Dubai Is A Very Young Tourist Destination Tourism Essay

Introduction:

Dubai is a very young tourist destination which gained popularity recently. Dubai has proved as a very successful destination and managed its economy after its recent crisis in year 2009. Having exclusive resorts and hotels throughout the city with deserts makes it a memorable destination with cherishing experience it has desserts which make it similar to Las Vegas in America, Dubai was an impossible dream which is now an oasis for fun in a very promising environment.

The backbone for the development of Dubai was the investment made by the foreign investors which helped the infrastructure to boom and flourish. These developments were very well supported and promoted by transparent government policies. But it is important to note that though Dubai was one of the first cities to develop tourism it’s very challenging to sustain it since there are neighbouring destinations as well which are striving hard to gain the popularity among the region. However Dubai’s development as a destination year after year has been remarkable and impressive.

Dubai has been a dessert gem of the Middle East region. Where the tourists can enjoy sunny beaches with the luxury of one of the finest hotels in the world combined with the warmth of Arabian hospitality.

Product offer:

Dubai is a destination with seven – star luxury hotels overlooking the beaches and with superb infrastructure throughout the city. Dubai caters to young tourists and to people who are willing to invest in any kind of business. It serves with excellent tourist amenities and products which are worth investing in. It is one of the seven emirates of UAE where the tourism industry has done exceptionally well in the recent past years. Dubai is one of the most preferred destinations in the terms of its geographic location. Most of the Middle East and subcontinents of India are just few hours away from Dubai and with ease of accessibility. Also it attracts tourists from European countries making it just 5 hours of flight to Dubai.

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Dubai is known as one of the best places for a short break with wide range of products offering such as hotels and resorts, dining, shopping, partying, sports events and much more. Dubai is also known for its artificial islands namely, Palm Jumeirah, Palm Deira, Palm Jabel Ali and The world. These artificial and unbelieving infrastructures have taken a drastic curve towards the development of tourism industry.

Pricing Strategy:

Dubai has made its image at an international level and kept the pace with the increasing market demand and needs effectively. Tourism industry is one of the major contributors of the total economy of Dubai. Dubai was at its best in its early 2002 which lasted for 5 to 6 years and faced a global economy crisis in year 2009. However, Dubai is recovering and doing good from last 2 years or so with tremendous growth in retailer business, oil refineries and of course the tourism industry.

As said earlier, Dubai saw its boom time during year 2002 and hence it had psychological pricing strategy. However after the economical downfall in year 2009, Dubai is now going through market penetration pricing strategy so as to attract international investors and tourists back to Dubai.(Hsu, Killion, Brown, Gross, & Huang, 2008) Also, keeping in mind the visa formalities of Dubai, that is visa on arrival, can be termed as differentiated strategy. In this context, Dubai tries to accommodate more and more numbers of immigrants and which in a way helps the Government of Dubai to generate more revenue through visitors.

Service concept:

Dubai has emerged as one of the finest places to visit with ample of attractions from heritage sites, exclusive resorts and hotels overlooking the beach to famous landmarks like Burj Al Arab, newly constructed Burj khalifa, the palm, the world, etc. However, Dubai is trying to develop its infrastructure as much as possible and it is coming up with certain developments which will definitely be a benefit for the tourism industry. Future developments which would enhance the service concept of Dubai for tourism industry are as follows:

Dubailand

Dubai sports city

The world

Al Maktoum International airport

Global village

Current key marketing communication strategies:

In this world of globalization, countries all around the globe are competing with each other in all aspects. This is where marketing comes into the picture. Today, the importance of marketing has reached to an extreme height where any business or a destination must have a unique marketing strategy to attract tourists or investors and gain their attention. Dubai has also done its part of it so as to make the world aware of what Dubai is all about and what is it offering to the world.

Dubai has currently positioned itself in a rejuvenation stage because of the recent economic downfall in year 2009 and hence it is trying its best to penetrate in the market again and it has been doing exceptionally well since past 2 years.

