Executive Summary
The following document outlines a detailed business plan for a new venture in the travel tourism sector of the United Arab Emirates economy. UAE Tours will offer an original travel and tour experience unprecedented in the United Arab Emirates at this time. UAE Tours strikes a balance between the domestic Middle Eastern travel market, the international tourist and adventure tourist market, and destination operators currently at work in the capital and second-largest metropolitan center in the United Arab Emirates. The goal of the company’s executives is to provide a unique, personal, and exhilarating experience for tourists visiting the UAE, an experience that until this time remains unavailable in Middle Eastern tourism operators and tour companies.
The business plan for UAE Tours includes detailed coverage of the company’s marketing plan, a SWOT analysis of the current trends, government policies, and economic developments that will likely have an impact on this business venture. The plan also contains a detailed overview of the company’s competitors located in Abu Dubai and the surrounding region.
UAE Tours boasts an important competitive advantage over the other tour operators in Abu Dubai in that it will actively develop strategic partnerships with high profile events in the regions and the many of the local hotels in Abu Dubai and the region. UAE Tours extends its brand via a series of strategic partnerships with world-class events such as the Formula One race at the Yas Marina Circuit (Yas Marina Circuit, 2011).
The report also includes financial information, sector forecasts, an overview of the current political and economic landscape in the United Arab Emirates, and a detailed overview of the tourism sector and the anticipated growth of this industry over the next five years.
Please note, the following report is confidential and remains the property of the UAE Tours business owners listed above. The following plan is intended only for use by the person to whom it has been communicated. Therefore, any reproduction or disclosure of any of the contents listed herein, without the prior written consent of the UAE Tours, is prohibited and will be prosecuted to the full extent of the law.
Description of the Business
UAE Tours represents a new direction in the travel tourism sector based in the United Arab Emirates. The UAE Tours headquarters will be based in the heart of Abu Dhabi, a thriving Middle Eastern metropolis that attracted 1.65 million tourists from all over the world in 2010, according to the Abu Dhabi Tourism Authority (Hotelier Middle East, 2010; UAE Interact, 2011). UAE Tours strives to optimize the UAE experience for all international and regional tourists and show the world the beauty and charm of the United Arab Emirates.
The business owners of UAE Tours are as follows: Customer A, CEO; Customer B, CFO; Customer C, Chief Strategy Officer; Customer D, Senior Vice President of Marketing; Customer E, Senior Vice President of Sales, and Customer F, Senior Vice President of Operations.
UAE Tours will provide tour options and packages at a competitive rate to all local residents, schools, corporations, workers’ organizations, community groups, and international and regional tourists and business executives. At present, most of the local tour operators in Abu Dhabi provide essentially the same standard fare. Though there are many tour agencies in the United Arab Emirates, most of these firms offer only the cliché desert safari experience. Some include stops at several local and well-traveled monuments, as well as shopping trips to the local souks and shopping centers, and a few caters to the adventure tourists with deep-sea diving, deep-sea fishing, parachuting, hot air balloon trips, catamaran trips, aerial tours, and off-roading experiences.
UAE Tours differs from the norm in that it offers a wide range of activities and sight-seeing plans that will operate all over the UAE’s seven emirates: Abu Dhabi, Dubai, Sharjah, Ajman, Umm al-Qaiwain, Ra’s al-Khaimah, and Fujairah. UAE Tours will also be taking into consideration major events that will be taking place in the UAE. UAE Tours will develop strategic partnerships with UAE hotels as well as specialized travel and tourism companies in the region. UAE Tours will work with the following companies to create a unique and celebratory travel experience for all UAE Tours clients:
Think Flash
Think Flash is a promotional company located in Abu Dubai that specializes in live entertainment and sporting events. Think Flash produces live entertainment platforms that “stimulate and enhance grassroots creativity from across the region” of the United Arab Emirates (Flash Entertainment, 2011, n.p.). The mandate of the company serves the larger goal of Abu Dhabi and Dubai to grow to world-class tourist destinations and attract a consistent stream of visitors in search of exhilarating live performances by some of the world’s top brands and exciting sporting competitions. Think Flash works with the most talented entertainment partners in Abu Dhabi, the region, and the world at large to cater to world-class event experiences that put Abu Dhabi on the entertainment map.
In recent years, Think Flash has hosted such world-class artists as Justin Timberlake, Bon Jovi, Christina Aguilera, Alicia Keys, Shakira, Coldplay, Sade, Andrea Boccelli, Beyonce, The Jonas Brothers, Guns and Roses, Eric Clapton, Timbaland, Prince, Kanye West, Sean Paul, Kelly Rowland, The Killers, Aerosmith, Linkin Park, DJ Tiesto, Metallica, Janet Jackson, Snoop Dogg, Armin Van Buuren, and Kings of Leon (Flash Entertainment, 2011).
Think Flash has also hosted, organized, or been involved with some of the United Arab Emirates’ most exciting sporting events in recent history, including the Mubadala World Tennis Championship, Capitala, World Tennis Championship, Wakestock Abu Dhabi, UFC 112: Invincible, NBA JamFest Abu Dhabi, and the FIFA Club World Cup UAE 2010 (Flash Entertainment, 2011).
Think Flash and UAE Tours share the common vision and commitment to bring the world’s highest quality entertainment and sporting events to the residents of Abu Dhabi and its visitors. UAE Tours remains confident that the strategic partnership we have developed with Think Flash will not only draw attention and recognition to Abu Dhabi as a world-class tourist destination for leisure and entertainment that attracts the interest of regional and international guests, it will also allow UAE Tours to offer our tour clients entertainment experiences as part of their tour packages that go far beyond the ordinary.
