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Dubai Sports Tourism- Case Analysis Assignment

Dubai Sports Tourism – Case Analysis Assignment

Executive Summary

The Dubai sports industry is massive. Multiple sporting events are held in Dubai due to its luxurious image, financial abundance, and stable economic environment. It boasts fierce competition existing in a tourist hub and offering services that are somewhat similar. This allows controlling pricing of the hotels and venues as the demands for luxurious packages rises. A large number of sports venues already exist in Dubai catering either to multiple events or few events of a similar nature. Dubai is also famous for its golf course and non-competitive sports venues, though they are not numerous. This industry has a great impact on not only the white collar workers in marketing and travel agencies, but also the manual laborers that are already largely exploited. However, it does not have contingency plans ready for seasonal changes in business, nor does it have much control over the global media image in relation to conceptions concerning terrorism. A strategy designed to overcome such a gap is the inclusion of more events during seasonal falls in business. These events may be both small-scale and extremely large-scale, warranting the building of new venues and the establishing new international sporting events. Significant resources are needed to fulfill these criteria, but the good news is that Dubai seems to be in a position with its profit streaks where projects of such a nature are not only possible but quite readily attainable.

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Sports Tourism- Case Analysis Assignment

The tourism industry may be defined as all that individuals and firms are involved in terms of travelling places and staying at locations that are not a part of their usual environment, either for business, pleasure, or personal reasons. In a city like Dubai, which is a popular tourist destination due to its extravagant infrastructure, luxurious image and emphasis on malls, entertainment, and the industry are enormous and may be divided into several sub-sections that are all profit generating and flourishing (Read, 2014). This essay focuses on the aspects of the sports tourism industry, and the many internal and external factors that influence it.

Discussion

Macro-environment

The PEST-D analysis considers the political, economic, social, and cultural aspects that influence the sports industry it does not exist in a vacuum. In terms of politics, Dubai is relatively stable, although its existence in the Middle East makes some western tourists nervous about travelling given the past situations regarding terrorism. Economically speaking, while Dubai, along with the rest of the world, was negatively affected by the 2008 global financial crisis, it persevered. Now, outside investments show no signs of decreasing, and the currency has been relatively stable. From a social perspective, Dubai is a very fast paced city, expensive to live in, and attracts either very wealthy people for vacations or the ambitious young working population from abroad. Technically, the culture is Arabс with significant influence oа Islam. However, being such a hectic place, environment and mentality are fast paced.

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Porter’s 5-Forces Analysis

Given that Dubai is always looking for investments, it is safe to say that the threat of new competitors is moderate due to the significant amount of investing needed to build a sports facility or venue. There are many competitors with no clear forerunner, so there is considerable competitive rivalry. Considering that, on average, a stadium or a hotel does not have an exclusive deal with any one single tour circuit or travel agency, or vice versa, it is possible to conclude that neither buyer nor seller hold exclusive power, although firms are willing to pay extra for the luxury brand (Morgan et al, 2013). On the other hand, the bargaining power of buyers might become huge due to the high availability of substitutes. The only factors regarding substitution are the types of events in the venues and the prices of tickets.

The above analysis has been summarized in the following Table:

Low

Bargaining Power of Suppliers

Moderate

Threat of Competitors

Threat of New Entrants

High

Threat of Substitutes

Bargaining Power of Suppliers

Driving Forces

The main driving forces of the Dubai sports tourism industry are as follows:

  • Increasing globalization. As the world becomes more interconnected, the possibility of more sporting events and matches being broadcast and the increase in popularity mean that the industry will grow (Kongsamutr, 2010).

  • Economic growth. The greater growth leads to enormous investments that may be used to enhance the sport tourism industry by establishing more tours and events (Deliotte, 2015).

  • Seasonal Changes. Sports are seasonal events as well as the tourism industry. As a result, the amount of tourism dedicated to sports tourism changes depending on the events or the time of year individuals and families choose to go on vacation.

  • Changes in social dimensions. Should sports become out of global trends switch or lose popularity, the industry would shrink as a result.

  • Political orientations. Any political problems, border issues, or unrest would mean that less people are able to travel to Dubai that will cause harm to the sports tourism industry.

  • Government policy changes. Should the government make it difficult to attain passports or ban obtaining a visiting visa for particular nationalities, the lack of tourists would harm the industry.