Dubai has introduced various promotions and events which has critical role to attract investors from worldwide and sell Dubai as a destination through such events. There are few festivals and events which help Dubai for its strategic marketing which are as follows:

Dubai shopping festival

Dubai summer surprises

Eid in Dubai

Also, Dubai introduces sports activity, entertainment, conferences and exhibitions throughout the year. This breathtaking festivals and events attract people from around 200 countries throughout the world. People visiting Dubai for such events obviously experience something unique and this in a way is personal selling for the destination through its tourists. On the other hand, in this world of modern technology, Dubai, like other countries have introduced an official website named Definitely Dubai which makes it easier for an individual to explore Dubai at one stop and go. Hence, Dubai has various means through which they market their destination and they are as follows:

Advertisement

Personal selling

Public relations

Main target market:

Dubai offers ample of attractions and a place which attracts all sorts of target market from different aspects of market segmentation. Following are the main target market for Dubai:

Business travellers: Dubai is a hub for investors and lately more and more number of international investors have turned up to Dubai and invested in some or the other kind of business.

Airlines and ship crew: Dubai enjoys its geographic location and remains one of the major points of halt for all the flights flying from one part to the other part of the world. Hence, accommodating maximum number of airlines and ship crews.

Expatriates: As said earlier, Dubai has more than 80% of expatriates which means only less than 20% of UAE nationals resides in Dubai.

Honeymooners: Having had unique destinations with luxurious resorts and hotels, honeymooners are the best target market for the hotels. Hotels like Burj Al Arab and Atlantis are one of the best hotels to stay in for the honeymooners.

Leisure travellers: Leisure travellers have lots more to explore Dubai in terms of shopping, activities, sports, entertainment, natural reserves, beaches and parks. High end travellers may enjoy their stay in any 5 star luxury hotels and make their stay a memorable experience.

Main challenges faced:

Main challenge for Dubai was to cope up with the global economic crises which had a huge impact on the infrastructure development as well as the tourism industry. Most of the developments or projects were cancelled or put on hold. Also the political instability in the Middle East region raised an alarm for all the tourists visiting this region ultimately slowing down the flow of visitors to Dubai.

However, after the economic crises in year 2009, Dubai has made tremendous come back and it is now coping up with the pace of the market with tourism industry booming at a very high rate.

Environmental analysis:

Environmental analysis is nothing but an evaluation of the possible impacts of external environment or forces on the existing strategies or growth of the business or organization. Dubai as a destination would definitely like to provide each and every visitor a memorable and cheerful experience. Hence, government of UAE is responsible for the betterment and safety of its cities and UAE itself as a country. Dubai is situated on the emirate’s northern coastline. Dubai shares its border with Abu Dhabi in the south, Sharjah in the northeast and Oman in the south east (www.definitelydubai.com). Having such competitive environment, environmental analysis will help Dubai identify its current position in the market and possible strengths and weaknesses. (Hsu, Killion, Brown, Gross, & Huang, 2008)

Environmental analysis will basically include macro environmental scanning. Macro environment consists of political, economical, socio-cultural, technological, ecological and legal factors for Dubai as a destination.

Marketing Information system:

Marketing information system (MIS) is all about gathering and storing of data and evaluating them so as to meet the goals and objectives of any organization and for its development. Information could be in various forms, for example, number of tourist, number of hotels, technology development, businesses, revenue earned, etc can be collected. This information is collected by the Department of tourism and commerce marketing, Government of Dubai

Dubai is one of the growing cities in the UAE. As a destination, it attracts visitors through various means like real estate, travel packages, online auctions, exports, nightclubs, multi-level marketing, job agencies for skilled labours, franchise business, etc. These factors somehow attract people from worldwide as a tourist or a visitor. This, in a form adds up to the revenue earned by the government in terms of tourism and development.

Marketing information system gathers and stores data in the form of statistics and it is up to date with the department of tourism and commerce marketing, Dubai. This will certainly help Dubai to form its strategy for its continuous and rapid growth in the market. There are certain benefits of having marketing information system which are as follows:

It helps to identify and recognize current market trends

Helps in marketing planning and controlling

Helps with lots of information which is systematically and properly designed

Helps in making right decision at the right time with the facts and information readily available

It also helps in environmental scanning.

