HUMAN CAPITAL AND ITS IMPORTANCE IN TOURISM DEVELOPMENT IN ALBANIA. A FOCUS ON ICT USAGE.

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1 HUMAN CAPITAL AND ITS IMPORTANCE IN TOURISM DEVELOPMENT IN ALBANIA. A FOCUS ON ICT USAGE. Ermelinda Kordha PhD University of Vlora Vlore, Albania ermes.k@gmail.com Dr. Fioralba Vela PhD University of Vlora Vlore, Albania fiorivla@yahoo.it PhD candidate Rezarta Brokaj University of Vlora Vlore, Albania rezartab@gmail.com ABSTRACT Tourism sector is accepted as one of the most important sectors for economic development in Albania, especially in Southern Albania, the study area for this paper. Tourism sector development cannot be conceived without the growing of tourism services availability and quality level, which is very important for tourists. Tourism enterprises number offering services in the sector is growing now in Albania, increasing in this way their needs for human resources. The level and quality for tourism services depends a lot on the human component, their abilities and competencies. In Albania, tourism sector is facing also a new phase in its development, the digital era. In most of the cases the abilities in using electronic instruments from the staff are necessary in achieving the requested level of quality and speed, despite other useful abilities such as communication, managerial abilities, etc. This paper is an effort of studding human capital and its importance in tourism development in Albania, especially focused on the level of Information and Communication Technology (ICT) usage in hospitality enterprises and the role of human resources skills and education. Key terms : ICT, human resources, tourism development, Southern Albania INTRODUCTION Contemporary information society has made Tourism a highly information-intensive industry as ICT has a potential impact on tourism business. The role of ICT in tourism industry cannot be underestimated and it is crucial driving force in the current information driven society. It has provided new tools and enabled new distribution channels, thus creating a new business environment. ICT tools have facilitated business transaction in the industry by networking with trading partners, distribution of product services and providing information to consumers across

2 the globe. On the other hand consumers are also using online to obtain information and plan their trip and travel. Information is the key element in the tourism industry. This industry is composed of different products and services, one of which offered by the hospitality sector, which in Albania is relatively new. Most of the enterprises have started to operate in the market after the 1990s. The tourism product is based mainly on the private sector, which has an important role to play as it should improve the Albanian tourism industry competitiveness by improving its managerial and labor force competencies, enhancing the quality of services, designing appropriate marketing mixes to attract and satisfy target markets and cooperating closely in order to achieve synergies. This is one of the most developed subsectors of tourism industry in Albania. This subsector employs a great part of all tourism industry workforces. First of all let us show the uses of ICT in tourism according to literature review. Then, we will make a picture of the need for human resource skills, especially those regarding ICTs. LITERATURE REVIEW, ICT AND TOURISM ICT pervades almost all aspects of tourism and related industry. For instance, we depend upon it right from the scratch while identifying and developing tourism site and destinations itself. The use of Geospatial Information Technologies in the recent years across the globe for varied purposes is popularly known and Tourism industry has not been an exception in availing its advantages. It can be used by tourist professionals to define the boundaries of the proposed tourist site as well its surrounding areas and the communities living in it. It can also get information on roads linking to the sites and availability of other utilities like water, power, market etc. Such technologies are also useful for site management and monitoring. The role of ICT tools in the industry for marketing, operation, and management of customer is widely known. Marketing techniques can be more innovative through ICT tools. The potential use of ICT tools in the industry are: Site development: GIS used for identification of Tourist site and destinations Marketing: Advertisement, promotion Operations: Buying and management of supplies and services Customer services: Management of customer relationships through booking travel, lodge etc Monitoring: GIS and GPS is also used for managing and monitoring tourist sites. Key factors for applying ICT in tourism 1. IT education and training for policy makers, managers and other players in the industry 2. Integration of various sectors like transport, lodge etc. 3. Technical Infrastructure 4. Human Infrastructure, which includes skilled people, vision and management. 5. Legal Infrastructure a. Regulation of telecommunication providers b. Subsides for Internet service providers c. Legal framework for online advertisement or official endorsement for online marketing. 6. ICT culture a. Create and sustain ICT environment b. Maintenance and update of websites c. ICT training for all level of workers d. Establish electronic linkages between all related sectors

