Assignment Research Paper

Course of study: International Tourism & Marketing

Topic: The Development of Tourism Destination Dubai

Submitted by: Working period: Deadline for Submission: Lecturer:

Judith Kloeg 3rd Semester 06/12/2013 Dr. Anita Zehrer

Development of Dubai
Balakrishnan (2008) conducted a exploratory case study of Dubai to explain some elements of successful destination branding: Dubai - a star in the east. He argues successful branding strategies enable a destination to stand out, attract its target customer and generate sufficient earnings, which in turn ensures economic growth (p. 62). This paper will focus on Dubais development as a tourism destination. First of all, Balakrishnan (2008) sheds light on Dubais current situation. Dubai is an emirate of the United Arabic Emirates, which lies in the heart of the Middle East. Balakrishnan (2008) states it is in a bed of ancient civilizations, a birthplace of three major religions and a transit point for onward journeys (p. 64). Dubai has a strategic geographical position, centered between Asia, Europe and Africa. Dubais destination focus lies on lifestyle, business conferencing, sports, entertainment and shopping. According to Balakrishnan (2008, p. 63) Dubai is one of the worlds fastest growing economies with a per capita income of US$31,000 (IMD, 2005). The tourism and travel industry of the Middle East (ME) is relatively as well as in absolute terms impressive: it ranks number nine in terms of absolute size with US$150 billion. Moreover, it is expected to grow to US$280 billion by 2020 (WTTC, 2007a; Husain, 2007a). The global tourism competitiveness report of the World Economic Forum reveals the UAE ranks number one in the ME and 18th in the world. According to Balakrishnan (2008, p. 72) a lot of the UAE activity is primarily due to Dubai. As of 2006, 6.5 million people visited the emirates excluding visitors staying with friends and family (Rahman, 2007b). In 2007 investments in tourism and infrastructure reached US$1 trillion, and it is expected to reach an astonishing US$ 3 trillion by 2020. In 2007 tourism contributed 18 percent to Dubais GDP directly and 29 percent indirectly. Balakrishnan (2008, p. 66) explains the transformation of Dubai from a sleepy fishing and pearl diving village to a world-known trading center can be dedicated to the visionary leadership of Sheikh Rashid Bin Saeed Al Maktoum (1958-1990) and Dubais geographical position. The Sheikh borrowed a start-up capital from Kuwait to dredge the creek, which later became the worlds largest man-made port. When the British left in 1971 the Trucial states were independent again and together created a Union by the name UAE. According to Balakrishnan (2008, p. 68) this enabled synergistic pooling of the resources. Although today oil forms less than 6 percent of the overall GDP, it ensures the rapid pace of development in the beginning. The successor of the Sheikhs, his son, HE Sheikh

Mohammad Bin Rashid Al Maktoum is responsible for encouraging and facilitating the development of Dubai.

Balakrishnan (2008) recognizes the unique advantages of Dubai which supported its development. First of all, its leadership has been strong and endowed with great vision (p. 68). Next to that, a proactive attitude towards global change and the utilization of its strategic location advantages. Historically, Dubai is a transit point, a hub, however, Dubai has encouraged trade, business, shopping, lifestyle and tourism (p. 68). The facilitation of the former activities was enabled by the fast pace of project completions. Nonetheless, Dubai also had disadvantages challenging its development. History of this region has always been distorted and September 9-11, 2001 made things worse with the ME region being clubbed as one area of political instability and terrorism (Balakrishnan 2008, p. 68). Arab leaders stated the international perception of the ME was holding development back. Besides, the majority of Dubais population (82%) being expatriates poses a challenge. Dubais economy can be classified as service dependent, and people play a very important role in the perception of service satisfaction (Balakrishnan 2008, p. 68). Demographics are skewed due to the majority of the cheap labor is male, living without their families. As a sign of development Balakrishnan (2008) depicts the change of the Sheikh Zayed Road, which was once running the length of Dubai (1990s) with little construction along it. Now it is on both sides densely populated with buildings. Furthermore, parking, the huge number of apartments and villas that will hit the market by 2010, and maintaining security when tourists will outnumber residents by 4: 1 are indicated as areas of concern (Balakrishnan 2008, p. 68). Lastly, the exhaustion of oil in the next 20 years comprises another future challenge. Balakrishnan (2008, p. 75) states a big caution area for Dubai is the rapid pace of development which may not give sufficient time to learn from mistakes. He reckons this is a key issue in formulating the destination strategy. He reasons Dubai has a strong vision but needs to integrate and balance the pace of progress of all components of its vision (p. 75). The ongoing exponential growth of Dubai as a destination challenges this task. Free trade zones and the numerous real estate projects have put demands on existing basic infrastructure and transportation, causing road upgrades at a frantic pace (Balakrishnan, 2008). At the same time, there is an increasing need to diversify Dubais assets. Areas for development are culture and historical exploration and education. Besides, Dubai pursues increasing resident consumption, therefore future development should focus on for instance setting up events such as Dubai Summer Surprise a ten week shopping, child-focused extravaganza, to overcome the low-retail months in summer. 3

Development of Singapore
The development of Dubai and Singapore as tourism destinations will be compared. Looking at its size, Singapore has seen a remarkable growth relative to its size as city state and limited supply of cultural and natural resources. A variety of factors including heavy investment in infrastructure and product development attributed to such growth achievement (Henderson, 2007b). Lohmann et al. (2009, p. 207) state Singapore has quickly developed from a traditional trading hub into one of the worlds leading financial centers, a focal point in the global shipping and trading networks, and a leading tourism on-route destination stop.

