Business Implications of Local Development Policies: The Case of Dubai and the Travel Industry

By Di Foggia, Giacomo; Lazzarotti, Valentina | Theoretical and Empirical Researches in Urban Management, February 2013 | Go to article overview

Business Implications of Local Development Policies: The Case of Dubai and the Travel Industry


Di Foggia, Giacomo, Lazzarotti, Valentina, Theoretical and Empirical Researches in Urban Management


1. INTRODUCTION

Participants in international strategic plans which encompass local business development face a difficult challenge: local authority struggle for enhance local attractiveness and foreign investors and operators need to adapt their offer in order to fit and satisfy specific requests by local population. In 2011 the cruise industry has contributed to the European economy for the amount of 36.7 billion euros (+6% compared to 2010). In five years (2006-2011), the sector recorded a growth of 54%.

In this paper we take into consideration the business strategy of European major cruise lines. Namely the decision of establishing new routes based on a rapidly increasing travel hub: Dubai. No wonder that different cruise line itineraries have an effect on cruise ship occupancy rates Lee & Ramdeen (2012). Their study indicates cruise itineraries do have a significant effect on cruise ship occupancy rates. They also stated that cruise line tend to sail the most popular itineraries with their newest and many times largest ships. This is another current issue because of cultural aspect of clients living in the Gulf area. In our research we have reviewed the measures required to fit these clients' needs.

Supported by former research on product innovation (Di Foggia et. al., 2011) one might expect that both adaptations and structural changes are necessary to comply with customers' specific requirements.

We extend this idea in detail and design our research in order to cover many aspects of business development strategy and investigate how the process is undertaken by operators and local authorities alike.

The reminder of this paper is organised as follows: section two introduces service innovation and implication of travel on territories, section three describes the market, section four contains the case study. The paper ends with conclusion.

2. THE IMPACT OF TRAVEL INDUSTRY ON TERRITORIES

A territory can sometimes mean any set of tangible and intangible values, such as population, culture, historical legacy, heritage and urban art, infrastructure, location and any other instrumental ingredient to increase the overall value of individual elements (Kotler, Haider & Rein, 1993). Supporting the development of a territory from the bottom is an essential approach to promote development opportunities and collect instances expressed in terms of individual and collective standpoint from backlog and turn them into feasible and fundable strategic projects. These concept finds its strength in the system of relationships, alliances and partnerships, political and socio-economic support and investment with timely and proactive culture with the development of lines of action.

Economic impact of travelling on territories has been widely investigated by scholars. Focusing on cruise sector, Brida & Zapada (2010) provide an overview of the different impacts of cruise tourism in Costa Rica; the authors consider cruise passenger demographic characteristics, preferences and expenditure behaviours, and compare the expenditures of the average cruise passenger with the average land tourist that visits the country. They raise some concerns as to whether cruise tourism in Costa Rica should be encouraged. As anticipated, the market is evolving rapidly, considering the economic impact we can see slightly different results obtained fifteen years earlier by Dwyer & Forsyth (1996). They argued that cruise tourists are higher yield tourists, spending, on average, much higher amounts per day than other categories of international tourists. Chase & McKee (2003), taking into account the case of Jamaica and agreeing on the constant growth of cruise's business output, investigate the increasing input cost. Archera & Fletcherb (1998) analyse the impact made tourism expenditure in the Seychelles. Diedrich (2010) analyse Belize while Hobson (1993) considers the US cruise line industry. …

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