Yas Marina Circuit
The Yas Marina Circuit is a world-class race track located on Yas Island in Abu Dhabi. The entertainment and tourist complex contains the Yas Marina Circuit, a world-class racing facility that became the official home of the Formula One™ Abu Dhabi Grand Prix in October of 2009. The track was revealed via the last race of the 2009 World Championships, the first Formula One™ Etihad Airways Abu Dhabi Grand Prix, to over 50,000 Formula One™ enthusiast (Yas Marina Circuit, 2011). The Yas Island Marina Circuit attracts a world-class audience of race enthusiasts and families from all over the world. The realization of the Yas Island Marina Circuit involved two years of planning, the work of 14,000 employees, and over “35 million construction manhours” (Yas Marina Circuit, 2011, n.p.). Upon its completion, the Yas Marina Circuit was quickly recognized as “one of the most technologically advanced circuits in the world” (Yas Marina Circuit, 2011, n.p.). The facility functions as a training track as well as local home for the development and support of motor sporting events in the United Arab Emirates and the Middle East at large (Yas Marina Circuit, 2011). According to the Yas Marina Circuit (2011), the goal of the facility’s owners is to “have a UAE national competing as a driver in F1™ within 10 years” (Yas Marina Circuit, 2011, n.p.).
The multi-faceted facility was embraced by the Abu Dhabi public as well as the world at large. “The whole of UAE was eager to take in the beautiful landscaping, traditional Arabic culture, and welcoming hospitality alongside sensational on-track action. Yas Marina Circuit would encourage the growth of sporting culture in the UAE and soon become the center for motorsport excellence in the Middle East” (Yas Marina Circuit, 2011, n.p.). The World Travel Awards, based in London, awarded the Yas Island development team Aldar Properties with the title of the World’s Leading Tourism Development Project (Gangal, 2009). The Chairman of Aldar Properties described the Yas Island facilities as “a fantastic showcase of the remarkable evolution that is taking place in Abu Dhabi as part of the 2030 plan spearheaded by the government” (Gangal, 2009, n.p.). In addition to the race track, the Yas Island complex houses the Ferrari World Abu Dhabi Theme Park, the world’s largest indoor theme park that features over 20 rides, including the fastest roller coaster in the world, the Formula Rossa (Gangal, 2009).
While the Yas Island complex is still in its infancy, the facility contains enormous potential and will continue to diversify and develop its world-class tourism offerings over the next few years. UAE Tours is over the moon to be strategically partnered with this innovative tourism initiative. UAE Tours will endeavor to leverage this partnership through coordinating tours to the circuit, and also utilizing the luxury five-star hotels located on Yas Island, including the Yas Viceroy, the Crowne Plaza, the Radisson Blu, the Park Inn, the Centro Yas Island, the Yas Island Rotana, and the Staybridge Suites.
Other exciting activities sponsored by the Yas Marina Circuit include the F1 style Single Seater experience (Yas Marina Circuit, 2011). For Formula One fans as well as anyone who is curious about the sport of racing, this activity offers the supreme race experience. Clients will feel their adrenaline levels kick up a notch once they are buckled into the 180BHP Single Seater, given a full lesson by the professional instructors employed by the race track, and brought to the race track where they can drive the 180BHP Single Seater behind the pace car for a full 20 minute drive (Yas Marina Circuit, 2011).
UAE Tours feels certain that many of their tour clients will be thrilled to participate in an out of the ordinary vacation experience such as this, which is why UAE Tours continues to partner with some of the most individual and exciting tourist offerings in the region to create life-changing travel experiences for our clients.
Abu Dhabi Music & Arts Foundation
The Abu Dhabi Music & Arts Foundation is a cultural and educational foundation devoted to arts and culture advocacy in the United Arab Emirates and the Middle East at large. H.E. Hoda Ibrahim Al Khamis Kanoo founded the Abu Dhabi Music & Arts Foundation in 1996 in an effort to fulfill the following mandate: “to advocate the power of music and arts in cross-cultural understanding…to embed music and the arts in the heart of civil society, [and]…to empower original artistic expression in the UAE and Middle East” (Abu Dhabi Music & Arts Foundation, 2011, n.p.). The Abu Dhabi Music & Arts Foundation sponsors artists, organizes fundraising activities for artists in the United Arab Emirates, and organizes and promotes cultural and artistic events in Abu Dhabi including the launch of the Nationals’ Gallery, the concert by the World Orchestra for Peace, and the Abu Dhabi Festival, an annual celebration of United Arab Emirates art and culture that attracts the world’s most accomplished musicians and performers (Abu Dhabi Music & Arts Foundation, 2011).
The Abu Dhabi Music & Arts Foundation (2011) seeks to “ensure access to the music and the arts for all. To inspire creativity and cultivate emerging talent. To nurture artistic excellence by and for the people of Abu Dhabi and beyond. To preserve the UAE’s cultural legacy [and] to…raise the appreciation of traditional culture and heritage. To position Abu Dhabi as an international cultural capital” (Abu Dhabi Music & Arts Foundation, 2011, n.p.). UAE Tours considers the work and the mission of the Abu Dhabi Music & Arts Foundation crucial to the cultural and artistic development of the United Arab Emirates as a while, and a vibrant arts scene typically enhance the tourism sector of any world-class city, as evidenced by cities such as New York and Paris. The strategic partnership that UAE Tours has developed with the Abu Dhabi Music & Arts Foundation will provide our clients with exclusive access to some of the most exciting and innovative elements of the cultural and artistic side of the Abu Dhabi and United Arab Emirates tourism experience.
