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Travel agencies barely survive pandemic

24 Jul 2021

The tourism industry has borne the brunt of the COVID-19 pandemic with travel agencies among the worst affected businesses.

Over the past year in Oman, many small travel agencies have shut shop, while bigger ones have closed down branches.

According to H E Salim al Mahrouqi, Minister of Heritage and Tourism, the tourism sector has lost about RO1.3bn due to the pandemic resulting in 25,513 direct and indirect job losses.

The World Travel and Tourism Council, the trade group representing major travel companies, projects a loss of 75mn jobs and US$2.1tn in revenue globally.

 

Cutting costs and salaries

With business coming to a grinding halt, Anfal MP, who operates World Air Travels and Tours,sent two staff of his three-member setup on unpaid leave. He had started the agency after quitting his job in Muscat in March 2020 just before the pandemic outbreak. “I am struggling to meet my daily expenses even after drastically downsizing,” he told Muscat Daily.

Mohammed Shajhan, who runs Royal Travels and Tours, too laid off the only other staff he had and now runs the show himself. “I am struggling due to uncertainty of travel restrictions. I earn hardly enough to meet running expenses and owe almost 12 months rent in dues.”

 Speaking on the condition of anonymity, an official of a major travel agency in Muscat said that on an average, 20 to 30 per cent of International Air Transport Association’s licensed agents have already downsized operations. “Most of the agencies cut staff salaries. Some sent expat employees on unpaid leave, while others terminated their services,” he said, adding that his company is closing down one division of the business.

Faiyaz Khan, general manager of Travel Point Oman, described his company as one of the fastest-growing travel agencies in the market. But it too downsized by closing five outlets in interior areas. “We stalled plans to expand to other GCC countries and the Indian market due to the pandemic. As soon as things go back to the pre-pandemic stage and there is a demand, we will not only re-open our closed outlets, but open new ones.”

 

 

Tickets for survival

Anfal rued the fact that the current market has limited offerings. “Before the pandemic, there were multiple options – umrah, holiday packages, visas and tickets. Ticket sales comprise only 30 to 40 per cent of the overall business of travel agencies. With the pandemic, the only option remaining is ticket sales, and that too is down 50 per cent.”

Currently travellers from 21 countries are barred from entering Oman, with the exception of Omani citizens, diplomats, health workers and their families.

“All small sub-agents are dependent on ticket sales, but with the restrictions in place for travellers from the Indian subcontinent, many customers cancelled their tickets while others put travel plans on hold indefinitely,” Anfal said.

Travel Point’s Khan noted that travellers from Europe and other western countries are very few in number; the bulk of the business in Oman comes from the Indian subcontinent. “Since the entry ban from Bangladesh, India and Pakistan, there is not much for travel agencies to do other than sell hotel quarantine packages.”

When the Supreme Committee tasked with tackling the impact of the COVID-19 pandemic made hotel quarantine mandatory, the travel agents started selling quarantine packages with hotel bookings. But that too was short lived due to the introduction of ‘Sahala’ as authorities made it mandatory for all arriving passengers to book hotels through this online platform.

Khan described the introduction of ‘Sahala’ as ‘surprising’. “When there is an industry licensed to book hotels and sell travel packages, introduction of another online platform by authorities takes away our right to do business.”

 

Going forward

Royal Travels and Tours’ Shajhan predicts nothing will happen in the next two-three years and leisure travel will take five years to reach the pre-pandemic level. “Overall, the tourism industry should be redefined by the authorities and they should make new operating guidelines. Agency licence should be granted to qualified people with travel and tourism industry background.”

The travel agency official who spoke anonymously said, “Compared to licensed IATA agents, there are a larger number of sub-agents in the Omani market. As they have a bigger share of the ticket sales, regularising the sub-agents could help the sector.”

 

(Text and photo by Syed Fasiuddin)

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