Knowing well that a sizeable majority of people in Mena don’t use
credit cards, Yamsafer, this January, became the first booking site to
offer ‘card-less bookings’ worldwide, writes Anand Holla
By connecting travellers to the juiciest of hotel deals across the Middle East, Yamsafer, in turn, has enjoyed a largely satisfying journey.
Three years after three young Palestinian entrepreneurs launched the Arabic-English online hotel booking site, the gen-next enterprise has swiftly grown to become the leading regional player in the hotel booking space.
Much of the Ramallah-based start-up’s success is thanks to its clever move of keeping credit cards out of the equation. Knowing well that a sizeable majority of people in the region don’t use credit cards ’90 per cent of e-commerce transactions in the Middle East happen with cash-on-delivery payments — Yamsafer, this January, became the first booking site to offer “card-less bookings” worldwide.
This meant that a customer needn’t have a credit card or make a pre-payment to confirm a booking, and yet one could book a huge inventory of hotels in Mena and Turkey online at discounted prices.
So a customer can make a reservation in the plushest luxury chains or the warmest, family-run boutique hotels who have partnered with Yamsafer, only by providing his or her name, cell phone number and email address.
Armed with a reservation-confirmed SMS, the customer can pay the tariff in cash upon arriving at the hotel. It’s a win-win situation, says Yamsafer, as hotels can use this approach “to shift extra inventory” without eating into their “existing market or diminishing their brand via overt discounting.”
Upping their game, last week, Yamsafer (which means Hey Traveller in Arabic) released its mobile app Yamsafer Express (currently only in Arabic). Powered with a smooth user interface, the app connects spontaneous travellers with hotels that want to dispose of last-minute room inventory at steep discounts of up to 50 per cent or more. With limited hot deals in the offing, app users can grab “last minute” hotel rooms at fantastic rates.
Faris Zaher, CEO and Co-Founder of Yamsafer, points out that mobile devices make up two-thirds of their web traffic, with half of mobile transactions being same-day or next-day bookings.
“The regional traveller’s booking window is very short. As a result, hotels struggle to control occupancy rates. We built Yamsafer Express for this very reason. It’s a distribution channel that is meant to provide soft-landings to revenue managers in a scenario where occupancy rates fall below expectations,” says Zaher.
As the website directly connects customers to hotels, customers manage to get typically lower than average hotel rates, says Zaher.
With Yamsafer already having involved more than 300 of its properties in Bahrain, Kuwait, Saudi Arabia, Jordan and Palestine to participate in the app, it’s clear that last-minute bookings make for a lucrative market.
Zaher explains how it works. “We have been engaging with the market for quite some time now, specifically in the intra-regional travel-space. On one hand, travellers are already making last-minute travel decisions, and the fact that most regional travel is done by land rather than by air also contribute to spontaneity. This, together with the GCC region’s smartphone penetration rate, makes for good market conditions.”
This model will allow Yamsafer to transact more frequently with their existing customer-base, feels Zaher. “The ‘last-minute’ niche will also serve to expand our core business. On mobiles, we are acquiring customers more cheaply and at a faster rate,” he says.
A year after its launch in September 2011, Yamsafer’s operations skyrocketed thanks to a $1 million investment by the Palestinian firm Sadara Ventures. What began with $12,000 of seed funding from the three co-founders is now hurtling towards expanding its operations to a network of 2,500 properties spanning the Mena region in 22 Arab countries and Turkey.
Currently, Yamsafer lists around 3000 hotels in 16 countries throughout the Mena region plus Turkey, and an average of 300,000 users visit the Yamsafer site every month. With an unwavering focus on the local market, Yamsafer also allows its customers access to destinations on partner sites like Expedia.
Apart from offering impressive deals and familiarising travellers to a wide range and styles of hotels, Yamsafer has gained ground for its quality Arabic content targeting Mena users in the online travel space.
Statistics on the Mena travel market show why Yamsafer may have all the right ideas and why it registered triple digit growth in sales for three straight months after launching card-less bookings last December.
Sample these statistics as compiled by Yamsafer: There are 110 million Internet users in Mena, and 30 million are shopping online already. Online spending in Mena is projected to grow from $9 billion in 2012 to $15 billion by 2015. Travel happens to be the biggest item bought online, and around 20-25 per cent of travel transactions in the region currently happen online.
Also, the UAE is the largest e-commerce market in the Middle East, with consumers spending $2.9 billion online last year. And the UAE travel market is the most mature, accounting for 47 per cent of the total market and 60 per cent of the total travel market in the Middle East.
Zaher says, “In terms of transaction quantity and size, the GCC is leading the way. Half of intra-regional travellers are GCC nationals.” Statistically, 1 out of every 4 intra-regional travellers is a Saudi national, and Arabs now represent about 80 per cent of travel activity within the region.
Little wonder then that along with card-less bookings, Yamsafer also introduced a new algorithm that rewards trustworthy customers who complete booking transactions at the hotel. To ensure that no-shows are below 10 per cent, which is the industry standard in the Middle East, Yamsafer rewards good customers with card-less bookings at several destinations.
“Average transaction amounts in the GCC are 230 per cent larger than what we see in the Levant, for example,” Zaher explains, “The GCC has also managed to avoid political turmoil and that has accelerated growth. GCC nationals who previously travelled to Syria, Egypt or Lebanon now travel to Jordan, or in most cases, travel within the GCC.”
In fact, the idea of Yamsafer was inspired from the growth in the Mena region, which continues to be the world’s fastest growing inbound and outbound travel market and has been so for a decade. With GCC travellers taking fancy to the UAE, Jordan and Bahrain, Yamsafer, too, is working keenly with hotels in such destinations. That its bigger competitors don’t provide card-less bookings has further cleared Yamsafer’s road ahead.
Zaher knows his business model has potential to achieve bigger goals. “I want Yamsafer to become a booking giant,” he says, “We are in a large, fragmented market that is expected to grow for the foreseeable future. Yamsafer is set on becoming a key player in that space.”