Strategic Group Map

The first parameter used in this analysis is that of the number of events hosted, while the second parameter is that of the capacity of some main Dubai sports venues. These parameters are chosen to determine the overall popularity of the venues and hence, get an idea of the most important venues in Dubai’s sport tourism industry. A clear forerunner is The Sevens Stadiums with a capacity of 15,000 and hosting 6 events, pertaining to swimming, volleyball, and tennis. Most venues, notable, are aimed towards a specific type of sports event, such as Dubai Tennis Stadium and Dubai World Trade Centre (kickboxing). The seats fluctuate from 5,000 to as much as 60,000 per venue (Deloitte, 2015).

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Key Success Factors

The key success factors of the sports tourism industry are governance, infrastructure, retail, diversification, marketing, quality control, and security. To attain success in the sports tourism industry, a firm must act in accordance with the laws of the government, make sure the venues advertised are not only present but held in accordance with the standard promised. It should also offer differentiation in packages and tour circuits offered catering to a wide range of incomes and parties. One should also make sure that the travel means, venues, and hotels are appropriately safe and secure to avoid any criminal activities or mishaps (Benchabane, 2014).

Industry Profile and Attractiveness

Based on the overall analysis, one can conclude that while the industry is clearly strong and flourishing, and has the economic and political conditions necessary to be stable, it is heavily dependent on the calendar of events in the sporting world and on the global perceptions of the Middle East in general, and a significant change in one of these aspects could heavily disrupt the whole sports tourism industry. However, recent evidence shows no signs of the industry depreciating or decreasing in popularity.

Idea Generation and Development

The largest gap in the industry is, quite clearly, the gap between sporting events where business seems to struggle and travel agencies that experience slow periods. In order to overcome this gap, a firm may either place the focus on recreational sports, or develop programs for small scale competition and events that tourists may still enjoy. The marketing focus should shift from large “cannot-miss” events to such that are simply entertaining, involving, and offering training and inclusion alongside. This would attract the slightly different people. Another strategy is to offer to host more and more events that occur during slow periods. This, of course, would involve the building of a new arena and extensive proposal planning to be able to host the event, not to mention the commercial buildup and actual fulfillment of such a strategy would be very large scale and extravagant (Greenberg & Hughes, 2011).

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Tangible Resources

Financial

  • Dubai provides financial abundance for profitable investments

Physical

  • Emphasis on luxury and infrastructure means physical resources are available

Technological

  • Modern equipment for building as well as for allowing the booking of traveling and sports venue tickets is required.

Organizational

  • Organizational hierarchy should place maximum effort on marketing and consumer relations that are the most important for such an industry.

Intangible Resources

Human

  • Employees should be qualified, loyal and trained to deal with consumers

Innovation and Creativity

  • No real innovation is necessary except the reformulation of creating other venues or offering to host other events

  • Proposal for hosting should be creative, noticeable, and memorable

Reputation

  • Should have the reputation as friendly and professional

  • Should be seen as providing value to consumers for their money spent

Organizational Capabilities

  • Outstanding customer service

  • Ability to attract and retain customers

   
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Estidama Framework (Sustainability and Impact)

Environment. Given that Dubai is already arid desert, the added construction would not lead to any deforestation, though it might cause additional pollution and congestion in an already heavily urban city that contradicts the Abu Dhabi 2030 vision.

Economics. The creation or allowance of new venues or events would provide jobs all around Dubai to both blue and white collar workers in spheres of hosting, construction, marketing, vending, etc. This would be in favor of the Abu Dhabi 2030 vision.

Culture. Some would argue that Dubai’s current culture would become westernized in order to cater for the tourists that mainly come from western nations. This contradicts the Abu Dhabi 2030 vision that is aimed at maintaining Dubai’s culture and values.

Society. There are no significant changes in society. However, the additional sources of work and investment would encourage people to move to Dubai, and the domestic security of jobs would coincide with Abu Dhabi 2030 vision (Baptista Alves, Cerro & Martins, 2010).

Conclusions

This essay provided the analysis of Dubai’s sports sector using the tools of Pest and Porter’s 5 forces. The strategic group map and key success factors have been evaluated. It has been identified that the Dubai sports tourism industry is quite strong and sees no immediate issues to address. However, the industry could be improved applying many methods of improvement that are, though being expensive, able to assure extra profits and overall prosperity to Dubai.

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