As multinational corporations begin to bring travel in the Middle East into their global travel management programs, many find "more questions than answers" as they determine how best to proceed.
The most basic of the questions is how to define what is the Middle East for travel management, Alshamel International executive vice president Benjo van Laarhoven said during an Association of Corporate Travel Executives meeting here last month.
"Do we want to include Morocco and Egypt in the Middle East? For the purposes of this conversation we do, but don't tell a Moroccan that he is part of the Middle East." Control of spending in the Middle East often includes expenditures of West Asia and North Africa, he said. "This conception of the Middle East is very North American- and Western European-driven."
Shell International manager of business development for travel Albert Kilsdonk said Africa and North Africa are often included in the Middle East. Based in the Netherlands, Kilsdonk said he has been trying to bring the region into the global travel program, but often has "more questions than answers because the Middle East is still a challenge."
One of the myths in perception, van Laarhoven said, is that the "Middle East is a single entity and one approach will work across all territories." In reality, the differences in culture, currency, language, attitude and people in each country in the region often necessitate different approaches to manage travel.
"It is far more diverse than anyone would think," van Laarhoven said. It is the region of the world with the highest percentage of the population under 18. Consequently, when one considers technology integration, the process is often completed far faster than in Europe. "Despite everyone thinking online booking needs to be in Arabic, not so," said van Laarhoven. "All the young people can speak English."
While some consider the online corporate booking market to be immature in the region, there are examples of deployments with adoption rates greater than 65 percent, according to Doran Fanning, travel service manager for Musanada, the shared services provider for the government of Abu Dhabi. The challenge, he added, is that workers are accustomed to the consumer booking tools.
Government workers in Abu Dhabi currently are not mandated to use Musanada's services for travel, although they are required to use it for other categories, Fanning said. Consequently, the office must show "our government colleagues that we can provide services at a very competitive price by aggregating these too. Most of our target audience is in the United Arab Emirates or leaving U.A.E."
Musanada currently manages about 2 billion dirhams (US$545 million) in annual travel spend. "We'd like to be managing a lot more," Fanning said. The goals are to "encourage self-service and online adoption and streamline the end-to-end process from procurement to payment and expense management."
Mandates to use preferred travel services are important in the region, panelists agreed, but often are tough to get. Short of a mandate, the job becomes one of change management. Shell first "consolidated service in one country, now the next step is regionalization in a regional center. But it's all change management," Kilsdonk said.
Highlighting recent developments in the region, van Laarhoven said nine new low-cost carriers began servicing the region in 2009 and a 10th carrier began this year. The region has experienced the "largest growth in low-cost-carrier capacity, increased focus on the best buy and a rapid move to a no-commission model," van Laarhoven said to refute the myth that the Middle East travel management community is focused on service rather than costs.
Van Laarhoven added that there are hotel chains, "but under different management companies. Last room availability is something you don't negotiate anymore in Dubai. Instead of negotiating once a year, you negotiate once every three months because rates are rising too fast." While hotel rates in Dubai in recent months have been decreasing, "Doha is getting more expensive."
In payment, the Middle East is a "region driven by per diems and voucher payments with low credit card adoption. The penetration for air and hotel is below 10 percent," van Laarhoven said.
While Middle East travel agencies that focus on managed travel strive to offer more comprehensive business solutions, as many in the West now market themselves, the reality is that today "90-to-95 percent of all activity for a TMC is almost all fulfillment. But agencies are in the process of growing into TMCs," van Laarhoven said.