Other Important United Arab Emirates Events and Attractions
UAE Tours also intends to actively pursue strategic partnerships with the organizers behind many of the key high profile events in the United Arab Emirates, including the following annual activities that take place during the high tourist season of November through February:
Abu Dhabi HSBC Golf Championship
The Abu Dhabi HSBC Golf Championship occurs in late January (Abu Dhabi HSBC Golf Championship, 2011). This championship event began in 2006 and now enjoys the status of one of the highlights of the PGA European Tour that draws some of the sport’s biggest names to the Abu Dhabi Golf Club on the PGA Tour’s Gulf Swing (Abu Dhabi HSBC Golf Championship, 2011). The Abu Dhabi Tourism Authority established the Abu Dhabi HSBC Golf Championship (2011) in order to “lay the foundations for Abu Dhabi’s emergence as a international golfing destination. Playing to a cumulative global television audience of 400 million, the championship is inextricably linked with the building of Abu Dhabi’s tourism profile as an international destination of distinction, and is integral in putting the emirate firmly on the international sporting map” (n.p.). UAE Tours seeks to develop and leverage key relationships between major international sporting events such as these and the hotels in Abu Dhabi, Dubai, and the United Arab Emirates at large to facilitate mutually-beneficial business contacts and clients.
Abu Dhabi Film Festival
The Abu Dhabi Film Festival was established in 2007 and now takes place every year in October (Abu Dhabi Film Festival, 2011). The goal of the Abu Dhabi Film Festival is to create and nurture a vital and robust film industry in Abu Dhabi and throughout the Middle East. The Abu Dhabi Film Festival “is committed to curating exceptional programs to engage and educate the local community, inspire filmmakers, and nurture the growth of the regional film industry presenting works by Arab filmmakers in competition alongside those by major talents of world cinema” (Abu Dhabi Film Festival, 2011, n.p.). UAE Tours believes that annual cultural events such as the Abu Dhabi Film Festival secure the artistic and cultural appeal of the United Arab Emirates as a tourist destination.
Saadiyat Island
Saadiyat Island translates literally as “the Island of Happiness…as it is also called, in full English translation” (Azimi, 2008, p. 350). The island rests 500 metres off the coast of Abu Dhabi. Currently under construction, Saadiyat Island combines commercial buildings and projects, residential spaces, tourist spaces, and leisure initiatives. Saadiyat Island officials anticipate that the work will be completed by the year 2020. Saadiyat Island has been called “the UAE’s most ambitious arts plan” (Azimi, 2008, p. 350). Abu Dhabi the emirate is the wealthiest of all seven emirates; as such, Saadiyat Island represents the emirate’s desire to “position…itself to become a cultural center markedly different in style and substance from the glitz of Dubai” (Azimi, 2008, p. 350). In essence, Saadiyat Island represents the centerpiece of Abu Dhabi’s plan to become the cultural and artistic hub of the Middle East and boast an art collection and cultural industry that rivals the world’s top artistic and cultural cities such as Paris and New York. Money and vision meet in the Saadiyat Island complex, as Azimi (2008) explains:
Floating off the emirate’s skyscraper-lined coast, [Saadiyat Island] is a $27 billion paradise on steroids, anchored by a 670-acre cultural district where the behemoth-like 300,000-plus-square-foot Frank Gehry-designed Guggenheim museum will open its doors in 2011, alongside a mushroom-shaped branch of the Louvre by Jean Nouvel, a performing arts center by Zaha Hadid, a maritime museum care of Tadao Ando, and a national-heritage museum named after the Emirates’ visionary founder and patron saint, Sheikh Zayed…last fall, Charles Merewether, a curator and art historian who headed the last Biennale of Sydney, was appointed deputy director of the project (p. 351).
The Abu Dhabi Tourism Authority spearheads the design and development of the Saadiyat Island complex. The principal goal of the development is to “attract no fewer than three million upscale…the team’s word of choice…tourists each year by 2015” (Azimi, 2008, p. 350). Luxury destinations such as the Saadiyat Island complex will ultimately serve the business goals of the UAE Tours owners, as these types of destinations will be attractive to the international luxury traveler and art aficionado.
Competitive Advantage
The business owners of UAE Tours believe that location remains one of its key competitive advantages over other luxury tour operators in other Middle Eastern countries as well as Europe and the United States. The United Arab Emirates has been described as a society that follows the Black Pearl Model in order to develop its economy (Dobransky, 2008, p. 45). The United Arab Emirates has rapidly transformed its economy in recent decades and now boasts a GDP per capita within the world’s top 10. The attitude of the United Arab Emirates is one that fuels economic growth. As Dobransky (2008) explains, the United Arab Emirates represents “an open/universalist society [able to]…welcome large numbers of foreigners into its country and be able to incorporate them, while still maintaining its political stability, social order, and native traditions…only a paternalistic/familial elite would share substantial amounts of its wealth with the rest of its population for the greater good and social advancement of its society” (p. 46). The UAE business owners’ main competitive strategy is to cater its brand to the luxury travel and tour consumers that flood into the United Arab Emirates from all over the world, specifically in the luxury tour market segment of the main tourist destinations in the United Arab Emirates and Abu Dhabi.
