Foreign Travel Sites Enter Iran

EghtesadOnline: Online booking industry in Iran is becoming increasingly crowded, with several new entrants vying for the money in the pockets of travelers.

News ID: ۷۳۸۷۹۴

22 December 2016

Two foreign-backed travel websites, namely WeGo.ir and TravelStart.ir, have entered the Iranian online travel business over the past six months, attempting to take a slice of the grossly undercooked travel pie.

WeGo, a Singaporean-based firm, has been offering travel services for the better part of a decade and sees the Middle East market, Iran in particular, as a huge driver of their business in the next few years.

The online search engine, for example, says it believes that it and a few others have managed to secure a “first-mover advantage” by creating dedicated websites and services for travelers in the Middle East – Iran is now included in that business decision.

The company’s general manager for the MENA region, Mamoun Hmedan, speaking at the WebInTravel conference in Singapore in October, said: “WeGo has seen 700% growth since 2013.”

He said, “This is driven at this stage by a trend towards tourists looking mostly for flights (65% vs. hotels at 35%).”

However, South Africa-based TravelStart has already made a push to raise its brand’s profile in the local market.

The firm, which has investment from MTN and received $40 million in February to develop its business, entered the Iranian market by purchasing another industry player called travolna.com.

Travolna was originally set up by an Iranian and Uzbek team in January 2015. However, the website now redirects users to TravelStart.ir.

Travolna.com now says “ to help you search for and book airline tickets and hotels, we have launched www.travelstart.ir.”

Founded by CEO Stephan Ekbergh, South Africa’s Travelstart has operated from headquarters in Cape Town for the past ten years and claims to have more than 75% market share in South Africa and market leadership positions in Nigeria, Egypt, and Kenya.

TravelStart.ir’s unique advantage compared to its rivals is the use of Telegram ‘bot’ which assists people with their bookings. The bot itself is a leftover of the Travolna service before the handover.

The software works through the messaging application’s open source coding which allows the computer program to give customers travel dates and ticket prices in local currency.

Local Competition

The two foreign websites have entered Iran’s travel industry at a time when it r is undergoing a radical transformation. In recent years several sites have opened up – some backed by traditional travel agencies.

The other local sites include Alibaba.ir (nothing to do with the Chinese company), Zoraq.com, Rahoja.com, Eligasht.ir, Rahbal.ir as well as hotel booking site hotelro.ir.

The slew of businesses offering ostensibly comparable and competitive services comes at a time when established travel agencies are seeing their profits decline as more people opt for price comparison features of such websites, Financial Tribune reported.

Several systems plug into the international booking systems, something which was impossible with international sanctions placed on the Iranian economy up until January. Some even list Iran’s domestic airlines like Eligasht.

The repealing of sanctions on non-US businesses making deals with Iran has facilitated a rush of foreign tech firms, those like the Singaporean and South African, to adapt their existing platforms to the Persian language.

Industry Overhaul

The advent of online booking and price comparison agencies comes as Iranian authorities admit that their previous system was outdated and needs massive overhaul.

Back in January, Jamshid Hamzehzadeh, president of the Iranian Hoteliers Association noted the lack of a user-friendly, feature-rich online platform to make reservations.

Hamzehzadeh said the lack of secure online booking was one of the major hurdles for the hospitality industry as well as tieing up the antiquated booking systems in the country with online platforms.

His comments came as he was launching his own online booking system, Hotelro.ir.