INTERVIEW-Saudi's Tayyar to expand online travel business into Egypt

RIYADH, Dec 14 (Reuters) - Al Tayyar Travel Group, Saudi Arabia's largest travel company, is planning to expand into Egypt in early 2018, its chief executive told Reuters.

The move is part of a broader restructuring to build the firm's leisure, hospitality and online sales services.

Al Tayyar announced on Wednesday that its board had approved a strategic transformation plan to consolidate its some two dozen subsidiaries into four new business units.

The plan shifts the firm's focus from a traditionally heavy reliance on government travel contracts into advising leisure travellers on tourism plans, operating hotels and developing Arabic-language platforms for online ticket booking.

"We will continue to grow 1/8online sales, invest in and upgrade these technologies, add new products, enter into new markets and continue getting much larger market share in the local market," said chief executive Abdullah Aldawood.

The announcement comes at a sensitive time for the company, after its founder and board member Nasser bin Aqeel al-Tayyar was detained in the anti-corruption probe led by the kingdom's powerful Crown Prince Mohammed bin Salman.

Tayyar owns a 12.8 percent stake in the company, according to Thomson Reuters data. Aldawood said the firm has received payments from government agencies since the detention and has not communicated with Tayyar.

"We have received direct communication from senior ministers in the cabinet conveying the government's full faith and support for the company," he said. "We continue our business with government agencies as usual."

Aldawood said Al Tayyar plans to relocate around 30 of its existing retail locations to high-traffic areas such as malls, where they will promote aspirational tourism trips.

The company is also planning to list a real estate investment trust (REIT) on the stock market in the first quarter of 2018 and develop 30 new mid-market hotels with 6,000 rooms, building off a 2016 agreement with U.S.-based Choice Hotels.

The REIT, which Dawood said would be worth hundreds of millions of riyals, would consist of Al Tayyar's undeveloped land holdings as well as equity from third parties and debt from banks.

It will be used to fund hotel development in Mecca to cater to the increased numbers of Muslim pilgrims Saudi authorities hope to attract for the hajj and umrah pilgrimages.

Building the hotels will also help Al Tayyar avoid penalties on its undeveloped or "white" land, which Saudi Arabia is beginning to tax in a bid to boost commercial activity and address a politically sensitive housing shortage.

Aldawood said Al Tayyar would add jobs as part of the expansion in hospitality and online sales, but declined to say how many. There would be no structural layoffs, he said. (Reporting by Katie Paul Editing by Jeremy Gaunt)