Tourism Industry in the United Arab Emirates

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Introduction: Company Overview

Tourism Industry in the United Arab Emirates

The United Arab Emirates (UAE), is a destination that mixes modern culture with history, entertainment and shopping. It is a relatively small country but the progress it had achieved throughout the past years in significant. From barren desert land, the country has achieved tremendous development and progress that has resulted in the country being one of the most visited destinations in the world. As shown by records in Go-Gulf, Dubai reached up to 14.

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26 million visitors, and it is estimated that the number of visitors will reach 20 million in 2020 (2015). The thing that distinguishes the UAE, particularly Dubai, from other Middle Eastern locations is its ability to adapt to the wants and needs of their visitors. It is a place for innovators, engineers, designers to create what people has never seen before. For example, Dubai Design week is the region's largest festival that showcases Dubai as the design capital of the Middle East.

(Dubai Design Week, 2018).Furthermore, Dubai has secured the opportunity to host EXPO 2020, which is a universal exposition and a festival of human creativity, skills and ingenuity( the Dubai, 2018). Dubai's most famous achievement to date is building the tallest building in the world: the Burj Khalifa. The Burj Khalifa is a global icon that has drawn visitors from all over the planet. According to Rebecca Bundhun (2011) "One year after its opening, the Burj Khalifa · helped surrounding hotels and business by up to 35 percent ·, on New Year's Eve, thousands of revelers gathered · an average of 4,000 visitors a day".

Burj Khalifa

The Burj Khalifa is a skyscraper located in Dubai, UAE. It is an unbelievable accomplishment by Emaar Properties, particularly because it currently holds the record for tallest building in the world. Today, the company that spearheaded this project, Emaar, has a significant presence in several key global markets. For example, Downtown Dubai is owned by Emaar Properties, and is considered the world's most visited lifestyle destination(Flashy Dubai, 2005). The 500-acre neighborhood is home to the iconic Burj Khalifa, The Dubai Mall and The Dubai Fountain. Emaar has proved its presence globally by spearheading projects in Lebanon, India, Italy, Jordan, Turkey, Saudi Arabia, Morocco and the United States.

Burj Khalifa started as an idea from Sheikh Mohammed Rashid Al Maktoum in order to attract more visitors into the country and, demonstrate Dubai's potential on the world stage. Burj Khalifa took almost 6 years to be completed. It was designed Adrian Smith, whom is an American architect of Skidmore, Owings & Merrill. The Burj Khalifa designates 96 levels as residential areas. Of those, 7 are under the Armani brand, including 2 floors for the Armani hotel. The remainder are 89 floors of apartments under the Burj Khalifa name. In addition to this, level 112 has a restaurant, and from the 112th to 154th floors, Emaar Properties leases office spaces. This leaves levels 124, 125 and 148 designated to At The Top, being the areas most visited by tourists.

At the Top (ATT)

As the highest point in Dubai, ATT provides a breathtaking experience of viewing the entire city from high up. ATT is located on the 124th and 125th floors, and the premium At The Top Sky is on the 148th level, which stands 555m above sea level. Transporting you to these floors is a high speed elevator from the ground floor. The product provides a 360 degree view of the world right before your eyes. An open-air terrace with coin-operated binoculars is also provided. Additionally, the customer can participate in other interactive experiences and purchase refreshments and souvenirs from the gift shop on the 124th floor in order to ensure a satisfying and thrilling experience at all times. ATT is the tallest observation deck in the region, and attracts millions of tourists, heralded as a must-see upon a visit to the UAE.

Mission Statement

Emaar's mission statement reads, "We are committed to create and deliver valuable and quality lifestyle through innovation, entrenched knowledge and expertise, and a value-centric approach, which aims to guarantee our client full satisfaction" (Emaar, 2018). On the same page, their vision states that Emaar highly values the culture they want to build through values such as customer focus, social responsibility, innovation and creativity, fairness and trust, development in employee, asset management and maintenance, positive work circumstances, and execution and delivery.

