator Almosafer finding that 80 percent are planning  to go abroad within six months of the borders reopening on May 17.

Speaking to Arab News in mid-April, Capt. Ibrahim Al-Koshy, CEO of Saudia, the Kingdom’s state-owned flag carrier, said initial bookings were healthy but “people are still a bit cautious about long-distance traveling.”

This was supported by Muzzammil Ahussain, executive vice president of the consumer travel business unit at Seera Group, the parent company of Almosafer, who found that initial interest among travelers was for locations predominantly within the Middle East and North Africa, especially nearby countries like Bahrain, Dubai, Qatar, and Egypt, as well as new locations like Bosnia, Georgia, the Maldives, and Morocco.

“This is what customers told us in Q1 in the survey, as the borders open soon, and this is exactly what we saw, there is a spike in the traditional countries that Saudis usually travel to in terms or searches and bookings,” Ahussain told Arab News.

Before the coronavirus disease (COVID-19) pandemic, European destinations like France, Italy and Switzerland were popular in the summer. “However, Europe now is not as safe as places like the Maldives,” Ahussain said. 




Muzzammil Ahussain, Executive VP, Seera Group

He added that Saudis have shifted their interest away from Turkey to alternative locations like Georgia and Bosnia.

Another recent trend Ahussain noticed is an increased preference for boutique hotels and alternative accommodation with a more personal touch.

Previously known as the Al-Tayyar Travel Group, Seera Group is the largest travel and tourism group in the MENA region. It was hit hard by the economic impact of the pandemic, with net profit down around 91 percent in 2020. While various subsidiaries of the company are recovering at different rates, Ahussain believed it would take time to get back to pre-pandemic levels. “Collectively, we are looking at a full recovery by 2023,” he said, while adding the general consumer travel division will “reach 50 to 60 percent of pre-pandemic levels this year.”

FASTFACTS

• Saudis are taking interest in visiting countries like Bahrain, Dubai, Qatar, and Egypt, as well as new locations like Bosnia, Georgia, the Maldives, and Morocco.

• Before the pandemic, European destinations like France, Italy and Switzerland were popular in the summer.

Seera Group invested in Dubai-headquartered ride-hailing app Careem in December 2014 and when the company was sold to international rival Uber it received a large cash injection when it exited in 2019. 

Ahussain said the Careem exit provided it with timely liquidity for the company’s balance sheet of around SR1.78 billion ($470 million). This helped it focus on Lumi, its homegrown car rental division.

Lumi was the key division for Seera in 2020, with its gross book value increasing by 27 percent year-on-year to SR434 million.

“Lumi, The group’s car rental unit is increasing, year-on-year, it is already above the pandemic numbers, it has not slowed down,” Ahussain said. “It increased its profit last year and it is expected to increase this year.”

Ahussain added that there are plans to expand Lumi’s digital offerings through rentals, used car sales, mobile workshops, and pick-up and drop-off services. The new platform is expected to be launched within two months. “We are heavily investing in the digital solution of Lumi,” he said.

The Saudi Interior Ministry recently announced that vaccinated Saudis and those who have recovered from COVID-19 would be allowed to travel abroad as of 1 a.m. from May 17.

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Sterling set for worst week since Sept. 2020

Updated 19 June 2021

Sterling set for worst week since Sept. 2020

LONDON: Sterling extended its fall against the US dollar on Friday, dropping below $1.39, hurt by the US Federal Reserve’s hawkish surprise and an unexpected fall in Britain’s retail sales.
The pound dropped against a strengthening dollar on Thursday after the Fed surprised markets by signaling it would raise interest rates and end emergency bond-buying sooner than expected.
On Friday, it fell further against both the dollar and the euro. It was down 0.3 percent on the day at $1.389, having touched as low as $1.38555 — its weakest since May 4. It was on track for its worst week since September 2020.
Versus the euro, it was down around 0.3 percent at 85.78 pence per euro, on track for a small weekly fall.
“GBPUSD remains bogged down below the 1.39 handle by a confluence of broad USD strength and a slight deterioration in near-term data,” said Simon Harvey, senior FX market analyst at Monex Europe.
“The limited impact of the data on sterling is largely because retail sales volumes remain above pre-pandemic levels and a shift in consumption patterns toward services after the May 17th reopening was always likely.”
For cable, market participants are weighing up the Bank of England and the Fed’s relative pace of possible monetary policy tightening. The BoE next meets on June 24.
BofA strategists said in a note to clients that it changed its view on the central bank’s tightening trajectory.
and now expects a 15 basis point rate hike in May 2022, compared to previously expecting no hikes in 2022.
“Brussels’ patience with London’s having its cake and eating it is wearing thin. Indeed, there is a risk of protocols being triggered and tariffs being threatened more seriously,” wrote ING strategists in a note to clients.
“The next few weeks could thus be a vulnerable period for Cable, where a break of 1.3890 opens up 1.3800/3810 — the last stop before an extension to the March/April lows of 1.3675.”


