Tourism

Saudi travel firm targets Chinese ahead of IPO

November 21, 2024, 12:09 PM

Muslim Pilgrims at The Kaaba in The Haram Mosque of Mecca , Saudi Arabia, In the morning performing umrah — Saudi tour operator Almosafer is targeting Chinese tourists, particularly those interested in Hajj and Umrah pilgrimages, to boost its business ahead of a planned IPO

5m tourists by 2030
Direct flights to China
Religious and leisure tourism

Saudi Arabia is hoping to attract 5 million Chinese tourists by 2030 as part of a push that is also targeting Russia, Germany, Italy and the UK, leading tour operator Almosafer said on Wednesday, flagging a likely IPO within two years.

“China is the top tourist source market and you really need to have a unique catered offering that fits the needs of the consumer, so travelling in large groups, meals requirements, tour guides who speak Mandarin or Cantonese,” Muzzammil Ahussain, Almosafer’s CEO, said at a tourism conference in Dubai.

He said that Almosafer is working with partners in China like Trip.com to develop the right service offering. “It’s not going to happen overnight, it’ll take time but there’s a target of 5 million by 2030. There’s not a significant amount now [so] exponential growth is required.”

Ahussain said that Almosafer is also a partner of Klook, a Hong Kong-based travel platform.

National carrier Saudia started direct flights to China in 2023 and startup airline Riyadh Air is expected to do the same when it launches in middle of next year.

Ahussain said Almosafer’s government-backed Discover Saudi platform is promoting religious and leisure tourism, including an effort for pilgrims to extend their trips as vacations after visiting the Muslim holy sites during Hajj and Umrah pilgrimages.

Almosafer organises the Hajj element in cooperation with the government according to a global quota system for Muslims based on national population size, while tour operators have more freedom to manage Umrah packages, Ahussain said, citing a focus on Indonesia, Pakistan, Egypt and the rest of North Africa.

“In Saudi it’s about how you incorporate the culture. So in Riyadh you now have Diriyah which is bringing the Saudi Najdi culture,” he added, referring to the Diriyah giga-project, part of the country’s $1.25 trillion expansion plan.

About Almosafer

Almosafer was founded in 2012 and publicly listed Seera Holding acquired full ownership in 2018.

Talks for PIF to take 30 percent ownership in Almosafer – one of around six major tour operators in the kingdom – ended without result earlier this year.

Asked about plans for an initial public offering within 18 to 24 months, Ahussain said: “The capital market requirements are minimum 30 percent so that’s what we would at least do. The (Seera) Group will continue to be committed to the Almosafer offering.”

“There’s enough interest now in the Saudi market that it will be enough,” he said, when asked about other bourse listings, adding Almosafer is taking part in Seera roadshows.

“Almosafer has great potential. There’s no pure play travel company available on the stock market in the region. You could say Seera, but Seera has other investments,” he said.

“We’ve announced our three-year forecast for Almosafer which is a top line of around SAR12 billion ($3.2 billion) growth merchandise value. This year it’s around SAR7.5 billion, so there’s consistent steady growth and we have an earnings before interest, taxes, depreciation, and amortisation target of 1.8 to 2 percent,” Ahussain said.