Al Tayyar Travel Group diversifies revenue mix in 2017, online travel hits SAR 1.4 billion
- Gross booking value of online travel jumps 180% in 2017 vs. 2016
- Hospitality tripled its revenue as all 5 hotels become income generating
- Car rental revenue grows by almost 50%, becomes profitable for the first time
- Focus in 2018 on online travel and mid-market hotel segment
Riyadh, Saudi Arabia – Al Tayyar Travel Group (the “Company”) (Tadawul: 1810), a leading regional travel and tourism management company, today announced year-end 2017 net revenue of SAR 2.11 billion ($562m), in-line with SAR 2.14 billion ($570m) in 2016, aided by a tripling of revenue from the hospitality division and a 48% jump in car rental revenue which helped offset weaker revenue from some Government contracts.
Al Tayyar’s gross profit was SAR 1.6 billion ($426m) in 2017, down 4% as compared to 2016. Operating profit was SAR 680 million ($181m), 25% lower than 2016. Net profit attributable to the parent of the company was, SAR 497 million ($132m), down 39% percent from the prior year. Net profit, excluding one-off impairments, would be SAR 593 million, down 34%, instead of 39%, from 2016.
“We have made solid progress in implementing our strategic business transformation which has led to a more diversified revenue base, whereby high potential growth businesses are compensating for maturing legacy businesses. A case in point is that despite the significant revenue decline from our Government business, we achieved very strong growth in online travel, which experienced a gross booking value of SAR 1.4 billion, up 180% from 2016,” said Abdullah Aldawood, Chief Executive Officer of the Company. “Furthermore, our hospitality division tripled its revenue and income from international operations shot up 38% year-on-year, owing to our UK operations. We are tapping new growth opportunities by sector and geography, which is balancing our portfolio nicely and reducing risk in the process. Gross and operating profit fell mainly because of thinner margins and the consolidation of Portman Group.”
The Company embarked on a strategic transformation program in 2016, to diversify its revenue mix by focusing its expansion into other business areas that have a more sustainable growth trajectory.
In 2017, the two online travel brands, Almosafer and Tajawal, witnessed a 243% and 145% year-on-year growth in gross booking value, respectively. This is a strong indication of the high demand and strong growth of the online travel platform.
Commenting on the online travel platform, Aldawood said: “I am very pleased with the exceptional growth our online travel platform has amassed in a very short time. This is a testament of our ability to execute on very complex operations. We will continue to focus heavily on this business unit with the aim of reaching gross booking value of SAR 3.75 billion by 2020.”
The Company’s Hospitality business, which now has five fully operational hotels including the Sheraton Hotel in Makkah, recorded a revenue of SAR 65 million in 2017. Furthermore, in 2017, the Board approved to proceed with a strategic plan to monetize select lands in the Company’s land bank through the development and operation of mid-market hotels, under the globally renowned Choice Hotels International brand. The Company is also proceeding with the listing of the REIT in the first half 2018.
Commenting on the hospitality business, Aldawood said: “We will continue our efforts to attract more visitors to our five operational hotels and will focus in 2018 on developing mid-market hotels - and eventually managing and operating them through our master franchise, Choice Hotels International - within the Kingdom and across the GCC. We believe this is an underserved market, with a very promising outlook on demand and profitability.”
The Car Rental business had a solid year; its revenues jumped 48%, allowing it to become profitable again for the first time since its operations. The business managed a fleet of 5,021 vehicles.
-Ends-
© Press Release 2018