It is clear that Emaar has a strong mission statement. It states what Emaar is offering in terms of product and services; innovative and quality lifestyle which helps with customers' understanding of the products and whether the offerings match the customers wants and needs. Their approach is "value-centric", and looks to add value to the organization by guaranteeing customer satisfaction. The company's focus exists in terms of product and services as well as key values that aim for customer satisfaction.

Sources of Competitive Advantage

ATT's competitive advantage is strongest when considering its product, place, and promotion. "When Emaar focuses on Dubai, and it works on this kind of project at the higher end of the market, it has competitive advantage" (the National, 2013). ATT has competitive advantage in terms of product because the Burj Khalifa holds the world record for height, which makes it a unique product that grasps the attention of potential consumers. Emaar also has an advantage in regards to place because the product is located in downtown Dubai. This location is one of the most well known areas for tourists and residents. Secondly, it is attached to the world's largest mall, known as Dubai Mall. Furthermore, ATT has competitive advantage regarding promotion. Many advertising campaigns regarding tourists attractions contain the image of the Burj Khalifa in their ads which increases exposure of the product's location. It also has a strong, positive reputation outside of the UAE, which promotes ATT internationally, attracting tourists to the country. Moreover, the Burj Khalifa and ATT has strong online presence on many social media platforms when compared to other properties in the region, such as Burj Al Arab.

Macro Environment

Socio-Cultural

The Emirati culture as perceived by Westerners is that it is a "highly materialistic and consumerist society" (Richardson, 2008), where lavish spending is rampant and living an expensive lifestyle is normal between the people of the country. This image entices high income individuals to visit products like ATT due to its association with a "lavish lifestyle".

Economic

A large portion of Dubai's adult population enjoys high amounts of disposable income, "the top-income forms 32% of the country's adult population in 2017 which will expand up to 45% by 2022" (Abbas, 2017). This is good news for the tourism industry, which depends largely on people's disposable income to drive profits. In addition to this, the Dubai Corporation for Tourism and Commerce Marketing is diversifying its current tourism industry to expand to new markets across the world, "Mr Kazim told The National he aims to maintain the flow of visitors from traditional source markets in 2018 while ramping up efforts to lure tourists from Russia, the CIS, Latin America and the Nordics, especially Sweden, which registered strong growth in 2017" (Townsend, 2018). The U.A.E has achieved a positive GDP shift from the oil industry towards other sectors of the economy. "Economic growth in UAE is expected to continue in 2017, supported by the prospect of a rebound in oil prices again and the trend towards a strong boost in economic diversification policies through the adoption of future national visions, plans and strategies to increase the levels of diversification according to quantitative targets and operational programs to achieve tangible achievement in terms of diversification" (Department of Economic Studies and Policies, 2017). However, many sectors of the economy are still negatively impacted when oil prices decline, not only the oil industry. The region's economic stability still depends largely on the oil cycle, despite the efforts to diversify its annual GDP. High oil prices equate to affluent periods, whereas low prices have the opposite effect.

Political

With that said, the government's attempts to shift economic dependence from oil to other sectors, such as tourism, push the government to allow lighter policy restrictions for visitors and expatriates. Expatriates are U.A.E residents with temporary visas, conditioned to stay in the country as long as they are employed. The U.A.E is making policy changes to lighten visa restrictions on expatriates and allow them to own their own businesses in Dubai and Abu Dhabi. This will allow the country to maintain its competitive advantage in the Middle East as an attractive location for foreign investment. Cities like Doha in Qatar and Manama in Bahrain have lightened their expatriates legal requirements to compete in this space as well. "More than the money, the Gulf states are competing for human capital, global businesses and industry leaders," (Idayu Ismali, 2018). Also, the tourism industry in Dubai is also hindered by their legal system. According to Norland, "a legal system based on a hard-line interpretation of Shariah law often lands foreigners in jail for offenses that few Westerners would dream were even crimes" (2017). The country is hesitant to change their policy to accommodate their rapidly increasing tourism industry.