Dubai Tourism Marketing and Branding - Case Study Example

International Leisure and Tourism Marketing Case of Dubai Dubai Tourism Marketing and Branding The UAE is a seven emirates federation in the Arabian Peninsula on the Persian Gulf. A small country in comparison with a population of 4.6 million in a land area expanding approximately 30,000 square miles (Aldi et al. 2011). The seven states (emirates) of the UAE include: Abu Dhabi (capital), Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah and Umm al-Quwain. The UAE touches borders with Saudi Arabia and Oman. It also shares sea borders with Bahrain, Qatar, Kuwait, Iraq and Iran. Since 1960s the UAE’s landscape has dramatically shifted after oil discovery in Abu Dhabi. By the end of 1962 it was the first emirate exporting oil (Aldi et al. 2011). The nature’s gift of crude oil transformed UAE’s society and economy. By the end of 1971 the emirate claimed independence from the British hold. Later, they established a formal federation of six emirates or states, which the world came to know as the United Arab Emirates. Ras al-Khaimah was the seventh emirate to join the country. After establishing itself as a nationhood the UAE formed its constitution to formalize its political and legal system. The decade of the 1970s marks unprecedented growth of the UAE. This rapid development was fueled by exploitation of crude oil, both offshore and onshore. According to an estimate the UAE 97.8 billion barrels of oil reserves making it share 7% of the global reserves (Aldi et al. 2011). The current world production in the UAE is 2.9 million barrels per day. Estimates suggest that the UAE can continue to pump oil at this rate for another 93 years. Other than oil the UAE has huge gas reserves, almost 3.3% of the global gas supply (Aldi et al. 2011). In terms of economic development Dubai has covered considerable distance in leaps and bounds. It has become a global icon for tourism. The World Tourism Organization (WTO) estimated the number of tourists for the year 2012 at -1% in the Middle East, which is healthier compared to a decline of 7% in the year 2011 (Mazza, 2012). The political turmoil contributed to this significant decline. The Middle East on the whole earned $46 billion from tourism in the year 2011. The UAE contributed 6.5% of its GDP from tourism in 2011 (Mazza, 2012). Studying this increase from an employment perspective the tourism industry of the UAE supported 166,000 jobs. Strategy The UAE (Dubai in particular) is an exception to the rest of Middle East when it comes to peace and stability. The UAE considers tourism as its core economic activity. The economic development plans are made with the premise that tourism will fuel it. To diversify and strengthen its economy the UAE considers tourism as its prime driving force. It is evident that the UAE wants to cut down its dependency on oil production and shift towards a service-oriented economy. Promoting tourism is a key strategy to achieve this. This strategy has proved very successful. According to estimates in the year 2007 the non-oil revenues were 63% of GDP (Mazza, 2012). The Dubai is the center of tourism in the UAE and it contributes over 80% of non-oil GDP in the UAE (Mazza, 2012). It is for this reason the city is considered the top tourist destination. It is ironic that due to the Arab spring the whole of Middle East suffered due to business loss. But Dubai thrived because many businesses headed to Dubai for a stable environment. Dubai’s strategy has always been to establish a brand associated with comfort, luxury, efficiency and political stability (Temporal, 2012). It is evident in all of city’s promotional campaigns. The impact of tourism on the globe, its contribution to GDP and employment opportunities makes it a winner for including it in the countrys public policy strategy. The majority of marketing and branding theories regarding tourism is usually limited to designs and making logos. However, when branding encompasses other areas of public policies that facilitate trade and investment, it can be more rewarding. For a city brand to be successful it must represent all of its stakeholders (Dinnie, 2011). Implementing this is not easy because the branding strategy at the national level includes the requirements of both the internal and external stakeholders. Branding a city is similar to branding a product or service because the ultimate goal is the same; to create loyalty to the city through various segments that the city offers (Dinnie, 2011). It is also true that only branding and promoting the image is not enough because the destination loyalty (the perception that the tourists have about the place) depends on the level of safety provided, cultural differences as well as the perception about transportation convenience. But Dubai is a textbook example of using public policy to successfully promote the tourism industry. Shaikh Mohammed bin Rashid Al Maktoum, the ruler of Dubai, set the strategic vision for this state, where tourism would be the catalyst luring the foreigners in and their investments and catalyzing them towards other business developments. So the focus was not on establishing a tourism industry but using tourism as a ‘hook’. There is a meticulously planned strategy for economic diversification where tourism plays the key role (Boniface & Cooper, 2009). Later, Dubai self-branded itself to business travelers of Western Europe and the neighboring Middle Eastern countries. To achieve the desired success this strategy needed support through intense transportation facilities and viable infrastructure development. Therefore, the Dubai Commerce and Tourism Production Board (DCTPB) and the state owned Emirates Airlines were established (Mazza, 2012). DCTPB later became The Department of Tourism and Commerce Marketing (DTCM). These two departments were operating in a loop. The DTCM would promote the businesses