Al Tayyar regroups to take advantage of Saudis tourism boom

Abdullah Al-Dawood, the chief executive, said on Wednesday that the board had approved a plan to consolidate its operations around four business sectors: Travel, hospitality, supporting business and investments. The revamp will involve a significant shift toward the online travel business, which has been a rapidly growing sector around the world.

The move will rearrange the company’s existing portfolio of brands — which includes relationships with big global names such as the Movenpick and Sheraton hotels — into the four new divisions.

A presentation from the company said the revamp would involve “rebalancing the asset portfolio,” prompting speculation that it might sell some assets, but a person familiar with Al Tayyar said it was more a matter of reorganizing businesses that had been allowed to operate independently for many years.

The company’s Tadawul-listed shares, which had suffered in the wake of the anti-corruption crackdown in Saudi Arabia, initially jumped on the news, but fell back in late trading to close at SR26.55, down 0.38 percent.

Al-Dawood said: “We look forward to turning a new chapter in our company’s history. As a leading travel and tourism company we are witnessing very exciting changes on two fronts: Firstly, the global travel industry is shifting and agencies are evolving from being airline ticket suppliers to holiday advisers and online booking service providers.

“Secondly, Saudi Arabia is undergoing an economic and social transformation, whereby the tourism sector is set to be a key beneficiary. Therefore, we are undergoing a strategic transformation which will allow the company to adjust to the changes, capitalize on emerging opportunities and expand into other growth markets,” he added.

Travel services and online travel will be the principal growth areas within the new division, to serve customers in the leisure, corporate and government, and Hajj and Umrah sectors. Al-Tayyar will significantly increase capital expenditure in online services, a statement said. New products will include travel insurance and holidays.

The company will add to its five existing hotels, especially in the mid-market segment through the Choice Hotels franchise.

Supporting business will include car rental, which will be refocused toward corporate business.

Its investment portfolio, which includes a big stake in online cab-hailing company Careem, “carries upside potential and expands our international reach,” the company said.