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Improving Tourism in Abu Dhabi Case Study

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Updated: Oct 27th, 2020

Executive Summary

The tourism industry of Abu Dhabi has grown steadily within the past two decades. This development has catalyzed by the region’s rapid economic development. The economic position is encouraging more people to support the industry. Domestic tourism has improved significantly in this country. Similarly, foreign tourists have been selecting Abu Dhabi as a preferred destination. Unfortunately, some negative issues have emerged in the recent past. These concerns have been observed to affect the industry’s profitability. Such changes are attributable to a number of factors such as the changing economic developments, environmental issues, and political forces. The unrest experienced in countries such as Syria continues to affect the industry. The emergence of new technologies and changing consumer needs are driving forces in the industry.

Abu Dhabi’s children/family tourism subsector is still underdeveloped. This gap can therefore be addressed using powerful initiatives aimed at supporting the needs of different family members. With such gaps in the industry, new malls focusing on the needs of children should be considered. This is the case because the country has ignored the subsector for many years. This move will play a positive role towards supporting the Abu Dhabi Vision 2030. The mall will be aligned with the four aspects of the vision. These aspects include “economic, environment, social, and culture” (Fuller, 2013, para. 3). The children will engage in a wide range of exercises and eventually overcome various health conditions. They will eventually become healthy adults capable of supporting the country’s economic goals. This discussion gives a detailed analysis of the issues surrounding the nation’s tourism industry. The paper proposes new measures that can make transform Abu Dhabi’s tourism industry.

External Environment

Macro-Environment: PEST-D Analysis

Political Factors

Abu Dhabi is a leading tourism destination because of the current political climate experienced in the nation. This political stability has made it possible for many companies such as Al Abbas Group and Airlink International UAE to engage in successful business operations. Such firms have managed to offer holiday tours and support systems to more clients (Fuller, 2013). The uprisings experienced in the Middle East appear to threaten the tourism industry.

Economic Factors

This country has good economic indicators. The country’s gross domestic product (GDP) has been growing positively. More people in the nation are getting better salaries. This development encourages more people to support domestic tourism. The changes in the global economy have led to fluctuating oil prices (Blanke & Chiesa, 2013). These aspects are expected to affect Abu Dhabu’s tourism industry.

Social Factors

The global population is growing rapidly. People are focusing on the best approaches to lead better lifestyles. In Abu Dhabi, cultural heritage and tourism are embraced as critical social factors (Prabhu & Subramanian, 2015). This issue explains why the industry might achieve its goals within the next few years. Children tourism is also becoming a common practice in this industry.

Technological Factors

Technology has been changing very fast especially in the Gulf Cooperation Council (GCC). Governments are promoting the use of 4G and 3G networks. Modern companies such as Google are making it easier for more people to use Google Maps (Fuller, 2013).

Porter’s 5 Forces Analysis

The Porter’s 5 Forces Analysis below gives a detailed analysis of Abu Dhabi tourism industry.

Threat of New Entrie

This industry is characterized by many competitors and newcomers (The Government of Abu Dhabi, 2016). The sector attracts many players such as tour services and internet providers. The sector will attract more players in the future.

Competitive Rivalry

Competition is high in Abu Dhabi’s tourism industry. The country has many firms such as Al Tayer Travel Agency, Al Hamed Enterprises, and Amadeus Gulf LLC that compete for customers in this industry (Fuller, 2013). Many people have to choose the best services from the providers of tourism services.

Bargaining Power of Suppliers

The industry relies on different providers of services such as internet connections. Tourism firms must also collaborate with different oil companies in order to realize their objectives (Blanke & Chiesa, 2013). This process explains why the bargaining power of suppliers is low.

Bargaining power of buyers

The increasing number of companies in the industry makes it easier for the targeted customers to select the best providers. The buyers are sensitive to the offered prices. The customers can substitute the existing products. This analysis shows conclusively that the bargaining power of customers is extremely high (The Government of Abu Dhabi, 2016).

