Dubai: As the peak summer travel phase approaches, Holiday Factory has launched operations in the region by offering holiday packages almost half of that of the industry.
Owned by a German holding company Brainnox, Holiday Factory is positioning itself as the "real" and the only independent tour operator in the UAE market targeted primarily at the mid-income group and offering affordable package deals on holidays to 23 destinations in Asia, Europe, Indian Ocean and the Middle East.
The leading players in the market, such as Emirates Holidays and Etihad Holidays, meanwhile target the upper segment of the market. Asked how big a price difference Holiday Factory would offer compared to these operators, Hakan Bakar, CEO, said: "We are a minimum of 35 to 50 per cent cheaper compared to the existing prices in this market, including the prices being offered by the travel agents.
"I don't think we will be a competition to Emirates and Etihad because they have very high-level products. They make tailor-made luxury holidays.
Deal with Etihad soon
"We also have good five-star hotels in our offerings, but largely we have product offerings for people falling into the mid-income group."
The company has tied up with over 200 hotels in the three-, four- and five-star categories and more than 20 airlines that include flydubai, Air Arabia and Qatar Airways.
"We are very close to finalising the deal with Etihad Airways," said Irfan Cokovie, board member of Holiday Factory. "And with Emirates, we haven't yet signed any contract as we are trying to find a model that would best suit both parties."
Further, with a couple of travel agents in its network already, the company plans to have at least 400 to 500 travel agents in its fold in the next two to three months, according to Cokovie. The company's packages include return flights, hotels, return airport transfers and the services of a tour representative.
"The system of affordable package holidays called mass tourism revolutionised the travel industry and has been available to the European and other markets for over 40 years," said Bakar. "The UAE will experience it for the first time."
The company has also unveiled its summer 2011 brochure offering a range of package holidays at affordable prices.
On the revenue model, Cokovie said: "The company makes money on volume. We are earning a few dirhams per passenger. So while what we will earn per passenger is very little, it is the huge number of passengers that is important."
He added that with an initial investment of a few million dollars in the operations, Holiday Factory is "financially very strong". "We are a cash positive company," he said.
With an ambitious target of handling one million passengers per year in the first three to five years of operations, Holiday Factory plans to expand its business beyond the UAE to at least ten more countries in the region, said Cokovie.
"While the UAE will remain the company's headquarters, we will announce four more countries to launch operations in by September this year," Cokovie said.
"It will be an on-going process. "We wanted to create a brand which is only for this region. We will never target this brand at the European market, for instance."
Differentiating Holiday Factory's model from that of a travel agency, Cokovie said: "Travel agencies in the UAE are at the moment acting like tour operators in the absence of proper tour operators, without offering a comprehensive service.
"What they [travel agents] are doing is going into their flight reservation systems and taking the cheapest flight out of it, then coupling it with the cheapest hotel they can find and then put it all together and call it tailor-made.
"This is expensive. If you book a trip this way and then compare it to what we offer, you will find us almost 50 per cent cheaper."