In the world of aviation, the Middle East is one of the fastest growing regions in passenger traffic. According to IATA, the rate will continue to grow 4.6 percent annually until 2034.
Many see the market opportunity and are investing or collaborating with travel startups, one of which is Travel Capital Ventures (TCV), a multi-stage investment firm focused on identifying, investing, and growing travel companies.
Founding partner Abrar Ahmad, also a mentor and advisor at Dubai’s In5 innovation hub, sees great potential for the industry in the region. Of the 15 travel startups TCV has identified in the Middle East, it currently has stakes in 20 percent of them.
Ahmad sat down with Wamda this month to share his insights on this blossoming industry.
Wamda: Where do you see the aviation industry in the Middle East going and how has it evolved?
Ahmad: The aviation industry in the Middle East started by serving the needs of the region and now serve the needs of the world. It started by following others, and now is followed by others.
The bold vision set before the turn of the century by Emirates, Qatar Airways and Etihad Airways are bearing fruit today when looking before, during and after the flying experience.
Clearly this has resonated with worldwide passengers given the year after year growth in revenues, airport passenger volume increases, number of aircraft orders and increasing number of destinations and originating cities.
Wamda: What regional travel startups are you watching?
Ahmad: I point to companies like Fishfishme, Guiddoo and Batuta as notable travel startups and we’re tracking fie new entrants a year into the MENA travel startup space.
I believe the first phase of ‘copycats’ from other parts of the world have come and gone and we’re starting phase two of ‘from the region for the region’ offerings. Fortunately, these travel startups are typically more successful in the long term at addressing the needs of travelers in parallel with recent macro level increases in capital (angel funding, funding platforms, institutional money) and non-capital resources (incubators, funding platforms, co-working spaces) for early stage companies.
Wamda: What's the greatest challenge for travel startups serving the airline industry?
Ahmad: Like anywhere, travelers in the region have localized buying patterns, pre-purchase information requirements, and booking channel preferences that need to be addressed from day one for the travel startup to gain traction and ultimately secure funding… Leave aside the country specific requirements startups need to address so we aren’t blindly lumping all countries and all travelers in MENA together.
Travel startups need to spend time in the region, really do their homework, pick an underserved niche for a particular country and cater directly to that country. They need to avoid cookie cutter assumptions (it works there so it’ll work here) and lazy offerings (we’ll just reskin our site in Arabic).
Wamda: Do you see any collaboration between airlines and travel startups?
Ahmad: I do see collaboration between airlines and travel startups in and outside of the region.
Focusing within MENA, Arrival Guides provide multichannel English and Arabic language content to a number of airlines in the region and around the world.
Kaligo operates successfully in the loyalty space with at least one major airline in the region.
Tnooz, the travel trade media company will be holding at least two travel-focused hackathons in the region and I know of a major airline in the region that’s going to launch a travel startup developer offering in the next 12 months.
Also, although not a startup in the traditional sense, the new IATA NDC Standard allows air centric travel startups an XML standard to build upon to connect with airlines in the region. All major air carriers in the region have embraced this new standard.
Wamda: Why would you push for collaboration between airlines and startups?
Ahmad: I would push for more collaboration between airlines and startups because each has something to offer and something to gain. Airlines have historical interests and stakeholders and cannot be as nimble as a travel startup. However, airlines can leverage the external innovation travel startups bring to the table in return for access to their worldwide client base and network.
I believe the majority of the burden is on the travel startup to correctly identify, develop, and service the unmet needs of the airline. Airlines need to be, and increasingly are, open to dealing with travel startups to help address the ever growing, ever changing, and ever demanding needs of the traveler.