In 1965 Singapore gained independence, being a former British colony. Singapore is characterized by high levels of industrialization and urbanization, and has a population of over four million. The Peoples Action Party, acting as the government, facilitated from 1968 on economic progress and prosperity. According to Henderson (2007b, p. 266) the government has been especially supportive of tourism in recent decades. Although domestic growth is restricted in scope, international arrivals have been growing significantly. A key segment of Singapores tourism industry constitutes business travelers of different types. Moreover, medical tourism is a newly emphasized segment. Henderson (2007b) states the importance of the tourism and travel industry is widely recognized in Singapore. Henderson (2007b, p. 266) argues the republic is a striking example of what can be achieved by a small country with a limited supply of conventional tourism resources, but in possession of financial reserves and a sense of vision. Although ambitious plans are made for the future, some significant barriers to Singapores tourism development exist. Events such as the Asian Financial Crisis in 1997, terrorism fears and economic slowdown in 2001 and the Severe Acute Respiratory Syndrome (SARS) outbreak in 2003 temporarily hinders visitor volumes. Henderson (2007b, p. 266) argues irrespective of the effects of these shocks, the underlying trend is of a reduced growth rate with existing and emerging rivals threatening market share.

Comparison Dubai & Singapore

When comparing Dubai with Singapore, one will notice the destinations are both relatively small and wealthy with a successful international tourism industry. Henderson (2007a, p. 33) discusses a common commitment to growth and a willingness to intervene and invest on the part of governments. However, Henderson (2007a) also argues the destinations are in a different growth stage when applying Butlers Tourism Area Life Cycle model (1980): Singapore is attempting to avert stagnation while Dubai is growing at a fairly rapid pace (p. 4

33). Lohmann et al. (2009) state Dubai successfully imitated Singapores tourism destination development strategy. Furthermore, a similarity constitutes the role their governments played, ruling a consistent and long-term oriented investment and development strategy (p. 207) . It is proposed that this enabled the integration and governance of the airlines, airports and tourism organizations, creating synergy.

Sustainable Tourism Development Dubai

According to Zhenhua (2003) there are numerous definitions for sustainable development. This paper prefers the definition provided by the World Tourism Organisation (2001): Sustainable tourism development meets the needs of present tourists and host regions while protecting and enhancing opportunities for the future. It is envisaged as leading to management of all resources in such a way that economic, social and aesthetic needs can be fulfilled while maintaining cultural integrity, essential ecological processes, biological diversity and life support systems. Zhenhua (2003) argues a destination should not limit growth, but manage growth in a manner that is appropriate and suitable to the destination environment, the tourists and the host population.

Tourism development in Dubai is unsustainable as it causes environmental degradation, negative cultural impacts (loss of culture and authenticity) and overcommodification of the tourism landscape, to name a just a few effects. Sharpley and Telfer (2008) recognize the future plans to increase the amount of attractions and hotels which will have a major impact on the environment. They also fear the more Dubai develops, the more it will lose its Middle Eastern atmosphere. According to Hazbun (2003, p. 7) tourism development in the Arab world should not be a matter of seeking investment to increase tourism capacity (with more hotel rooms, tourist buses, etc.) but development should mean that firms are learning how to increase the quality of their services and the richness of experiences they provide. Although the UAE is successful in promoting tourism development, tourism flows to this region have long been hampered by several external negative factors and patterns of development which fail to exploit the full potential of tourism as a catalyst for sustainable economic development (Hazbun, 2003).

To ensure social, environmental and economic sustainable tourism development, public authorities, private firms and international organizations should cooperate to develop best practice standards and procedures. Feasibility and environmental impact studies should be carried out to observe sustainable practices (Hazbun, 2003). In 2007 the Dubai Urban Development Framework was created, to observe the social and environmental 5

consequences of urban development. Moreover, it should facilitate integration between government, quasi government and private stakeholders. Balakrishnan (2008, p. 75) points out this is important, as already 50 percent of the emirates land is under urban planning and as more businesses move to this region, coordination between them and government for smooth functioning is paramount.

List of References

Hazbun, W. (2003) New Agenda for Tourism Development in the Arab World, paper presented at the conference League of Arab States, Cairo, Egypt. Henderson, J. (2006) Tourism in Dubai: overcoming barriers to tourism development, International Journal of Tourism Research 8: 87-99. Henderson, J. (2007a) Destination Development: Singapore and Dubai Compared, Journal of Travel and Tourism Marketing, forthcoming. Henderson, J. (2007b) Uniquely Singapore? A Case Study in Destination Branding, Tourism and Hospitaltiy Research, 10 (3), July: 246-254. Husain, S. (2007a) Mideast tourism likely to see $3tr investment by 2020, Gulf News, May 1, p. 46.

IMD (2005), World Competitive Yearbook 2005, available at: www.dubaided.gov.ae/Statistics2006/ WCY.pdf Lohmann, G., Sascha, A., Koch, B., Pavlovich, K. (2009). From Hub to Tourist Destination An Explorative Study of Singapore and Dubais Aviation-Based Transformation. Journal of Air Transport Management, 15 (5), pp. 205-211. Rahman, S. (2007b), Tourism comprises 30% of Dubai GDP, Gulf News, May 4, pp. 31-34.

Telfer, D., Sharpley, R. (2008) Tourism and Development in the Developing World . London: Routledge

Teo, P., Chang, T. Singapore: tourism development in a planned context. IN Hall, C. Michael & Page, Stephen, eds. Tourism in South and Southeast Asia: issues and cases / Boston : Butterworth Heinemann, 1999. pp. 117-128. WTTC (2007a), Executive summary: travel and tourism navigating the path ahead , World Travel and Tourism Council, London, available at: www.wttc.org/TSA%202007/ Executive%20Summary%202007.pdf (accessed November 10, 2013). Zhenhua, L. (2003) Sustainable tourism development: a critique, Journal of Sustainable Tourism, 11 (6). pp. 459-475.