Consumer Segments of The Middle

East Part II Leisure and Business Visitors

December | 2009

Consumer Segments of The Middle East Part II I Leisure and Business Visitors

The second in a series around the most common and important market segments observed in the Middle East and strategies / tactics to acquire and serve them effectively…

Our second market segment studied in this series is visitors, comprised of leisure and business travelers. This segment is a substantial and valuable one, particularly in places like Dubai and Qatar that have become business and tourism hubs in the region.

Acquiring the Segment

Although the length of relationship with customers in this segment is significantly shorter than with those in other market segments (thus calling for a cost-effective, mass acquisition strategy), these customers can be identified and targeted in groups in a relatively easy manner.

A couple of opportunities for targeting them along their visit cycle are:

Before Arrival: Almost all visitors look for information about their new destinations before arrival through both offline and online means. Companies can tap into this opportunity by advertising on popular travel sites, participating in discussion forums about the country, becoming more active on social media related to the country or even building their own content that provides valuable information for tourists.

An example of this is the One & Only Royal Mirage hotel advertisement on Google search for keywords ‘travel Dubai’. Utilizing a similar approach, companies can build strategic partnerships with leading tour operators to pass on their marketing messages and promotions to the upcoming visitors.

Flight & Arrival: Similar to the expat community, mentioned in our first article, air travel is an ideal medium for gaining access to hundreds of visitors arriving to a new country at once. These visitors are already segmented by value, via their choice of airline and flight class, thus allowing companies to target their ideal base of potential customers. Via partnerships with airlines, airport taxis / limousines, or through opening a booth at airports, it is possible to reach out to this segment as soon as they arrive.

An example of this in action is the in-flight NTT Communications SIM Card sales on Japanese Airlines flights, allowing the telecommunications giant to make a sale to the visitor before they even land in Japan.

Accommodation: One of the easiest methods of accessing both leisure and business visitors in mass is through hotels and serviced apartments, as most visitors will be utilizing these types of accommodation. Similar to the case with airlines, visitors have segmented themselves based on their value to a certain degree (price of hotel, room vs. suite, etc.), again allowing companies to target their desired potential customers in an efficient manner.

An example of this method of targeting visitors is visible in Dubai, where most major malls offer shuttles to and from the major hotels (as tourists are a critical segment for malls, some go as far as offering shuttles from the mall to the airport, catering to last-minute shoppers).

Transportation: Temporary transportation is an additional primary need of most leisure and business visitors. By advertising on metros, buses, and taxis, and partnering with leading car rental agencies, companies can gain access to visitors during their visit.

A relatively more advanced example of this in action is the Taksi POS service by Vakifbank, which provides POS functionality for paying for taxis with credit cards, and gives information about the city on LCDs, in taxis in Istanbul.

Communications: As the third basic need most visitors will have, the communications platforms – especially mobile and internet – provide opportunities for acquiring the visitor segment. Today, some telecommunications operators in the Middle East, such as du, provide tourist packs, which are valuable means for promoting any product or service relevant to the visitors. Similarly, partnering with the mobile operators, companies can gain access to those which are roaming or using prepaid tourist SIM cards for communications and send SMS or MMS messages to them. Leisure: Malls, tours and touristic spots are effective locations for reaching out to leisure visitors, which can be done through partnerships, billboards and distribution of brochures. Especially in smaller countries that have a relatively smaller number of popular touristic spots, visibility can generate handsome returns on investment. Alternatively, companies can organize their own leisure events to get these visitors to come to them. Business: Similar to the leisure visitors, business visitors can be reached out to in masses during certain events, such as exhibitions, seminars and trade shows. By sponsoring these types of events, or partnering with their organizers for direct access to the attendees, companies can market their services and products to white-collar business visitors.

Serving the Segment

Although their visit cycles have resemblance, the needs and expectations of the leisure and business visitors have significant differences, as does their motivation for using different products and services. Hence, companies should focus on understanding and serving each of the visitor community sub-segments based on their differing needs:

Leisure Visitors

As potential customers in this segment are traveling for leisure, one of the key needs that should be satisfied to address them is access to up-to-date information on key touristic spots, entertainment events, and activities. An example service for serving this specific need is provided by Globe Telecom of Philippines, which provides Tourist Information Services as a hotline for inbound roamers, including information on food & entertainment, festivals & calendar of events, all of which are provided through an IVR system.

Most tourists seek to avoid hassle when they travel to a new destination, making all value propositions providing convenience for them more than welcome. Any service provided by companies to make their day-to-day routines easier in this new environment can gain their full interest. A sample of such a service is the Thailand Dial-a-Service provided by DTAC, which allows inbound roamers to dial the name of international corporations by dialing their first 3-6 letters (e.g. AVIS-2847) after which the system connects to the companies’ customer service hotline in Thailand. Since leisure tourists are usually one-time or infrequent visitors to the destinations in the Middle East, they are more interested in immediate benefits rather than promotions they may benefit from once they get back to their home countries. Traditional loyalty-building promotions such as free minutes for the next 12 months, or long-term offers such as a car raffle to be announced two months down the line, are less attractive than discounts or freebies they can get immediately. Access to financials is one of the key requirements and challenges most tourists face in a new country. Not sure whether they will be able to use their overseas credit card or not, and not willing to carry around high amount of cash, tourists would welcome any alternative means for payment, such as mobile payment options, or the prepaid card offered by The Malaysian Bank Islam, Tourist Friend MasterCard, which not only allows customers to get a local fully-functional card immediately, but also provides discounts of up to 70% across hundreds of merchants. Last, but not the least, some of the tourists have language barriers, not only against Arabic or other local languages, but also English as well. Any service which can help them in overcoming this barrier, such as the multilingual call center (with English, French, Flemish, German, Persian and Russian) of Turkcell, and its dictionary applications for roamers, would increase their likelihood of preferring a local company to another.

Business Visitors

Unlike the leisure visitors, business visitors are more likely to return to their destinations in relatively short-time intervals. Some even relocate after a while, making them attractive targets from a lifetime value perspective. As a consequence, for the business visitors, companies can focus on longer-term promotions, which are valid for months to come, making sure that the visitor comes back to the same company on the next visit. Similar to the information about touristic destinations in the case of leisure visitors, the business visitors are in need of information on the local economy, business events, different sectors, companies and entities such as the chambers of commerce. As an example value proposition, some business hotels in the region deliver local financial newspapers, magazines and even annual sector reports to the rooms regularly, which can be extended across other sectors. These visitors need not only information about the local economy, but want to keep in touch with the developments in their home markets. Some companies, such as Le Royal Meridien Beach Resort and Spa provide international news kiosks which print out and deliver the latest version of international newspapers from various countries, serving such need. In addition to information, business visitors also need business facilities, such as fax and e-mail, to stay in touch with their overseas business contacts. Most hotels already provide a decent level of service, with a business center or in-

room facilities. Yet, other industries can also tap into this opportunity, like the SingTel’s Wireless Surf offer, where inbound roamers can use hotspots all over the island and charge it to their mobile lines.

With millions of visitors flying in every year, most Middle East markets present sizable opportunities for companies which are willing to focus on the leisure and business visitor segments. Companies should research the culture and needs of visitors to their own countries, as each attract a different mix of nationalities and life-styles and develop specific value offerings based on them that differentiate themselves from the competitors. The opportunities listed in this article are just a few examples to begin with. Still, a good start for many…

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