Threat of Substitute Services

The increasing number of service providers shows conclusively that the customers can select from a wide range of available services (Fuller, 2013). This force explains why different companies should work hard to attract more clients.

Driving Forces

Several driving forces will dictate the future of Abu Dhabi’s tourism industry. These forces are capable of reshaping the success of many companies in the industry. A proper understanding of such forces can make it easier for more firms to emerge successful (Nyarko, 2010). The first force driving this industry is globalization. This factor qualifies as a driving force because it dictates the manner in which people travel and do business globally.

The second driving force is political development. Political forces dictate the manner in which people travel for tourism or other personal goals. This issue qualifies as a driving force because the political forces experienced locally and globally can affect the industry significantly (Blanke & Chiesa, 2013). The political stability in Abu Dhabi has the potential to promote domestic tourism.

The other undeniable driving factor is technology. This qualifies as a driving force because it reshapes the manner in which people communicate and share information. Technology will influence the industry by providing new opportunities to support the diverse needs of more tourists (The Government of Abu Dhabi, 2016).

Social factors continue to remain a powerful driving force in the industry. In Abu Dhabi, more people are embracing the best practices to support the region’s cultural heritage. Such social forces will therefore play a positive role towards supporting this industry (Prabhu & Subramanian, 2015). Future players in the industry should use sustainable strategies to protect the natural environment.

Strategic Group Map

A proper strategic group map can be used to analyze the position of kids-friendly entertainment within the wider area of tourism in Abu Dhabi (Nyarko, 2010). That being the case, the targeted parameters include the availability of tourism products and the quality of services. These parameters can be used to analyze the major strategies implemented to address the recreational needs of more children. The created strategic group map is presented below.

Strategic Group Map.
Fig 1: Strategic Group Map.

From the above analysis, it is notable that the industry is focusing on the best measures to implement kids-friendly entertainment. This approach is being undertaken in order to support the needs of more children. However, the quality of such services is something demanding. This is the case very few regions are characterized by such tourism services. Additionally, few resources are available to the targeted children (Nyarko, 2010). New measures should be undertaken in order to support this subsector.

Key Success Factors

The following key success factors (KSFs) can be used to describe Abu Dhabi’s tourism industry. The focus is on children entertainment sub sector. The KSFs selected below have the potential to guide different players in the sub-sector (Diaa, 2016). The KSFs can be used to support the growth of the sub-sector.

KSF Description
Technology & Innovation The use of modern technology is driving innovation. The process will result in better services and support systems for more children.
Quality The current social forces explain why more people are in need of quality services. Companies that are aware of this need will focus on it in order to realize their goals.
Safety and security Many customers in the sub-sector expect different theme parks to provide adequate security and promote safety.
Corporate social responsibility There is need for more companies to embrace the idea of CSR in order to attract more customers (The Government of Abu Dhabi, 2016).
Uniqueness The offered products or services in this industry should be unique and capable of addressing the needs of the targeted customers.
Diversity This KSF indicates that the service providers capable of providing diverse services to the clients will eventually realize their goals.

Industry Profile and Attractiveness

The above analysis indicates that there are key factors that can make it easier for newcomers to emerge successful in this industry. More families are getting better incomes than ever before. The emergence of modern technologies is a new opportunity that continues to make this industry more attractive. The region’s economic and political positions experienced in Abu Dhabi will attract more companies (Diaa, 2016). Improved infrastructure and availability of new resources characterize this industry.

Family tourism is supported under the Abu Dhabi Vision 2030. More companies and providers of tourism services are finding the industry more attractive. The current players in the industry have been able to make profits. More children are visiting different theme parks (Kids and family attractions, 2016). The industry will remain profitable and competitive.

Idea Generation and Development

Proposed Idea

The current situation shows clearly that family tourism has been embraced in Abu Dhabi. The number of theme parks focusing on the needs of more children has increased in the country. More companies have emerged in Abu Dhabi in an attempt to deliver such services to more children. Similarly, the number of malls focusing on the needs of adults is on the rise. Such malls have transformed the manner in which people purchase different products in the country. These malls promote both foreign and domestic tourism in the country (Diaa, 2016).