The business owners will occupy a strategic competitive edge in light of the fact that the current economic climate of many Gulf Cooperative Council countries and the United Arab Emirate seeks to diversify into non-oil industries. Consumer demand for luxury tour product offerings is on the rise (Kearns, 2011).
Similarly, the current political and economic climate, though volatile, is increasingly more open to innovative business ventures such as the one described in the UAE Tours business plan. Most if not all of the countries in the Middle East need to transform their economies in the next five to 10 years as a result of declining oil reserves. These states have amassed a large amount of wealth over the years which can support the development of non-oil infrastructure, particularly in tourism.
Also, tourism within the region will continue to grow, particularly in light of world class events such as the 2022 FIFA World Cup in Qatar. Tourism generates interest in the luxury tour industry through word of mouth, since many tourists originate in locations where where luxury tours are readily available and they will expect the same availability of the product in the Middle East.
The main competitive edge however remains the development model of the United Arab Emirates. As Dobransky (2008) explains:
Overall, the UAE may be the best development model for many countries to follow, in order to finally reach an advanced stage of economic and social development. The UAE presents itself as a developing country with what this article describes as an open/universalist society and a paternalistic/familial elite. [Dobransky]…examines the concepts of an open/universalist society and a paternalistic/familial elite and compares them with their dichotomous competitors of…a closed/isolationist society…few if any foreigners are allowed into the country…and a hostile/parasitic elite…an elite that hoards the wealth at the expense of society (p. 46).
Competitive Sectors
The business owners of UAE Tours believe have compiled the following list Tour Operators in the Dubai Region and the Abu Dhabi region and compared the luxury tour product offerings of these companies:
- Adventure Unlimited of Al Ain
- Al Ain Camel Safaris
- Alpha Tours
- Arab Link
- Arabian Adventures
- Arabian Dream Tours
- Blue Dolphin Company LLC
- Coastline Leisure
- Danat Dubai
- Desert Adventures Tourism
- Desert Rangers
- East Coast Outdoor Activities
- Net Tours
- North Tours
- Offroad Emirates
- Orient Tours
- Ra’s al-Khaimah National Travel Agency
- RMMI Travel Centre
- Seascope
- Seven Seas Tours
- Sharjah Airport Travel Agency
- Sharjah National Tourist and Transport Authority
- Sunshine Tours
- Voyagers Extreme
Very few if any of these travel and tour operators are linked to the hotels in the region. Thus from a competitive standpoint the strategic partnerships that the business owners of UAE Tours have cultivated with the five star hotels in the United Arab Emirates will place them in a favorable position over their competitors, as UAE Tours will be able to profit from the direct line of business and clientele emanating from the luxury hotel chains. This competitive edge will only strengthen UAE Tours’ market position and share as more of the projected hotels in the region complete construction and begin generating luxury clientele.
Description of Value
The business owners of UAE Tours feel certain that the innovative strategy of partnership with the United Arab Emirates leisure and entertainment companies listed above will present luxury guest with a unique value proposition. Many of the UAE Tours clients will be thrilled to participate in an out of the ordinary vacation experience such as offered by these vendors. UAE Tours will continue to partner with some of the most individual and exciting tourist offerings in the region to create life changing travel experiences for our clients. The value offered by a comprehensive entertainment experience of the United Aran Emirates will be unparalleled in the Abu Dhabi luxury tour operator market.
Financing
The initial financing required for the business owners listed above to launch UAE Tours is $2,303,717 USD. This amount will be raised through a combination of private donations, private investors, select venture capitalists, and low interest bank loans. Government incentive programs will also provide some key start up funding for IT, the design and production of marketing collateral, commercial rental space, and the acquisition of company vehicles. This amount will be recouped and completely paid off within the first 10 years of the business.
The invested money from the venture capitalists, private investors, private donations, and bank loans will allow UAE Tours to pay for office equipment and supplies, utilities, some advertising costs (those not covered by the government incentive programs), salaries for the company owners and wages for the office and the IT staff, and the cost of utilities and insurance.
Industry Outlook
This business plan draws the bulk of its information for the industry outlook for the tourism sector in the United Arab Emirates from the UAE Yearbook (2010), an annual publication produced by the UAE National Media Council. The business owners of UAE Tours also consulted numerous other sources of government economic statistics and economic vision statements, including those from the Abu Dhabi Economic Vision 2030 (2009), and the Government of Dubai Department of Tourism and Commerce Marketing (2011).
The health and continued development of the non-oil sector remains a key area of interest for policy makers in the United Arab Emirates and the Gulf Cooperation Council. According to the Abu Dhabi Economic Vision 2030 (2009), tourism represents one of the non-oil business sectors with a combined aggregate growth rate of greater than 7.5 percent each year. The growth of the tourism sector will not only serve the Emirate’s desire to realize its goal of a neutral non-oil trade balance by the year 2030, but tourism in the United Arab Emirates and the Gulf Cooperation Council accounts for one of the major target markets for luxury and status travelers from all over the world (Abu Dhabi Economic Vision 2030, 2009). The combined desires of the United Arab Emirates and Gulf Cooperation Council to move away from their oil based economies and expand tourism throughout the United Arab Emirates and amongst all of the Gulf Cooperation Council member countries create the ideal regulatory environment for UAE Tours.
The United Arab Emirates as well as Jordan represent the two main countries located in the Middle East that have been actively promoting tourism in recent years. UAE Tours intends to take ful advantage of the optimal position we enjoy having our headquarters in Abu Dhabi. The United Arab Emirates has already demonstrated its commitment to growing tourism by undertaking the inspiring campaign of construction and development that led to the artificial islands and hotels off of Dubai’s coastline. The projected cost of these ventures is upwards of $50 billion USD and the result will be over 200 new hotels in the region (UAE Interact, 2011; Mohamad, 2009).