3 Recent Studies on ICT and tourism has revealed the transition in the industry as a result of ICT impact and have explored its possibility and potential. Poon (1993) analyses some of the major challenges facing tourism industry and outlines the nexus between tourism and ICT. He traces the rapid shift-taking place between traditional tourism sector and new tourism industry. Technology has a strategic role in reshaping the value chain in the industry and in the process, consumers are gradually adapting to the new values, lifestyles and new tourism products, which has re-engineered by the new technologies. Although some of the technologies described are now obsolete, the implicit message is relevant and gives an overall review of the changing face of the tourism industry. Inkpen (1998) and Sheldon (1997) have examined the main characteristics of the industry structure and the operation of the new technologies in it. ICT applications in different sectors like airlines, hotels, tour operators, road and rail transport etc is dealt in detail with informative case studies. Some of the world s largest GDS (Global Distribution System) namely Sabre, Galileo, Amadeus and Worldspsan are examined. Besides analyzing the telecommunication technologies in the industry, the hospitality sector, entertainment sector, transport sector, management sector and other intermediaries have been diligently explored. Werthner (1999) provides a more detailed and logical understating of the industry s structure by focusing on the concepts, definitions, consumer behavior, economic aspect, market transactions, etc. Information Technology (hardware & software developments), information management, intelligent applications and system integration etc are examined carefully. Additional information on business strategy exploring the relationship between ICT, strategy and organization is also articulated. Buhalis (2003) also stressed on strategic management in his book providing a comprehensive overview of both operational and strategic management. Buhalis and Laws (2001) deals with the theory, practice and issues related to tourism distribution. The distribution strategies and approaches from a destination point of view is explored and discusses the possible future research in tourism distribution channels. It needs to be noted that the distributional structures are mainly from Europe, UK and other western nations and hence may or may not be useful for developing country s strategies. Connor s (1999) work serves as a textbook on electronic distribution with its logical explanation and case studies. GDS, CRS and DMS are analyzed with example of cases from across the western world. The growing phenomenon of travel distribution through Internet and its impact on distribution channels structure and functionality is explored with rigor. Carter & Bedard (2001)and Carter & Richer (1999) have focused on the operators in the tourism industry. Developments of the e commerce and DMO (Development Management Organizations ) and their changing value chains are analyzed intelligently and clearly so that importance of internet presence for consumers, intermediaries, travel media and other players in the industry is noted and understood through their works. Marcussen (1999) attempts to provide an overview of innovative developments in distribution of travel and tourism services in Europe. It documents the wealth of statistical data on travel and related transactions in the European tourism industry. However, most of the experiences are based on the western developed world, which could be possibly a limitation while trying to understand the nexus of ICT and Tourism in an Albanian context. In fact one of the most important factors that drives ICT development and use in all sectors, but especially tourism sector is the human component. ICTs and relation with human resources Investments in people are essential to economic and social development. Investments in technology will impact less on reducing poverty or improving the lives of underserved communities, unless accompanied by efforts to build capacity of target populations to exploit the opportunities offered by ICT. Education and skill development are critical components of assisting individuals, communities and even across the country, to be oriented to the global information economy (Agolli 2007). Therefore they must be essential elements in any development plan. Some of the main policy principles in this regard include: Education and digital literacy

4 Expanding educational opportunities and digital literacy in underserved communities is critical to broadening economic opportunities and removing barriers to digital inclusion (Sciadas 2005). Although certain forms of ICTs (e.g., telephones) can be and are being used effectively without widespread digital literacy, it is equally clear that digital literacy is vital to enabling users unlock the full potential of ICTs (James 2005). ICT skills development ICT skills are vital to enabling individuals and organizations to leverage the full potential of information and communication technologies. Yet in many parts of the developing world, relatively few users have the skills to utilize ICT effectively. Fewer still have the expertise to develop ICT products or provide critical IT services. A shortage of skilled ICT workers will make organizations reluctant to invest in ICT( James 2005), thereby curtailing demand for domestic ICT products and services and leaving fewer opportunities for entrepreneurs and domestic ICT firms. A chronic shortage of skilled ICT workers will impair a country s competitiveness not only in the ICT sector one of the fastest growing areas of the global economy but in many other more traditional sectors as well. METHODOLOGY OF THE STUDY Since tourism sector is a relatively spread one in relations with kind of services, as well as digital technologies used throughout the industry, it is difficult to generalize in one study all the different uses of ICTs. As a result of the literature review, our focus following the study, will be only ICTs and the need for human resources only in the accommodation sector inside tourism industry. This study is based upon a qualitative analyses through questionnaires. A simple random sample of 100 hospitality businesses is taken from a list of hospitality enterprises in Southern Albania. They are distributed and administered through face to face interviews, in a period of two months, from October to November The managers or owners were asked to complete a questionnaire in order to have an assessment of the situation of human resources, especially that necessity for ICTs application in accommodation sector as well as the necessity of training and qualifications on ICT usage. The results are shown in the coming section. ICTS IN HOSPITALITY SECTOR IN ALBANIA AND THE ROLE OF HUMAN RESOURCES The predominance of small firms is one of the defining characteristics of the tourism industry in Albania. Although small they play an important role especially in generating employment, enhancing the regional, bringing in foreign exchange and the economic growth of the community. The hotel size is relatively small, with an average of 26 rooms per hotel, so they are classified as small enterprises. Their location near the city and near the sea too, is reflected in the fact that the vast majority of these structures (almost 85%) operate all over the year (fig. 1). Although sea-sun-sand tourism is intense in Albania and there is a concentration in summer months, tourism is not very seasonal dependent. It is spreading (not with the same intensity) through 12 months, relying on same tourism types, such as: urban tourism, mountain tourism (Llogara area), cultural tourism, gastronomic tourism, special interest tourism, etc. So, this reflects the major role of human capital and its importance in tourism development in Albania, since the tourism product is increasingly dependent on the quality of human resources. 15% a- perennial activity Informa(on resource for clients se a 85% b- seasonal activity Promos(on resource Reserva(ons Fig. 1 Duration of the activity Fig. 2 Web-site use in hospitality enterprises