Bahrain’s Batelco could be first stock to be dual listed on Tadawul

Updated 18 June 2021

Bahrain’s Batelco could be first stock to be dual listed on Tadawul

  • Samba has been hired as an adviser on the deal

RIYADH: Bahrain Telecommunications Co. (Batelco) is planning to become the first company to have a dual listing of shares on Saudi Arabia’s stock exchange (Tadawul), Bloomberg reported citing people familiar with the matter.

The investment arm of Samba Financial Group has been hired as an adviser on the deal, the people said, asking not to be identified for information privacy.

No decision has been made and the company may decide against the dual listing, they said.

A spokesperson at Batelco declined to comment, while Samba Capital didn’t respond to messages seeking comment, Bloomberg said.

Tadawul has been trying to encourage Middle Eastern firms to dual list for years, without success. Aluminium Bahrain had considered a dual listing in 2014, but it never occurred.


Saudi Arabia’s National Debt Management Center wins global awards for second year

Updated 18 June 2021

Saudi Arabia’s National Debt Management Center wins global awards for second year

  • Saudi office won Middle East and emerging market awards

RIYADH: Saudi Arabia won the Best Sovereign Public Debt Office in the Middle East and the Most Impressive Emerging Market Issuer Award at the 2021 Global Capital Bond Awards, for the year 2021, for the second year in a row, SPA reported.

The Global Capital Bond Awards honors the achievements of governments and companies of all sizes in the field of sovereign and regional finance, banking services, hedge funds, and many other areas within the financial services sector.

It also highlights the most prominent innovations and achievements within the financial services sector, globally.

Saudi Arabia sold SR8.27 billion ($2.20 billion) of riyal-denominated sukuk in June, up from $941 million in May, bunt down from $3.1 billion April, National Debt Management Center data show.

“Driving growth of the Kingdom’s capital markets will be an increase in bond issuance to help fund the SR12 trillion Vision 2030," said Khalid Al-Bihlal, head of S&P Global Ratings KSA. "We project a gradual rise in the use of Saudi Arabian riyal-denominated bond issuance as the local capital markets develop. The US dollar is currently the currency of choice for such bonds."


Saudi MoF electronically linked to SAMA

Updated 18 June 2021

Saudi MoF electronically linked to SAMA

RIYADH: The Saudi Central Bank (SAMA) announced the completion of an electronic link with the Ministry of Finance to process requests relating to the bank accounts of government agencies held at Saudi commercial banks through the online portal Hesaab.

SAMA is seeking to improve and accelerate the procedures related to requests of government agencies’ bank accounts received from the Ministry of Finance, by implementing technical solutions with minimal human intervention, it said in a statement on Thursday.

The Hesaab portal is one of the National Transformation Program 2020 initiatives that improves the level of financial services, in line with Vision 2030.


Oil falls amid dollar strength; demand picture still bullish

Updated 18 June 2021

Oil falls amid dollar strength; demand picture still bullish

  • Prices remain close to multi-year highs
  • Dollar jumped since Fed moved rate-hike forecast forward

LONDON: Oil prices fell for a second straight session on Friday as the US dollar soared on the prospect of interest rate hikes in the United States, but they were on track to finish the week little changed and only slightly off multi-year highs.
Brent crude futures were down 64 cents, or 0.9 percent, at $72.44 a barrel as of 9:00 a.m. GMT, extending a 1.8 percent decline on Thursday. The contract is set to be largely steady for the week.
US West Texas Intermediate (WTI) crude futures were down 53 cents, or 0.8 percent, at $70.51 a barrel, after retreating 1.5 percent on Thursday and is also set to be flat on the week.
On Wednesday, Brent settled at its highest price since April 2019 while WTI settled at its highest since October 2018.
“Oil markets retreated sharply overnight as a stronger US dollar and falling commodity prices elsewhere saw the overbought technical correction continue,” said Jeffrey Halley, senior market analyst at OANDA.
The dollar has rocketed in the two sessions since the US Federal Reserve projected possible rate hikes in 2023, earlier than market watchers previously expected. A rising dollar makes oil more expensive in other currencies, curbing demand.
The prospect of rate hikes also weighed on the longer-term growth outlook, which would eventually hurt oil demand, in contrast to the near-term outlook for growth in demand as COVID-19 related curbs on movement and business activity ease and road and air travel pick up, said Westpac senior economist Justin Smirk.
“The near term’s all very positive. The question is how much further can it rise, how much scope is there if you’re looking at an environment where interest rates are going to rise,” Smirk said.
Oil prices also fell after Britain on Thursday reported its biggest daily rise in new cases of COVID-19 since Feb. 19, with government figures showing 11,007 new infections versus 9,055 a day earlier.
Adding to negative sentiment were remarks from Iran’s top negotiator on Thursday saying talks between Tehran and Washington on reviving the 2015 Iran nuclear deal have come closer than ever to an agreement.