In other areas of the Middle East, the tourist sectors remain largely underdeveloped; however, Turkey and Saudi Arabia appear to be making headway in their quest to develop these sectors. In former times, Saudi Arabia kept its doors closed to the tourists from other nations in an attempt to keep its culture away from foreign influence; however, in recent years the country has actively sanctioned visas for limited visits from foreign tourists (Kearns, 2011). According to Kearns (2011), Saudi Arabia and other Middle Eastern countries are actively restructuring their economies in an attempt to diversify, as “oil reserves are forecast to only last another 30 years” (n.p.).
Other countries such as Oman and Yemen still have minimal tourist access and are generally not well set up for the tourism trade to flourish; however, these markets also have potential and may be inspired to allow more tourists in once they witness the success of their neighbours (Kearns, 2011). The compelling need to diversify and open up the countries of the Middle East to tourism certainly motivates rapid change in these countries, and the new attitude toward tourism as a viable and desirable revenue stream for the countries will serve the business goals of UAE Tours.
The hotel sector represents another arena of growth that serves the needs of the business owners. “A fast growing hotels sector [will be established] to cater to the growing number of high end tourists and visitors, as well as the National and resident population” (Abu Dhabi Economic Vision 2030, 2009, p. 117). The UAE intends to invest significant amounts of money and energy into the hotel sector to make sure that Abu Dhabi successfully attracts the high end tourist trade. The goal is to for the UAE to “become one of the world’s most attractive places for high-end tourists, while offering new facilities and leisure activities to the Emirate’s permanent residents” (Abu Dhabi Economic Vision 2030, 2009, p. 117).
In order to promote the location and marketing of the GCC countries as a tourist destination, the Abu Dhabi Tourism Authority opened offices in key target tourist markets such as the United Kingdom, Germany, and France (Abu Dhabi Economic Vision 2030, 2009, p. 117). The Abu Dhabi Tourism Authority also intends to open more offices internationally to actively solicit tourists.
In addition, the Abu Dhabi Tourism Authority “is already investing strongly in expanding and upgrading its tourism and cultural offering with significant projects such as the Saadiyat Island Cultural District with its cluster of world renowned museums, cultural and educational institutions” (Abu Dhabi Economic Vision 2030, 2009, p. 117). These endeavors are poised to attract a more high end, larger market of tourism in the coming decade.
Forecast
Recessionary numbers aside, the tourism sector appears to have weathered the economic storm of 2009 and now looks fixed to grow consistently over the next few years. In 2008, the restaurant and hotel sector grew by 15.1 percent; the GDP of the restaurant and hotel sector in 2007 was 12,631 million dirhams. By 2008 that number has risen to 14,533 million dirhams (UAE Yearbook, 2010). In general, the region of the United Arab Emirates benefitted from the increase in oil prices between the years 2007 and 2008, which rose by 35.6 percent (UAE Yearbook, 2010). That said, a movement is afoot within many countries Middle Eastern countries and member states of the Gulf Cooperation Council to reduce their dependence on the oil sector over the next decade, as reserves are waning and the need to diversify the economies into non-oil and non-commodity sectors becomes more pressing with each year. How this helps UAE Tours lies mainly in the development potential for the tourism trade. Many countries within the GCC have developed a mandate to boost the tourism sector significantly. In the United Arab Emirates, this mandate has fueled the development of major tourist destinations such as the Yas Marina Circuit and the Ferrari World Abu Dhabi Theme Park. Abu Dhabi in particular is excellently positioned to “develop cultural tourism to become an important competitor at the regional and global levels” (Mohamad, 2009, n.p.). The push to invest in the cultural and tourism sectors has been well funded and well publicized, and the governments of the United Arab Emirates remain committed to realizing the vision set out by such plans as the Abu Dhabi Economic Vision 2030 (2009).
Abu Dhabi’s strategic plan is to boost the tourism sector significantly over the next half decade. As Mohamad (2009) explains, “the number of tourists is projected to rise to two million in 2012 and three million within five years. The emirate is due to consolidate entertainment tourism to form at least 50 percent of its sector” (n.p.). According to Lawrence Franklin, the head of policy and strategy for the Abu Dhabi Tourism Authority, the city intends to draw “2.3 million hotel guests in 2012” (UAE Interact, 2011, n.p.). The main countries expected to contribute to this target are France, Italy, Germany, the United Kingdom, Saudi Arabia, India, China and Russia (UAE Interact, 2011). Statistics indicates that the number of tourists destined for the Middle East tour capitals in the Gulf countries of Iraq, Palestine, Syria, Jordan, Lebanon, and Egypt will triple by the year 2020 (Mohamad, 2009). According to Mohamad (2009), the current number of tourists will increase from 54 million to a 136 million in under a decade. At present, the aforementioned Gulf countries “receive 60 percent of tourists headed to the Middle East” (Mohamad, 2009, n.p.).
Market Segmentation
Price remains the many indicator of market segmentation, and for UAE Tours, the target market will determine what UAE Tours can offer. In the luxury travel consumer market, the price needs to be premium to maintain the exclusivity and status associated with the offering. The relative affluence of the target market and the main purpose of travel – to discover luxury tours that offer an unparalleled experience of the United Arab Emirates – will influence the luxury travel consumer’s choices. Luxury tour clientele have an expectation of customer service, uniqueness, hotel quality, and lavishness that transcends the traditional lowest price model that describes budget travel customers.