5 a- communication b- work organization c- speed d- accuracy 10 e- computer skills better service at table communication techniques with clients rooms management ICT usage Fig 3. Main aspects of training made Fig 4. Listing of required skills One of the most important tasks of a hospitality business is to develop the service side of the business, focusing on serving and satisfying the customer. It has to start with top management and flow down. With reference to figure 2, we have choose to analyze for the purpose of this study one of the, most used digital technologies in today tourism sector. The Web presence is in fact claimed from almost 79% of the companies. But the web is used more as an information resource or promotion, than for reservations on-line or as part of a monitoring GIS system. If we refer to the figure 3, which reflects the main areas of training for staff, it is evident that human resources management has a focus on skill development (better service at tables, communication technique with clients, rooms and common spaces management) more than ICT usage (only 39% of hotels take into consideration this aspect). This relates mostly to the later application of information technologies in tourism industry in Albania, geographical proximity to the origin markets, performing of this function primarily by employees of reception, the small size of these enterprises and providing of the loyal clientele. Another variable that we have analyzed in our study makes classification in order of importance of five key skills assessed to employees. As it can be clearly seen, computers skills are not considered yet as a basic skill that affects the performance of the employees work. This also because the tourism sector is service based and the operational areas which have necessity the application of ICT are not yet developed also because of the less than in production industries. yes, one Yes some No Yes No Fig. 5 Organizations with IT personnel Fig. 6 Digital literacy among employees From figures 5 and 6 we also can see that most part of organizations do not have a real work force specialized in IT. Only 28% have only one IT person, only 18% have more than one, but from the data only two employees as an IT personnel, While 53% do not have any. Even though, hospitality enterprises require digital skills in their work force. So they claim that almost 80% of enterprises require employees that have good basic computer skills and knowledge about computer applications.

6 CONCLUSIONS The role of ICT in tourism industry cannot be underestimated and it is crucial driving force in the current information driven society. It has provided new tools and enabled new distribution channels, thus creating a new business environment. The tourism product is based mainly on the private sector, which has an important role to play as it should improve the Albanian tourism industry competitiveness by improving its managerial and labor force competencies, enhancing the quality of services, designing appropriate marketing mixes to attract and satisfy target markets and cooperating closely in order to achieve synergies. Hospitality is one of the most developed subsectors of Tourism industry in Albania. As a relatively new private sector compared with the world tourism hospitality services, it has lately began to use also ICTs for improving their operations. Different technologies such as computers, telephones, reservations systems, Internet and World Wide Web, are used, but in different levels in these organizations. So, PDAs, networks or reservation systems are less known and used, while computers and basic applications are used in almost all hospitality enterprises. ICT skills are vital to enabling individuals and organizations to leverage the full potential of information and communication technologies. Yet in many parts of the developing world, relatively few users have the skills to utilize ICT effectively. This is also the case of Albania, which is in the first efforts to effectively use ICTs, passing so in another, more developed phase regarding these technologies. Not only the adoption, but the effective use will give the expected results. The important component for this effective use of ICTs is not only the digital literacy of employees, but also the involvement of human resources specialized directly in ICTs, or even more the existence of IT department within organizations. As a result of this study, we showed that computer based skills are required by hospitality organizations in Southern Albania, but owners or managers do not focus on the further development of these skills. In fact they give more importance to other workforce skills, like communication and organizations rather than IT skills and abilities. But this is also as a result of the developments in the tourism sector in Albania, the relatively near markets and loyal clientele that do not require the use of other technologies. REFERENCES 1. Agolli, E. (2007b): Science, Technology and Innovation Indicators: Trends and Challenges in South Eastern Europe. 2. Buhalis, D & Laws, E. (eds) (2001). Tourism Distribution Channels-Practices, Issues and Transformations, Continuum Publishing, London. 3. Buhalis, D. (2003). e tourism Information Technology for strategic tourism management, Prentice Hall, Harlow, UK. 4. Bushati, S (2007): Review of the S&T country Report in Autumn 2007 for see-science.eu. 5. Carter R & Bedard, F. (2001). E-Business for Tourism-Practical Guidelines for Tourism Destinations and Business, WTO Business Council, Madrid. 6. Carter R & Richer P. (1999). Marketing Tourism Destination Online, WTO Business Council, Madrid. 7. George Sciadas (2005): From the Digital Divide to Digital Opportunities. Measuring, Infostates for Development, Orbicom and ITU. 8. Gupta, S & Bansal, S.P. (2001). Tourism Towards 21st Century, Deep and Deep. New Delhi. 9. Inkpen, G. (1998). Information Technology for Travel and Tourism, Addison Wesley Logman, Essex UK. 10. James J Technological blending in the age of the Internet: A developing country perspective. Telecommunications Policy. Vol 29, Nr. 4, Maj 2005,

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