The Abu Dhabi Tourism and Culture Authority (TCA) is charged with the responsibility of making the city a world-class tourism destination. Abu Dhabi promotes ancient civilization, cultural heritage, and cultural events exhibitions that transform the city into an international cultural destination. The city has a national library, which was established in 1981, that provides an educational tourism destination. Abu Dhabi is built in a desert that encourages ecotourism tours throughout the year. The Zayed port boosts cruise tourism. Al Ain archaeological site provides knowledge about Islamic civilization. A branch of the Louvre museum on Saadiyat Island is hosted by a renovated oil reserve, transforming it into a tourist attraction facility.
However, tourism market in Abu Dhabi is likely to experience challenges in 2017 because of diversion of Arabian visitors to Europe due to the weakness of euro when compared to the dollar currency. Indeed, the target of 4.1 million victors set by the TCA was not achieved in 2015. In 2016, the percentage of Russian visitors has dropped by 17 percent. The demand for fuel declines due to the development of more efficient sources of fuel. Moreover, the conflict between neighboring countries over oil reserves contributes to some insecurity of tourism in Abu Dhabi.
Abu Dhabi tourism industry depends on income from oil to renovate branches of the tourism sector, such as education and sporting, build hotels, and develop new airlines. There existing political instability in most oil-producing destinations results in people shifting to a more stable sources of power, such as solar energy, which leads to low export of oil. Reduction in oil prices affects the economy of Abu Dhabi thereby reducing the income that could have been used to develop the tourism sector. The United States has dominated oil industry even though it does not produce oil. Hence, the amount of oil the US is importing has dropped thereby reducing the value of the ruble and oil prices that affect Russian tourists and visitors from other oil producing countries that come to Abu Dhabi.
Abu Dhabi should increase its investment to more stable economic activities, such as tourism, business, and industries to support the economy when oil prices drop. Expanding the tourism target market will help in reducing the effect caused by the decline of visitors. Moreover, according to Barnard (2014), developing new airlines to different destinations and increasing the number of concurrent events, especially during off-seasons, in Abu Dhabi will improve the number of visitors.
External Environmental Factors
Political factors favor tourism industry in Abu Dhabi. Each of the seven Emirates has an independent government that is responsible for flexible management of the country. The government ensures healthy trade relations globally. However, there exist political factors that cause conflict among neighboring countries concerning the ownership of oil reserves.
Abu Dhabi city has dry climate, dry winter, and hot climate throughout the year that lowers farming productivity in the region. The Gulf ecosystem contains hydrological features that contribute to the overall pleasant marine environment. Abu Dhabi coastal water experience variability in chemical, physical, and biological characteristics. According to Sharpley (2002), the high temperature diverges from 19 degrees Celsius to 35 degrees Celsius, while high evaporation rates result to an increase in salinity. The environment favors tourist activities due to sufficient solar radiations and disruptions that result from rainfall.
Strategic Group Map
The scope of the competitive rivalry regarding location places Abu Dhabi in a strategic position of the tourism sector. Market segmentation helps Abu Dhabi tourism industry to effectively perform in a competitive tourism environment. It also allows Abu Dhabi to divide large consumer flows of the tourism sector into segments based on geographical location, culture, demographics, and behavior.
The economy of Abu Dhabi depends upon the revenue generated from natural resources. Natural gas and petroleum play a significant role in maintaining the tourism industry economy. However, due to the depreciation of fossil fuel and decline in oil prices, emerging sectors of the economy, such as tourism, financial institutions, industries, and business, come in to support the economy. According to Davidson (2009), the gross domestic product of Abu Dhabi rose by nearly $60 billion between 2002 and 2006. The GDP per capita was about $70,000, which by far exceeds the average income in UAE. The GDP of the city was ranked third after Norway and Luxembourg.
Advancements and innovations in technology play a significant role in ensuring a competitive economy in Abu Dhabi. According to United in Knowledge of UAE Vision 2021, research and scientific innovation form sustainability pillars in transforming the economy. Abu Dhabi meets current technological advancements. According to Arif, Gupta, and Williams (2013), the payment system for tours in Abu Dhabi is automated. Tourist workers possess pre-loaded credit cards that reduce financial delays when conducting tourism promotion activities.
Abu Dhabi hosts rich cultural events that educate tourists about the Arab way of life. According to Inhorn and Shrivastav (2010), Abu Dhabi way of life is rooted in the Islamic traditions that create the Islamic genuine hospitality and tolerance. Globalization has enhanced a mix in culture. The locals exhibit a variety of Islamic traditions, such as art on the body. However, there exist differences in the Islamic and Western way of life. For instance, Islamic women dress completely differently from their Western peers.