Hence, it is always worth having MIS in any kind of business or a destination to evaluate its current position in the market and cope up with new market trends.

Environmental scanning:

Environmental scanning helps in understanding the context for the preferred future. Environmental scanning refers to macro environment which considers political, economical, socio – cultural, ecological, technological and legal factors. It also comprises of industries, companies, clients and competitors. These factors influence the business, industry or a market as a whole. Environmental scanning is a process of identifying the happenings in and around the business or a destination. Dubai is a unique destination with infinite opportunities. Hence, environmental scanning will help the destination to survive in the market by identifying the opportunities and threat to its market.

In this world of globalisation, there is a need to do proper analysis of the surroundings so as to maintain the pace with the world and form a strategy accordingly. The procedure for environmental scanning will be done at international level. Dubai has been growing rapidly since past few years and hence the government of Dubai or the tourism department needs to be up to date with the happenings in and around Dubai.

PESTLE analysis:

Pestle analysis will broadly focus on the political, economical, socio-cultural, technological, ecological and legal aspects of it. This will help Dubai as a destination to plan its strategies for the future development and attract more number of tourists. PESTLE will also help the government of Dubai to know its competitors and the potential threats to its market. (Hsu, Killion, Brown, Gross, & Huang, 2008).

Political:

Dubai is one of the 7 emirates of UAE and unlike other neighbouring countries it has a stable political history. In the recent years, it has sufficiently developed dynamic legal and regulatory framework. Dubai government and the department of tourism and commerce marketing have contributed a lot in the development of Dubai as tourism destination. However, there are certain impacts of political and legal factors on the destination.

One of the major factors that attract tourists from around the world to Dubai is the entry formalities. The UAE authorities have made it very straightforward for the visitors of the Dubai by introducing a visa on arrival system. Here the tourists do not require prior visa to enter UAE airport, however this facility is only applicable to 39 countries – GCC nationals. Hence, this formality is a big plus point for Dubai to attract tourists from all around the world.

Government of Dubai has given good preference to the people who are interested in doing a business. It has also received recognition for its efforts in creating business opportunities.

It has been a good outcome overall and the government of Dubai is still looking forward to bring in new expensive facilities.

Foreigners have the right to have the ownership of up to 49% for the businesses that are established in UAE and up to 100% for the professional businesses (DTCM, 2011a).

The government is also looking forward to improve its foreign relations which will certainly add up to the tourism industry in some or the other way.

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Macro environment (PESTLE)

Economical:

Over the past recent years, Dubai has made a drastic change in its economy by becoming a major hub for the business and investors. Having had a strategic location it serves as a biggest re-exporting centre in the middle-east. Activities such as trade, tourism, transport, businesses, etc has made a huge contribution to the economy of Dubai. However, the major sector which contributes to the economy is crude oil (Govers & Go, 2005, p. 77).

Dubai’s gross economy was US $92.11 billion in year 2011.

Where in the tourism industry of Dubai made 11% of the total economy.

It has been seen that the total revenue generated by the tourism industry was up by 20% in the year 2011 as compared to 2010.

Tourism industry made 15,965,011 in year 2011 while in 2010 it was 13,272,330.

Dubai’s trade surplus has also been increased over the years, growing from $18 billion in 2007 to $31 in 2011. This indicates the strength of the export sector of economy.

The hospitality industry is expecting a real boom in its mere future that is by year 2015. Targeting around 100,000 rooms for over 15 million visitors.

On the other hand, Dubai’s foreign debt was estimated at approximately US $100.

Having looked at all the facts and figures over the past recent years, there seems to be no economical problem in Dubai. In fact, the tourism industry will be one of the major contributors to the Dubai’s annual economy. Hence, there should be no worries for Dubai as a destination for the international tourists.