involved in promoting the tourism industry of Dubai, which included the Emirates Airlines. Initially the focus was on high-end luxury facilities that serve as spectacular attractions for the worlds business travelers. In the same regards many hotel chains were developed that were supervised under the government. The speed of this development was unprecedented so much so that by 1985 26/42 hotels of Dubai were classified as first class (Mazza, 2012). So, the ‘hook’ strategy proved immensely successful which gave space for the strategists to start thinking about developing a new dimension of tourism. The 30 year development plan saw Dubai as an international business and service hub. It had three phases of development. The first two phases where investment driven luring the best business minds to Dubai. The last phase is marked by innovation development. A lot can be written about the success of the policy but it is a fact that the planning process advantage means the clarity of what the city brand stands for (Dinnie, 2011). Dubai is planning and vision has always been very clear which is why its execution has been an example for the developing nations. For instance any projection figures were based on realistic assumptions and data. The first phase 1996-2000 started by establishing DTCM as a principal authority to plan, supervise and develop tourism in Dubai. The unique aspect of this strategy was the realistic approach because Dubai was well aware of its lack of domestic expertise and skills. Therefore they invested huge sums of money for hiring external consultants so they could develop long-term plans for the emirate. Another example of this tourism strategy was crafting and executing liberal trade policies. For instance implementing “open skies” transportation policies was a major step in making Dubai the access for tourists (Mazza, 2012). It allowed any airline to fly through Dubai. The Dubai administration also realized very early that the culture and religious constrictions would be detrimental to the growth of tourism industry in this emirate. Therefore, Dubai has removed the dress code and allowed alcohol consumption. It is now recognized as relatively liberal state of the UAE. Hence the mere relative freedom makes it a better tourist attraction than the rest of the Middle East. It was not only the administration that made efforts in making Dubai world’s tourism capital. The Royal family also made significant investments in this emirate. Burj Al Arab, the seven star luxury hotel, is a classic example of this. The UAEs Royal family owns this iconic hotel, which is a part of the state owned Jumeirah international hotel chain. The strange business strategy for constructing this marvelous hotel is evidence of the tourism oriented approach. For instance many financial analysts doubt that this seven star hotel would ever return the acceptable profit. But despite not luring sufficient tourists to this hotel it is an iconic monument for Dubai. A symbol of prosperity that triggered more high-end luxury hotels and associated developments by other international hotel chains. The Dubai administration faced a challenge for attractive tourism because of the hot climate. Dubai is known for being the desert it was before 1970s. They have constructed skyscrapers but the temperature and average climate is very hot. The summer season is marked with scorching sun, not an attraction for the tourists. The government realized that the summers would mean dry season for the tourism industry unless they create certain attractions. Therefore, many events were specifically created for the summer season to counter the hot climate. The Dubai shopping Festival and the Dubai Summer Surprises are the main summer attractions for Dubai. Dubai Summer Surprise is a 10 week shopping event specifically targeting children. Huge discounts are offered for hotels and shopping packages specifically targeting families. Other attractions at this event include Bedouin weddings, horse races, tennis, golf, powerboat races, rugby tournaments etc. all of these events are loaded with generous prizes. From a business point of view Dubai has tested and applied many strategies and most of them have worked well in its favor. One of the most successful strategies that is often less talked about is the strategic partnership between the private sector and the government. This system serves as the key factor behind the success of Dubais tourism industry. The thought behind this strategic partnership was to use the cost of developing tourism attractions. These partnerships include local businesses as well as international organizations. However, the majority of investors belong to the Middle East. The success of this strategic partnership can be measured from the fact that most of these businesses were started by the DTCM but later they became fully independent private businesses. The first decade of this millennium marked the second phase of Dubais developmental plan. This phase was specifically targeted towards marketing and promotional ventures that were supported by their offices in 15 chief international markets (Mazza, 2012). The goal of this strategy was enhanced by including management of hotel licensing, supporting tour operators, employing transport operators and tour guides. The goal of this phase of development included developing sustainable tourism, promoting public-private partnerships, quality control in the tourism industry, creating employment opportunities and skill development. Dubai is not oblivion of the importance of culture and its role in tourism attractions. The DTCM initiated a policy for conserving culture during this phase of development. It is why the period from 2001 to 2010 saw many cultural events in Dubai. The pro-tourism policies of Dubai included liberalizing the visa requirements and lenient approach towards real estate ownership. Dubai and the whole