Driving Force of Abu Dhabi Tourism Industry
Going beyond oil effects motivates Abu Dhabi government to develop additional sectors of the economy, such as tourism. Constant drop in oil prices and fluctuations in currency affect Abu Dhabi economy. Abu Dhabi has become over-reliant on the exploitation of natural resources (Davidson, 2009). Diversification into tourism, financial institutions, industries, and trade helps Abu Dhabi during oil crisis, especially when the price of oil falls immensely. UAE plans to invest $300 billion in new tourism projects and infrastructure to improve tourism sector.
Key Success Factors of Abu Dhabi Tourism Industry
The infrastructure surrounding Abu Dhabi tourism industry boosts the industry. For instance, the development of the airport industry in Abu Dhabi ensures constant traveling of tourists via Abu Dhabi. According to Irish Times (2015), in November 2015, Etihad Airways ordered 86 Boeing. Moreover, the industry is opening new airlines in Morocco, China, and India to update the regions and reach a wider target market for tourism. The Abu Dhabi airlines create a gateway effect and reduce traffic stopovers.
Abu Dhabi Tourism Competitive Environment and the Attractiveness of Tourism Industry in Abu Dhabi
The city has developed extravagant hotels, road network, and entertainment facilities. Moreover, the tourism sector has installed a branch of the Louvre museum on Saadiyat Island. The island facilities have been converted into shopping malls and an art center. The city has constructed the tallest building, biggest shopping malls, cultural centers, sporting venues, environment and archaeological sites to provide all tourist attraction facilities in one place. The UAE take 24th position globally in tourism ranking by welcoming a total of 10 million visitors in 2013. Abu Dhabi is located in the unique environment that ensures dry winter periods that are welcoming for both leisure travelers and entrepreneurs (Inhorn & Shrivastav, 2010). According to Arif, Gupta, and Williams (2013), UAE is ranked first in enabling conducive business environment and providing the infrastructure required for business success. For instance, the total revenue collection from hotels grew by 14 percent when compared to 2013 numbers. Despite the good performance of the industry, it faces completion against Europe due to the weakness of euro against dollar. However, Abu Dhabi targets India, China, Germany, United Kingdom, and Morocco.
Idea Generation and Development
Dominant economic characteristics of Abu Dhabi tourism industry ensure the remarkable success of the industry. Abu Dhabi TCA reported in 2015 that the region recorded 3.49 million tourists. This marks a 25% increase from 2013 numbers, which accounts for 400,000 visitors. Abu Dhabi now targets 3.5 million tourists in 2016. Abu Dhabi expects to increase the number of visitors despite falling oil prices, fluctuating ruble, and rising supply of the available hotels.
Developing new airlines will help Abu Dhabi tourism sector both reach new markets and exploit the already existing ones more thoroughly. Identifying target markets and creating means of transport contribute to promoting awareness of Abu Dhabi tourism industry. According to Arif, Gupta, and Williams, (2013), the United Arab Emirates have broken the record by ordering Boeing 777X. Increasing new airlines capacity enables modern fleets that fly long distances to connect different parts of the world with Abu Dhabi. Introducing direct routes to already existing markets ensures maximum satisfaction of tourists' traveling needs. According to Irish Times (2015), Etihad should start new airlines to new destinations and direct routes towards major markets to boost the tourism industry in Abu Dhabi.
The resources necessary to develop new airlines and direct routes require the addition of new aircrafts, human resources, airport expansion, and building a new airport in a different location. According to Irish Times (2015), the estimated cost of expanding the Etihad Airlines is $500 million. Etihad owns 200 aircrafts and has ordered Airbus A380 and A321s this year.
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The idea ensures sustainable development, because it reduces the dependency of Abu Dhabi on a non-renewable source of fuel. Investing in tourism sector helps Abu Dhabi during declines in oil prices. When oil prices fall, the city will depend on tourism and other sectors of the economy to ensure its sustainability. The four pillars of Abu Dhabi Vision 2030 focus in developing and supporting economic diversification, promoting Arab culture, raising citizens' standards of living, and creating the sustainable Emirates that preserve resources for future generations. Implementing my idea will ensure diversification of tourism sector that will improve the residents' income, promote the heritage of Islamic culture, and shift Abu Dhabi economy to sustainable sources of economic growth rather than depending on non-renewable oil only.
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