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Alpha Destination Management: Change is the Only Constant for Growth

Samir Hamadeh, General Manager, Alpha Destination Management

Alpha Destination Management has over a period of time managed to capture a great share from different source markets. As a company, it has faced its fair share of challenges over the last 20 years just like the destination. Despite all the peaks and troughs, it is more optimism about the future that prevails in the atmosphere. This is reflected in the company’s growth as they have managed to grow at a faster pace than any other DMC. The positive outcome of the current year is proof compared to previous years, this can be attributed to several factors, one of which is market resonance. Issues that hindered the market sentiments such as a dip in the Russian and CIS market are seen to be improving. This is reflected in increase in numbers as the company has witnessed a major increase in bookings by approximately 47%; with a good performance from the UK market too.

The company has also strongly believed in retaining the hotel offering which is its core business while at the same time adopt new technologies and expand structurally. The business extension will be in activities and attractions.

The Product

As a company, Alpha plays in two different leagues – as a wholesaler and online tour operator which competes with companies around the world and with the UAE DMC business. In this sphere of business, there has been a lot of technological investment. This has been adopted to strengthen the company’s position in the light of growing merger and acquisitions in hotels and OTAs space; companies are also trying to build major powers in order to impose their terms and conditions. This new technological focus will help develop the Alpha DMC product while also improving its customer service. As Samir explains, “We thought, there was an advantage at this stage to move heavily and gain market share. In this growing dominance of mergers and acquisitions, it was important for us to find a strong partner within current entities not just for the UAE but globally. We are also looking to strengthen our partnership with hotel suppliers in order to offer a value added proposition.”

On the DMC side, the company has been working really hard on the attraction product. An example is the partnership with the Expedia Local Expert Programme. This contract is the first of its kind outside North America, which will provide a massive increase to booking of tickets, adventure activities and attractions within the tours and promotions programme. In turn, it will have a significant impact on the turnover and a great addition to the bottom-line.

The Growth Factor

Alpha Destination Management is keen to have a strong global footprint. With this intent, they have opened an office in Korea, focusing on the MICE and leisure segment. The result is nearly 4,000 people from Amway visited the UAE in Q1 of 2017. Another office was opened in India to target Indian travellers for both MICE and leisure. Plans are also being developed to evaluate other markets for expansion as a DMC.

Samir is of the opinion that as a company, Alpha has to focus on new emerging source markets. Based on experience, it is also very important to keep on promoting and creating new attractions and activities. Subsequently, it is essential to enhance existing business and have a stronger organic growth. Keeping with this thought process, Alpha has appointed a huge team of product developers who constantly provide new ideas to boost tourist numbers and volume from existing markets and partners.

Market Understanding  

The company has over the years grown in market share from these five key markets namely United Kingdom, Russia, Germany, the GCC and French market. In the GCC, Saudi has consistently been a strong market but this year, the company witnessed a slight dip in numbers due to the on-going situation. Samir is of the view that in order for the UAE to achieve a target of 20 million tourist by 2020, it is essential to have a different approach towards the GCC markets. There is a strong need to focus on domestic tourism just like most international markets do such as Spain, France, Italy or even the United States. Taking these factors into consideration, the UAE should focus on its regional counterparts such as Saudi Arabia, Kuwait, Oman and Bahrain and enhance accessibility. It is known fact that the future of Dubai in terms of tourism will be a strong dependence on long-haul business but a majority of traffic will also be driven from short-haul or domestic markets.

The company is adopting a different strategy for the Indian traveller moving away from the existing budget-conscious and value-added service. Alpha as a company has identified the potential of High Net worth Individuals from India. In keeping with this strategy, it has tied up with the Bird Group with offices in New Delhi and Mumbai.

The one ideology adopted by Alpha Destination Management is to look at a wider and diversified product within existing markets rather than tapping into new source markets. This has worked well and proved in numbers.

The Next Step

As a company, Alpha has invested a lot in technology. One of the key product enhancements would be the helicopter business in terms of sourcing new locations to complement existing locations at Atlantis the Palm. There has also been development on the online booking platform for the helicopter business including work on B2C activities and excursion tickets website. All the redevelopment activities will be rolled out within the first quarter of 2018 to be ready for the Arabian Travel Market. The B2C has also been quite a lure for Alpha who is looking to boost the product offering. The partnership with the Expedia Local Expert Programme in Dubai and Abu Dhabi is just one of the many big steps. The Expedia Local Expert allows Alpha to build the perfect activity itinerary for travellers with an insider’s perspective and local know-how following a face-to-face conversation with a local on arrival at a destination. This includes organizing of a wide range of activities such as ground services, tours and excursions, restaurant bookings, attraction tickets and promotion of retail outlets. During the first year, Alpha looks to serve over 600,000 passengers generating more than AED 50 million worth of business with attraction tickets.

As a company, Alpha looks to do things differently. In keeping with this thought, they are now looking to tap into the senior traveller market rather than millennial as it is a much bigger business globally with high disposable income. As per statistics, senior travellers spending power is higher than the Chinese and they are explorers.

Evolution of the business

Samir very confidently states that the DMC business will always remain as long as they learn to diversify their product offerings and offer value. He firmly believes that the online world is a Tsunami which all companies have to surf, to stand up and fight would be to get washed away. In a bid to surf this huge tide, adoption of technology with the right strategy is important. Online companies no matter how big their presence certainly need a local on-ground partner to co-exist and this is where a good DMC plays a pivotal role.

Riding on the diversification trend, Alpha would be developing a separate website for attractions, which should be ready within the next three to six months. The uniqueness of the website is that it will offer its local expertise rather than just being a listing platform. The company with an eight percent increase in overall business this year is confident of consistent growth in 2018 with a bigger market share. The company is also working with the Dubai Government to launch a product that would be attractive during the lean periods such as Ramadan. As Samir concludes saying, “We are investing along with authorities on creating a unique product that would be attractive during Ramadan period. In my view, 80% of the activities done outside of the Ramadan period can be done even during the season. It is all about the local experience here.”