Social:

Social factors comprises of customs, social class, religion, culture and demographic variables such as age, gender, income and education level. (Hsu, Killion, Brown, Gross, & Huang, 2008)

According to ( DTCM, 2011a)

Dubai has a population of 2,065,636 which consists more than 80% of expatriate’s population.

Male : Female ratio is 2.2 : 1

It has very low or no crime rate record

Eating of pork is a taboo in UAE

National language of UAE is Arabic

Dubai follows Islamic religion, however practice of all religions is allowed in Dubai.

Dubai is doing well in terms of education; it has only 7% of illiteracy.

Dubai is one of the fastest growing cities in the world and the average employment age is from 19 – 65 and which is expected to grow by 120% by 2016. Hence, this will definitely decrease the illiteracy rate of Dubai. Also, due to friendly nature of Dubai it has made a remarkable growth in the trading business and will continue to attract more and more investors in future.

Technological:

Technological factor is now one of the important aspects for any destination in the world of globalisation. Dubai has invested hugely in technology and infrastructures in last 20 years or so. It has got ample amount of attractions where the tourists can look forward to and make their visit to Dubai a memorable experience.

Dubai has one major international airport, 2 seaports, specialised free zones, several industrial areas, etc.

Dubai has 387 number of operating hotels (Figure 1.1) and 53,828 number of available rooms by the end of year 2011, (DTCM, 2011a).

Dubai has world’s 4th tallest hotel named Burj Al Arab, standing 321 meters tall with around 70 floors.

Recently established world’s tallest building named Burj Khalifa is 828 meters long in height and more than 160 stories. It holds the following records at international level:

Tallest building in the world

Highest numbers of stories in the world

Tallest service elevators in the world

Elevators with the longest travelling distance

Tallest free standing building in the world

Figure 1.1

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Dubai has recently introduced to technologies which are useful for the people travelling throughout the city. Installation of automatic fare system, route display, destination display system, electronic taximeters and complete management systems has made easy for the tourists to travel without any hesitation or trouble. Dubai government also introduced One Stop Information Centre (OSIC) where an individual can stop over and browse for all the information about Dubai in one go.

Moreover, Dubai has done significantly well in its technology and infrastructure department so as to attract more and more number of tourists as well as investors with long lasting experience.

Ecological:

Dubai enjoys with undoubtedly one of the best locations on the planet earth. Having had exceptionally well looking beaches throughout the coast, Dubai has many more things to look which is artificial. Dubai has more than 3 artificial islands, namely, Palm Jebel Ali, Palm Jumeirah, Palm Deira and The world (which appears as a world map) from north to the south. Dubai has been voted with the cleanest water with Abu Dhabi and Muscat. Also, certain UAE cities like Dubai, Abu Dhabi and Sharjah have been rated the best cities to live, (Emirates news, 2012).

Legal:

UAE’s seven emirates have their own government with proper municipality and authorities. There are laws where each and every individual must follow and it has been noticed that in a recent few years’ expatriates have failed to do it (Emirates News, 2012). There are few laws you should never break, for example:

Clothing for women’s should be conservative, no transparent clothing are allowed where as men’s should cover their chest.

There are few customs law where an individual cannot bring certain materials and are banned in UAE. For example, pornographic materials, drugs and anti – Islamic materials.

Consumption of alcohol is banned in public places but can be consumed in restaurants and bar and in hotels. Drink and driving is a big crime and anybody found guilty will be jailed.

Procedure for environmental scanning:

Relevant areas for scanning

Medium

Responsibility of

Reporting to

Time

Competitors

Tourists

Hotels, DTCM, Government of Dubai

Internet website of DTCM

Annually

Investors

Hotels, business or organizations

DTCM or Government of Dubai

Weekly

Hotels and resorts

Managers of the hotel, frontline staff

Stakeholders, General manager, Head of the department

Daily

Newspapers

Hotels, businesses, entrepreneurs

Journalists’, Newspaper office, media

Daily

Customers

Hotels and resorts

Staff of the hotels

Managers, Head of the department

Daily

Internet

Staff and managers of hotels and resorts

DTCM, government of Dubai

Weekly

Tourist

Staff and managers of hotel

DTCM, Government of Dubai

Daily

Economical

GDP per capita

Hotels, Businesses, entrepreneurs

Government of Dubai

Annually

Revenue

Hotels, entrepreneurs, investors

DTCM, Government of Dubai

Annually

Currency exchange rates

Banks, hotels

Government of Dubai

Daily

Legal

Minimum wage law

Government of Dubai

Human resources department

Monthly

Hospitality magazines/ Newspaper

Hotels and businesses, entrepreneurs

Media, Government of Dubai, Magazines and newspaper office

Monthly

Technological

Infrastructure/ Technology

Government of Dubai, Tourists, Locals

Daily

Situation analysis:

Dubai has been exploring significantly in all aspects so as to attract more and more number of visitors in recent few years. However it has some strengths, weaknesses, opportunities and threats. Strength and weaknesses are internal whereas opportunities and threats are external (Hsu, Killion, Brown, Gross, & Huang, 2008).

Strengths: Oil companies, booming economy, politically neutral, unique beauty and hotels all around Dubai, safe and clean environment.

Weaknesses: Negative image of the Middle East, lack of natural resources, only around 20% of UAE nationality population.

Opportunities: Job opportunities for immigrants, increase in oil prices, increase in foreign investors, and development of MICE.

Threats: Strong competitors are within the nation for example, Abu Dhabi, Sharjah and Qatar also international competitors such as Singapore and Hong Kong, limited media coverage.

Hence, depending on current situation analysis Dubai is going through a booming phase of economy even after an economic downfall in year 2009. Identified are certain strengths and weaknesses with some opportunities and minimal threats where in Dubai can grow drastically as a tourism destination in its mere future. The economy from hotel industry as said earlier and in figure 1.1 shows an impressive growth of 20% in year 2011 as compared to year 2010. Certain factors that will bring in more international investors and tourists are new developments in infrastructure and technology. Dubai has emerged as one of the rapid growing cities and that too in a quick time span and hence it can be concluded that Dubai is becoming more popular internationally and also a best place to live in with extra ordinary attractions.

Target market analysis:

One of the major essences of marketing is customer oriented. Target marketing is the process of identifying and focusing marketing activities to those customers whose wants and needs can be satisfied by you the best. By target market process you have the potential to convert these customers as your guests of future providing you with hard cash and investments. An effective target marketing analysis will help you to arrange your resources for the market which would provide high return on marketing investments. Hence target market analysis is a very important and crucial part in the development and sustainability of any destination. It is important to note that target market analysis is always an ongoing process, it has to be done in a periodically.

Dubai is already a developed destination in the Middle East region and has the competitive edge of being the first-mover over years. Dubai was very well successful to make it on the top of the world’s tourism destination map. The hotel market in Dubai has grown significantly over years which were backed up by infrastructure developments and huge amount of domestic and international investors.

However with the beginning of the economic crisis emerging globally it was very natural that it would hit the major market source. Due to the unwelcomed situation grasping the region for quite a while Dubai not only needs but also was forced to rearrange the procedures and strategies of the hotel industry in the city which was suffering from a downfall in the occupancy rates. Dubai’s Department of Tourism and Commerce Marketing (DTCM, 2011b) have been trying very hard to position Dubai as not only a top tourist destination but also their aim is to develop it as a commercial hub.

While conducting target marketing analysis it is important to conduct a competitive analysis with other destinations in the region. This comparison must include factors which attract customers than the competitors it might include climate, scenery, infrastructure etc.

Market Segmentation:

A market segment is a process of identifying potential customers by one or more characteristics. This is done to better understand the customer needs .Dubai as a destination has classified its customers on the basic of two categories as geographic and psychographic.

Geographic segmentation:

In geographic segmentation the market is divided into several geographical borders according to region, population, city size and climate. This is done to concentrate on particular consumer base since consumer behaviour varies across geographic territories. Hence it is important to consider geographic factors to target and attract the market specifically.