Target Market
This target market will also be well educated, socially conscious, health conscious and will be amenable to paying premium prices for high quality, highly original tours. Other attributes of this market include technological prowess, economic advantage, and typically the presence of several small children under the age of 10. This market will also be comprised of seasoned luxury travelers familiar with other luxury destinations in the world that are the direct competitors of the United Arab Emirates such as Koh Samui, Koh Phangan, Pondicherry, and Costa Navarino. As such expectations will be high and UAE Tours is committed to providing the quintessential luxury experience of Abu Dhabi, Dubai, and the United Arab Emirates at large.
Operational Plan
The luxury travel consumer will book the luxury tours at the same time that he or she books the his or her flight and hotel. Typically, the UAE Tour representative will contact the customer once the tour has been booked via the UAE Tours website or the through one of our partners’ distribution channels. This initial contact will initiate the superior level of customer service that will position UAE Tours immediately as a player in the luxury tour operator competitor landscape. The UAE Tour representative will go over the detail of the tour package, answer all of the customer’s questions, and facilitate any special requests such as child care, dietary restrictions, or mobility needs.
Organizational Chart
Marketing Plan
The marketing objectives of the business owners of UAE Tours consist of developing a robust and resilient luxury tour operator brand consistently over the next five years in the United Arab Emirates. UAE Tours wants nothing less than to become the ultimate luxury tour brand throughout the Middle East. Current and future key tourist destinations in the region will support a healthy luxury tourism market and lead to opportunities for expansion beyond the Middle East.
The decision to position UAE Tours as a luxury tour operator will allow the business owners to operate a relatively small scale endeavor during the first few years while the brand builds and develops. Essentially, the strategy is to keep the product offering rare and exclusive in order to build brand equity.
The luxury tour operator of the future understands that Abu Dhabi and Dubai have successfully positioned themselves as top tier luxury destinations. The clientele of the next five years will continue to represent the luxury and status travel and tourism consumer; thus, UAE Tours is now poised to occupy the role luxury tour operator and offer an original travel and tour experience unprecedented in the United Arab Emirates at this time.
The core market for UAE Tours will be overseas tourists from countries such as Germany, France, the United Kingdom, Belgium, the United States, Canada, Australia, and New Zealand. As such this group will be comprised of luxury tour aficionados with extremely high expectations. These luxury travel and tourism consumers will expect to find the luxury items they purchase in their home countries while on holiday in the countries of the GCC. They will expect to be wowed not only by the lavish scale of the tours UAE Tours organizes, but they will also expect the tours themselves to be extraordinary and life changing.
This target market will also be well educated, socially conscious, health conscious and will be amenable to paying premium prices for high quality, highly original tours. Other attributes of this market include technological prowess, economic advantage, and typically the presence of several small children under the age of 10. This market will also be comprised of seasoned luxury travelers familiar with other luxury destinations in the world that are the direct competitors of the United Arab Emirates such as Koh Samui, Koh Phangan, Pondicherry, and Costa Navarino. As such expectations will be high and UAE Tours is committed to providing the quintessential luxury experience of Abu Dhabi, Dubai, and the United Arab Emirates at large.
Secondary markets for the luxury tours made available by UAE Tours will include the native populations of the GCC to the extent that they develop brand awareness, brand equity and brand loyalty. This may occur through exposure to the primary market, through the web marketing campaign, through word of mouth, or through the business contacts and strategic partnerships UAE Tours intends to cultivate. This secondary market will likely develop over three years, at a slower rate than the primary market; however, this market will likely grow to be as robust as the primary market.
Tertiary markets will be comprised of consumers that find UAE Tours online. These consumers by definition will not necessarily be found in the GCC, nor will they necessarily be luxury consumers per se. However, they will have many of the same qualities as the secondary and primary markets – social consciousness, discretionary income, and education. The difference in this tertiary market is they will likely be empty nesters, older singles and retired couples; typically their children will have left home and they will be financially well off with minimal debt. As such, these tertiary markets may develop an interest in luxury tours as retirement activities and couple’s vacations.
Core Marketing Strategy
The business owners of UAE Tours intend to follow their core marketing strategy to build an exclusive luxury brand tour operator in the United Arab Emirates. The main strategic marketing strategy will be to keep the tour product offerings rare and exclusive in order to develop a solid brand equity over a two to three year span of time. According to UAE Interact (2011), over 1.5 million guests visited one or more of the hotels throughout the United Arab Emirates in 2009. In that same year, the number of guests grew “from 960,000 in 2004 to over 1.5 million in 2009” (UAE Interact, 2011, n.p.). The business owners of UAE Tours have developed key strategic partnerships with event organizations in and around Abu Dhabi and the United Arab Emirates in order to offer comprehensive and unique luxury tour packages to the estimated three million hotel guests that will visit the United Arab Emirates in the next few years from Abu Dhabi’s core luxury target markets from the United Kingdom, the United States, India, Germany, Egypt, France, Saudi Arabia and Italy (UAE Interact, 2011).
The Abu Dhabi Tourist Authority is currently following the plan developed for the next five years to bring “2.7 million hotel guests a year” (UAE Interact, 2011, n.p.). In addition, the United Arab Emirates airline Etihad Airways, which is based in Abu Dhabi, plans to transport “25 million passengers a year by 2020 and expand its network to up to 100 business and leisure destinations” (UAE Interact, 2011, n.p.). Luxury tourism in the United Arab Emirates has already demonstrated its viability. The clear preference for the United Arab Emirates evidenced by recent numbers demonstrates to the business owners that the boom in tourism will only grow, and will attract luxury tour consumers from countries beyond the core markets of the United Kingdom, the United States, Russia, and Europe.