of UAE is very rigid regarding the land ownership; it does not allow foreigners to own a piece of land. However, such policies were relaxed a little by allowing foreigners to own land in certain tourist spots. The areas like Internet and Media Cities, the Dubai Marina and the Palms allow foreigners to completely own the rights of lands (the actual implementation is limited to 99 year leases) (Mazza, 2012). The Dubai administration made efforts to improve employment opportunities for the locals. However, only 7% of the local population is over the age of 15. Moreover, they are more interested in white-collar jobs and managerial positions. Tourism is not a favorite employment sector for the locals. Despite the fact that the efforts to incorporate the locals in the tourism industry went to waste the intention was based on textbook tourism theory. Cities depend on its residents for cultural and economic vibrancy and maintaining a diverse skilled population is crucial for it because any disenchantment can trigger a vicious downward spiral (Dinnie, 2011). The Dubai administration was well aware of this threat and therefore made every possible arrangement to prevent it. The second phase of the 30 year plan for Dubai saw the supply of hotels and hotel rooms double in numbers. The focus of this growth has been the luxury segment of four and five star hotels. The average growth shown in this sector is 16.5% for four stars and 10.2% for five-star hotels. Although Dubai showed leniency towards the dress code and alcohol consumption the open sale of alcohol is still prohibited in Dubai (Mazza, 2012). Hence, the majority of the tourists prefer staying in high-end hotels, which eventually made Dubai one of the most expensive places for staying in hotels. Suggestions Dubai is unique from the rest of tourist destinations within its vicinity. Dubai development is not a concern of tourism dollars supporting the rest of the economy. On the contrary the oral dollars and the revenue generated through trade and foreign investment is investing in infrastructural projects that I diversify the economy and as a result it has also preserved its local heritage in an area that was rapidly becoming globalized (Govers, & Go, 2009). This can prove a challenge for Dubai tourism industry because they need to strike a balance between preserving and offering their cultural heritage is an attraction and accommodating the foreigners who are looking for a home away from home. Culinary Tourism, also known as the tasting tourism or the gastronomic tourism is a major attraction of a region but sadly it is missing from Dubai’s tourism attractions. There is an innate relationship between tourism and food. Sometimes a region is specifically known for its food and tourists flock the place to taste the delicacy. Dubai does not promote its local delicacies to foreigners instead it has welcomed the fast food industry from the United States to infest Dubais market to cater the needs for the foreigners. It is an important tourist attraction that can enhance the experience of the visitors. It is not only nourishment that the tourists seek, it is about entertainment and pleasure. Food also triggers social engagement and dialogue. Every culture has different foods. When tourism is promoted and marketing campaigns are launched they specifically promote certain delicacies because they become symbolic of a culture or tradition. The tourists can interact with foods in many different ways. Certain tourists are highly interested in the history and ingredients of the food. They engage in simple sampling activities to gain knowledge. Wine and other beverages are specifically popular for this form of tourism. Dubai has taken a different approach. It makes the visitors feel at home. The influence of American fast food restaurants has transformed the food culture of Dubai. During the 1990s Shaikh Mohammed bin Rashid Al Maktoum identified tourism as a sustainable economic development option (Mazza, 2012). It seems good but the local food also represents local culture. Tourists who want to ‘taste’ the culture of Dubai might be disappointed. The tourism administration can enhance their brand by incorporating local food. Conclusion The success of Dubai as a brand cannot be attribute it to a single factor. The discovery of oil in the 1960s proved crucial because it provided the essential money to turn the dream into reality. Another factor was the involvement and excellent entrepreneurial skills of the royal family that supervised and invested in Dubai’s development. A huge factor was accommodating the foreigners as well as considering the local stakeholders. This is not easy as it requires high levels of political administration as well as excellent business acumen. With such advancement there is an inherent threat to the local culture of Dubai. But the history tells that Dubai has seen many odds and has emerged as a winner. It is already growing into the world capital of tourism. References 1. Aldi et al. 2011. The Dubai Tourism Cluster: From the Desert to the Dream. Available through: Institute for Strategy and Competitiveness. Website http://www.isc.hbs.edu/pdf/Student_Projects/UAE_(Dubai)_Tourism_2011.pdf [Accessed 7 May, 2014] 2. Boniface, B. G. & Cooper, C. 2009. Worldwide Destinations and Companion Book of Cases Set. Amsterdam: Elsevier. 3. Dinnie, K. 2011. City Branding: Theory and Cases. NY: Palgrave Macmillan. 4. Govers, R. & Go, F. 2009. Place Branding: Global, Virtual and Physical Identities, Constructed, Imagined and Experienced. NY: Palgrave Macmillan. 5. Mazza, G. C. 2012. Development of Tourism in Dubai. Consumption Culture in the Middle East. Available through: The Lauder Institute. Website http://laudergastronomy.com/wp-content/uploads/2013/05/Development-of-Tourism-in-Dubai_Grace-Chang-Mazza.pdf [Accessed 7 May, 2014] 6. Temporal, P. 2012. Asia’s Star Brands. John Wiley & Sons. Read More