Top 5 source market for Dubai

The above pie chart describes the number of visitors on the basis of geographic area and the top source markets for Dubai. From the pie chart it is prominent that Dubai enjoys a high number of visitors from the South Asia region. It also has many visitors from AGCC region which is Arab Gulf country council .AGCC includes 6 countries which are Bahrain, Kuwait, Qatar, Oman, Saudi Arabia, and the United Arab Emirates. The least amount of visitors was from CIS which is common wealth of Independent States. South Asia is one of the most important segments for Dubai, since Asia has the largest piece of share Dubai has a very good opportunity to take over this target market and spread its roots even deeper.

The above data is about the visitors coming to Dubai however it is also important to keep a track of the spending power of the source market (DTCM, 2011a).

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According to the data above it is prominent that the tourist from the United Kingdom, United States and Saudi Arabia are by far the biggest spending geographic source markets in Dubai for their accommodation which accumulates to $124.9 millon, $82.1 million, and $70.5 million. This is equal to 63.2 percent of the entire category.

Among the high spending countries that spend $10 million or more annually, Japan, Italy and France experienced negative growth of 16.6 percent, 7.3 percent and 1.2 percent respectively.

However if we take an average spending on the accommodation sector the high spending countries are Russia ($683.54), Switzerland ($629.81) and Saudi Arabia ($551.40).

The entire figures are retrieved from (DTCM, 2011a).

Pshychographic segmentation:

Pshychographic segmentation is a process or tool to group the people according to their activities, interests, lifestyle and opinion. Dubai is a very vibrant city hence it is very important to classify visitors based on their activities to better understand their needs and to develop the infrastructure demand. Henceforth the visitors visiting Dubai has been classified into the following categories:-

Pshychographic Segments

Characteristics

Business Visitors

Stay upto 5 days

Have visited Dubai on a regular basis

Make their own bookings rather than tour operators

Look for safety, climate and value for money

Airline and Ship Crew

Stay upto one to three days

Have visited Dubai before and travel regularly

Have corporate arrangements for accommodation with the hotels.

Stay in 2 star to 4 star hotels and some serviced apartments.

Leisure Visitors

Stay for 4 to 10 days

Are visiting Dubai for the first time

Make their own arrangements

Prefer to stay at 5 star hotels while minor percent stay with friends and family

Cruise Passengers

Stay for two to three days

Mostly visiting Dubai for the first time

Accommodation is usually a part of the cruise package

Visit neighbouring destinations like Oman, Bahrain and Egypt.

Conference Visitors

Stay for eight to fourteen days

Are visiting Dubai on regular intervals

Make their own arrangements

Mostly stay at 5 or 4 star hotels

Use Taxi too much as mode of transportation

Working Expatriates

Stay for more than a year

Are usually visiting Dubai for the first time

Have arrangements for their accommodation but not in hotels

Contribute to the Culture and economy.

The above diagram shows the percentage of physcographic segments in Dubai from all the visitors arriving to Dubai. It is important to note that overall, passenger traffic at Dubai International Airport – the world’s fourth busiest airport – rose 15 percent in 2010 as the global economy recovered. It was up 8.9 percent in the first half of 2011 despite high fuel costs and increased economic uncertainty in Europe and the US.

Hotels in the UAE trade and tourism hub Dubai, known for the world’s tallest tower, reported a modest occupancy increase of 0.7 percent to 69.9 percent in May from the previous year.

Potential markets profiles:

From the facts and figures about the visitors coming to Dubai we can identify and describe the potential target markets for Dubai. After analysis of the data we have identified 3 major new markets for Dubai (DTCM, 2011a). The details of those nations are stated as follows

China:

In 2010 the visitors from china were found spending more in the country almost 155.3 percent more than they spent in 2009, according to visavue data.

The major growth category in some of the segments included quick service restaurant category which inclined to a 361. Percent jump contributing to 31,519 spent in 2010.one of the other segment which was a growth was departmental store spending which went up by 210.8 Percent to $25 million.

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