The challenge for the business owners will be to sustain the marketing strategy that carefully targets the core market while remaining attractive to the secondary and tertiary markets.Tourism, particularly luxury tourism, will fuel the economy and serve the United Arab Emirates’ desire to diversify its economy via the creation of innovative private sector opportunities and markets. UAE Tours intends to promote the international standing of the United Arab Emirates and help its solidify its position as an premier luxury destination.
Marketing Mix
Price / Cost
The business owners intend to price the luxury tours that the company UAE Tours produces and operates at premium. This decision contains both practical and strategic elements. From the practical perspective, because luxury tour operators in the Middle East will burgeon in response to the tourism boom generated by the various policies of the governments, the market will crowd quickly, and the business owners will charge a premium price for the unique tour offerings to recoup their initial investment, turn a profit for their investors as soon as possible, and carve out a stable niche without the need for massive infrastructure costs on the front end.
Strategically speaking, the UAE Tours’ brand of premium luxury tours owned and operated locally within Abu Dhabi will ultimately save on marketing costs through the use of the business owners exclusive and international networks to generate revenue. Also, the company will likely attract significant government investment due to its potential for growth in the tourism market and promise to help expand the non-oil sector in the United Arab Emirates.
Promotion / Communications
The business owners will communicate an exclusivity to the brand immediately and position the luxury tours as a luxury product perfect for the international luxury travel consumer’s needs. Celebrity endorsement and strategic event positioning will play a key role in the branding strategy, as the business owners of UAE Tours intend to leverage their partnerships with Yas Island and the Yas Marina Circuit, Think Flash, and the Abu Dhabi Music & Arts Foundation to position UAE Tours as luxury tour brand with unique and exciting tour offerings unprecedented in the current competitor landscape. The UAE Tours business owners also intend to take full advantage of the anticipated boom leading up to the FIFA 2022 World Cup in Qatar. This sport event will necessitate 84,000 rooms in the seven cities that will host the event, and the luxury tour products on offer from UAE Tours will be well positioned to host the luxury guests and cater to their entertainment and adventure needs during their attendance at this world class event (UAE Interact, 2011).
Product / Consumer
Luxury tour consumer demand for the innovative tours that UAE Tours will operate and promote will increase, particularly as the tourism initiatives currently under way as part of the Abu Dhabi 2030 vision (2009) such as Saadiyat Island are completed and generate the world class audience and luxury clientele that form the core markets for UAE Tours. In addition, the burgeoning interest in local arts and culture facilitated by Saadiyat Island will eventually function as a secondary market for the regional population of the United Arab Emirates and the Gulf Cooperative Council member countries.
Placement / Convenience
Tourism in the United Arab Emirates continues to be a priority for most of the governments of the region. Active solicitation of the international luxury market will serve the business goals of UAE Tours and allow the business owners to take full advantage of the positive growth in this sector in recent years and gain access to the high-end tourist market that currently floods the United Arab Emirates on an annual basis. In order to effectively position the product as a luxury brand, the business owners will employ strategic placement of the product advertising in the high-end luxury hotel chains operating in the region.
The business owners will also establish international relationships with competitor hotel chains that seek to enter the luxury markets of the United Arab Emirates over the next 10 to 15 years. These relationships will develop over several years and they are designed to facilitate the placement of the product in the marketing of the luxury hotel chains that will be built in the region over the coming years. In order to reach the target market, the business owners will focus the bulk of their sales associates and initiatives on the exclusive five star hotels in the United Arab Emirates and Abu Dhabi in order to have the luxury product sold through these distributors.
Web Marketing Strategy
The business owners intend to operate an official website to facilitate e-commerce of the luxury tour products. The official website will also help the business owners to build brand awareness. The business owners intend to leverage the Internet to promote the luxury brand and to open up the availability of the product to other consumers in the region and internationally, especially those who do not inhabit Abu Dhabi or any of the other major urban centres in the United Arab Emirates such as Dubai.
The website will also facilitate a hosting component for strategic partners of UAE Tours and facilitate cross-promotion of events and products among our partners. The business owners of UAE Tours intend to keep an active video blog of the events, parties, and launches that our partners produce. These video documents will have high production values that communicate the lavish and exclusive nature of the United Arab Emirates to the core market online. These videos will serve as effective marketing tools and they also contribute to the viral network that UAE Tours intends to build over the first year and will serve as a hub for the online marketing strategy overall.
Social Media Marketing Strategy
The business owners of UAE Tours will set up a Facebook similar to other luxury tour operators in the region. The difference between the Facebook page of the UAE Tours and our competitors Facebook pages is that UAR Tours will function as an interactive portal for luxury clients and will include interviews with the business owners, video testimonials from past luxury tour clients, and the video event promotional material generated by UAE Tours’ strategic partners. The Facebook page will allow the business owners to establish an interactive portal with international clients and generate impressions globally immediately and with high viral capability. The Facebook page for UAE Tours will also operate as a forum for customer loyalty building and brand awareness development.
