The trend among travel companies in the Gulf region has been to invest in expanding their human resources rather than spending on IT
Cutting HR costs
So why have travel agencies in the region been so reticent about investing in the latest technologies?
The experts agree that generally companies prefer to invest in human resources rather than make major upfront capital investments in technology.
“People don’t mind spending on HR but they never have an IT budget,” explained Baig.
| Advertisement |
“When you talk about an IT strategy you are talking about a capital investment, which looks big in a size — a proper software solution could cost US$100,000.
“But they prefer to hire more people, which over a period of time will cost far more than that.”
In fact, accoording to Baig travel firms could slash HR costs by up to 50% just by investing in the right technology.
Memon believes that this attitude is slowly changing in the region however as recruitment costs become ever more expensive.
“People always say it’s cheaper and easier to hire more people to get the job done. I remember conversations with some of the biggest agency owners in this part of the world and we would say it’s going to cost US$100,000 - $200,000 [for a software solution]. The retort would always be — do you know how many people I can hire for that money?
“But now businessmen are feeling the pinch of the whole HR process and that is changing. It’s just a question of time before you can’t have that approach anymore.”
Christian Belzner, from Dubai-based ISO Travel Solutions added that while the “desire” for IT is very high, “there is still a gap between desire and capability for investment.”
“Some companies have realised that they have to invest in proven and innovative technology, but others have paid a high price to realise this,” said Belzner.
“What’s most underestimated here is the fact that it is necessary to have a team in place to feed, manage and work a new IT solution,” he added. “In Europe this has been realised quite a while ago and guarantees successful implementation. In the UAE the desire is that everything goes automatically without any manual work. Projects are started over and over again without any final goal.”
Search our database of more than 2,700 industry companies
Mar 11, 2012 , Saudi Arabia
Looks like Mr Kabir himself has to update his knowledge. We were forced to throw their system out of the window.
Oct 4, 2011 , United Kingdom
Once again a online travel marketing article that doesn't address the number one thing when you want to be heard (and remembered) online. A top quality .com domain name. Location Location Location It applies even more so online than it does to a traditional bricks and morter based business.