However, there are no malls focusing on the needs of children. The proposed idea for this exercise is constructing a mall that targets children only. This approach will ensure the needs of more kids in the country are met. Several factors explain why this idea is viable. To begin with, more parents are getting good salaries. The mall will therefore attract these parents and encourage them to bring their children (Kids and family attractions, 2016). The mall will be characterized by a wide range of services and products. The children should be allowed to play video games and sample a wide range of entertainment options. The mall should use several activities to attract more children.

Viability

This idea will ensure more parents shop while at the same time supporting the needs of their children. The use of innovative products and technologies will empower more children. This recommendation is necessary because the number of entertainment parks targeting children only offer inadequate services. The proposed idea will ensure more children have access to different gaming and entertainment options. The malls will be characterized by playing grounds and recreational facilities (Kids and family attractions, 2016).

Resources and Capabilities

The resources presented below will be used to support the implementation of the proposed idea.

Tangible Resources
Financial
  • The firm will require enough financial resources
Physical
  • Modern plant and facilities are needed for the mall
  • Modern equipment for entertainment will be required
Technological
  • Innovative products are needed to satisfy the needs of more children
  • Gaming systems and Sony Playstation modules will be needed
Organizational
  • Effective strategic planning process
  • Excellent evaluation and control systems
  • Use of proper workplace strategies
Intangible Resources
Human
  • Experience and capabilities of employees
  • Trust
  • Managerial skills
  • Firm-specific practices and procedures
  • Awareness of children’s diverse needs
Innovation and Creativity
  • Technical and scientific skills
  • Innovation capacities will also be needed to deliver quality services
Reputation
  • A reputable brand name will be needed
  • Reputation with customers for quality and reliability
Organizational Capabilities
  • Firm competences or skills the firm employs to transfer inputs to outputs
  • The firm will have the capacity to combine tangible and intangible resources
  • The mall will hire and retain the best employees
  • The firm will offer exemplary services to the children
  • New ideas will be used to transform the experiences of more clients

Estidama Framework: Sustainability and Impact

The Abu Dhabi Vision 2030 was published by the government in 2007. The purpose of this vision is to promote economic development in the United Arab Emirates. The ultimate goal of the vision is to ensure all stakeholders produce long-term goals (Diaa, 2016). Tourism is included part of the vision agenda aimed at preserving Abu Dhabi’s culture and heritage.

Proposed Idea: Abu Dhabi 2030 Strategic Framework

Environment
The proposed idea will minimize the impacts on the natural environment. Recycling techniques and CSR approaches will be embraced.
Economics
The idea will play a positive role towards promoting economic performance. The children will eventually become responsible adults.
Culture
The mall seeks to support Abu Dhabi’s cultural heritage.
Social
The proposed mall will play a positive role towards improving the social attributes of the country.

Description and Conclusion

The proposed idea of a mall strictly for children will emerge successful. This idea is sustainable because the mall will be situated in a major city. The targeted clients are children. The clients might not have adverse effects on the natural environment. The mall will embrace the best initiatives to promote the CSR concept. The idea is also feasible since more people are focusing on the best strategies to support family tourism. The current economic performance will ensure the mall realizes its goals (Diaa, 2016). The mall is therefore aimed at promoting the country’s cultural heritage.

References

Blanke, J., & Chiesa, T. (2013). The travel & tourism competitiveness report 2013. Geneva: World Economic Forum.

Diaa, S. (2016). Gulf News. Web.

Fuller, E. (2013). Web.

(2016). Web.

Nyarko, Y. (2010). The United States Arab Emirates: Some lessons in economic development. Working Paper, 1(1), 1-13.

Prabhu, N., & Subramanian, K. (2015). The impact of sports tourism on the UAE: A case study of the Indian Premier League (IPL). African Journal of Hospitality and Leisure, 4(1), 1-8.

The Government of Abu Dhabi. (2016). The Abu Dhabi: Economic Vision 2010. Web.

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