The main goal of the business owners will be develop the brand via the power of word of mouth from its primary market. For example, a family or a couple of luxury tourists that arrive from Europe, the United States, the United Kingdom, India, Germany, or Russia encounter the unique tour offering at the hotel where they are staying in the United Arab Emirates. The quality of the tour and the comprehensive nature of the United Arab Emirates experience created by UAE Tours impresses them so much that they look up the brand online either when they return home or when they are still on vacation in the United Arab Emirates. From there, the primary market spreads awareness of the luxury tour product offering from UAE Tours via its informal viral networks, including email, Facebook and Twitter. From there, the UAE Tours brand begins to develop momentum through recommendations, online impressions, and the sharing of endorsements informally and virally.
Promotion
The UAE Tours business owners will follow this promotional itinerary over the first six month phase of marketing action.
SWOT Analysis
The owners of UAE Tours conducted an extensive and thorough analysis of the strengths, weaknesses, opportunities, and threats that will likely have an impact upon this business venture in the coming months and years. The following SWOT analysis provides detail for areas of concern for owners and investors as well as areas that represent significant growth potential.
Strengths
The key strengths of the UAE Tours business venture relate to the current economic climate of the United Arab Emirates, as well as the attitude of the governing bodies and policy makers toward tourism in general. The UAE Tours business venture occurs at a favorable time, when these economies are looking to diversify and reduce some of their reliance on oil-based revenue. In addition, these countries have significant amounts of wealth that they are willing to invest in the infrastructure necessary to build a feasible tourist industry. The financial backing, commitment, and technological know-how have all converged to make this an ideal time to launch UAE Tours in the United Arab Emirates.
Weaknesses
The owners of UAE Tours identified tremendous competition as the main weakness of the business endeavor. Lack of brand awareness in the initial stages of the business launch will see UAE Tours lose some market share to competitors with a more established brand name. Other weaknesses identified include the fact that the United Arab Emirates luxury market will flood quickly as other start ups attempt to take advantage of the favourable economic landscape of the United Arab Emirates luxury tourism. In addition, luxury tour operators will tend to headquarter themselves in Abu Dubai, so UAE Tours will need to work hard to secure and maintain a niche clientele in a busy and competitive environment. Finally, although the luxury tourist for the most part escaped the recession, the weakened currencies from high end tourists in Europe, the United Kingdom and the United States continues in 2011 and will likely curtail luxury tour spending.
Opportunities
Government incentives for development in the non-oil sector in general and tourism in particular creates the optimal development environment for UAE Tours. The luxury tourist boom focused around several Middle East events ramping up for the next decade such as the FIFA 2022 World Cup and the completion of the Saadiyat Island complex will generate more interest in the United Arab Emirates as a key luxury destination. In addition, large numbers of expat workers in Abu Dubai and vacationing family members and friends represent significant additions to the secondary and tertiary markets for the luxury tour products.
Threats
The main threat for the business venture that the business owners of UAE Tours foresee is the political instability of the Middle East and continued protests in Middle Eastern countries. While the high GDP per capita tends to isolate the United Arab Emirates from these protests and from the political instability of other countries in the Middle East, the effect of the protest communicates a threat to potential clients who may feel the region is not safe, particularly if they have children. The perceived lack of safety of the United Arab Emirates as a luxury destination may cause UAE Tours to lose some business to competitors outside of the Middle East that luxury consumers perceive to be more politically stable.
Service Development Strategy and Customer Service
The luxury tour guests will be assigned their own personal customer service representative to handle all of their needs while on the tour. The role will function as a personal assistant for the luxury tour clientele.
UAE Tours will leverage the value that luxury tour consumers place on superior customer service to strengthen its position as a leading edge luxury tour operator in the United Arab Emirates.
Pricing
The principal goal of UAE Tours will be to position itself as a luxury tour brand and price its tour offerings at a premium to attract the exclusive luxury tour clients from Europe, India, the United Kingdon, the United States, Russia, and China. This represents the main strategic direction of the brand. UAE Tours also intends to serve the needs of the local population, and will also provide tour options and packages at a competitive rate to local residents, schools, and corporations in the United Arab Emirates.
Distribution
Since UAE Tours will have developed numerous partnerships with the hotels, airlines, and entertainment and leisure companies outlined above, the main distribution channels and networks will occur through these partners. As UAE Tours establishes its brand, other partners outside of the Middle East will be researched and strategic partnerships developed.
Risk Assessment
Like any business involved in the travel and tourism industry, another recession could have a serious impact on the bottom line of UAE Tours. Luxury tourism depends on the discretionary income of luxury travel consumers, which if it is curtailed again in the near future, will lead to loss of revenue for UAE Tours. The business owners of UAE Tours will build and maintain contingency plans as well as contingency funds to create some financial insulation.
Financial Plan
Pro Forma Income Statement One-year Summary
Conclusion
UAE Tours is poised to offer an original travel and tour experience unprecedented in the United Arab Emirates at this time. The business owners of UAE Tours are confident that the business strikes a balance between the domestic Middle Eastern travel market, the international tourist and adventure tourist market, and destination operators currently at work in the capital and second largest metropolitan centre in the United Arab Emirates, Abu Dhabi.
The strategic location of the UAE Tours head office in Abu Dhabi allows the company to operate in the hub of activity of the United Arab Emirates that will witness tremendous growth in the non-oil private tourism sector in the next 20 years, and the goal of the company’s executives is to provide a unique, personal, and exhilarating experience for tourists visiting the UAE, an experience that until this time remains unavailable in Middle Eastern tourism operators and tour companies. The government support for economic development of the non-oil sector over the next 30 years as oil reserves decline will also help to position UAE Tours favorably with regard to funding initiatives and business tax incentives. The owners of UAE Tours remain confident that the venture has every chance of success.
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