Subsequent (and parallel) to the emphasis on ‘automation' by organisations the world over, the focus over the last decade has been on how best to extend this ‘efficiency' achieved through automation to the end user, i.e. the customer, for the benefit of the organisation. The internet has evolved as the logical and key solution in this respect and the web is now fast becoming the primary sales and distribution channel for companies. The UAE has the second highest internet usage in Middle East (ME) at 35.1% (after Israel at 51.1%) and ME as a whole averages at 10%.
This is less in comparison to the world average of 17.2%, however user growth in ME over the last seven years has been phenomenal at 491.4% and more than double the world average.
User growth in Gulf countries for the same period is also an impressive 460.16%.
This exponential growth of usage, creates a unique sales opportunity for companies in ME who are IT savvy to increase their market share and profits.
Travel industry impact
The travel industry in general, though one of the first to automate, has been relatively slow to adapt and benefit from available technological advancements. However, it is now catching up, driven pointedly by customer demand for quicker access to a) more accurate information and b) products/services, and in 2005, the purchase of leisure travel globally online reached US $51 billion and a staggering 44% of total online sales. Currently more than 30% of all travel bookings take place online and this figure continues to grow rapidly year on year. In the US it is expected that this year, for the first time, transactions on the internet will account for 54% of all travel bookings.
Technological advancements have also scaled the geopolitical barriers of markets and levelled the playing field considerably. Global entities that use technology and the web to access markets are already taking a significant share of the retail business from travel companies in the region. This trend will continue to gather momentum and it is imperative travel agents in the Gulf make the necessary investments in technology to ensure their geographical placement is retained as an advantage (i.e. competitive edge), thereby securing their success and survival in the future.
Solution
A dependable system that provides seamless integration from back office to front office and to web site/online distribution would require an initial minimum investment of approximately AED 500,000 ($136,000). This may seem a substantial investment for travel companies in an industry where income retentions are low compared to other commercial fields, but it is an ess-ential investment.
Travel agents also have the option to choose an e-commerce solution developed by major GDS providers.
These are offered to the trade for exceptional value and terms and are excellent entries to the field of online business. Subsequently the technology can be expanded to an independent ‘Management System' that can integrate flight content of GDS systems with the products/services of other suppliers.
Care should be taken to secure the right technology suitable for your business and this is difficult in a market prolific with vendors and a multitude of products.
Choosing the right system can be confusing and choosing the wrong system can be detrimental to your business. Reliability is key and technology of the system, expandability/upgradeability, uptime and security are some of the crucial areas that must be considered carefully.
A system crash means your business stops and compromising on the investment could mean compromising your business.
Once the right system has been chosen, a user-friendly web site needs to be developed. Finally, you must market the web site and this is best done by outsourcing to a professional company that will carry out web optimisation and other marketing functions. They will ensure your web site is found easily by customers browsing the web.
No matter how good your products or how well priced they are, if customers can't find your web site, you will not sell.
Asoka Ponnuswamy can be contacted by e-mailing asoka@vantageworks.biz or calling +971 50 3464567.
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