Essay Sample Factors influencing growth in the Hotel Industry in Dubai

Factors influencing growth in the Hotel Industry in Dubai Between 2000 and 2014: A case of Dubai Marina

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Factors influencing growth in the Hotel Industry in Dubai Between 2000 and 2014: A case of Dubai Marina

Introduction

Tourism in Dubai has shown significant growth since 2003 to 2014. In 2012, according to the Department of Tourism and Commerce Marketing (DTCM), the state attracted 10 million tourists. The department maintained that, in pursuit the Dubai vision 2020 plan, it would attract about 20 million tourists by 2020 (Department of Tourism, 2016). Most of the guests have been sourced from other markets such as United Kingdom, India, Germany, and Saudi Arabia. For example, the growth levels were 8.5% and 11% between 2011-2012 and 2012-2013 respectively. The total room supply in Dubai has also been shown an increasing trend. In 2013, for example, the number of rooms had reached 87,187 while hotel establishment had reached 611 (Government of Dubai, 2015).

The trends in major growth indicators such as guest arrivals and room occupation at night showed persistent increasing trend from the year 2003 to 2012. However, Dubai experienced a decrease in growth in the year 2006 and 2012 and negative growth in 2009. The average length of stay rose up to 3.89 in 2013 from 3.82 in 2012. Passenger arrivals in Dubai also show a persistent increasing trend from the year 2004 to 2013. The cumulative average growth rate of passenger arrivals grew by 15 percent since 2004. There was also a 15.2 percent increase in arrivals at the Dubai International Airport between 2012 and 2013 (Murari, Kamalapurkar, Johns, & French, 2014).

Trends in domestic arrivals of visitors have also shown an upward trend between 2004 and 2012. The numbers are smaller compared to the foreign visitors’ arrivals. The cumulative average growth rate between 2005 and 2012 was 18.5% and 5.8% for domestic and international arrivals respectively. (Murari, Kamalapurkar, Johns, & French, 2014). Economic performance also affects sectors in the economy which contribute to the overall GDP. Tourism and hospitality being part of the sectors will also be affected through the indicators. During the financial slowdown of 2008, for example, Dubai economy reduced in its trading performance. The tourism sector registered the lowest occupancy rate of 71% in 2010 but continued to grow to 77.5% by the end of 2012 (Department of Tourism, 2016). During this economic downturn, leisure demand in Dubai deteriorated due to the low economic performance in the European countries which accounts for a large share of the demand base. 

In view of the efforts made by both private investors and Dubai administration, this study seeks to assess the major influencers of this growing trend by narrowing down to Dubai Marina district. Studying these influencers will therefore be critical in offering reliable information for policy formulation and guiding both foreign and domestic investors in investment decisions. This study will therefore be important in explaining the trends in the hotel industry in Dubai Marina in relation to passenger arrivals, hotel establishments, and total supply of rooms.

This study seeks to assess growth influencers in the hotel industry in Dubai Marina District, which is a canal city built along the Persian Gulf Shoreline. It is situated between Media City and Jebel Ali Port and is further expected to accommodate about 120000 people after development projects are completed. This study therefore has the following sections: introduction, rationale, problem statement, research objectives and research design.

Rationale

This study will seek to ascertain the major influencers of growth in hotel industry in Dubai Marina in Dubai. Knowledge of these influencers will be crucial to policy makers in Dubai as well as investors who will be able to use the findings to reinforce Dubai’s position as a prominent tourism destination in the Middle East. The understanding of the key influencers of growth will also be crucial in facilitating achievement of 20 million targets of guest arrivals by 2020 and making Dubai the leading destination for corporate oriented business (Department of Tourism, 2016). The policy makers in this case will be able to formulate helpful policies that will improve the pace of growth while investors will be able to make informed decisions when it comes to areas they should focus their effort. This study will also be instrumental in policy making during periods of economic downturn like the one experienced in 2008 which saw the occupancy rate decline to 71% (Murari, Kamalapurkar, Johns, & French, 2014). Finally, in relation to contribution in academia, this study will add to the body of literature a great depth of understanding of the key factors that influence growth in Dubai’s hotel industry.

Research problem

Tourism in Dubai has shown significant growth since 2003 to 2014. DTCM maintained that, in pursuit the Dubai vision 2020 plan, it would attract about 20 million tourists by 2020. Total room supply, on the other hand, is expected to increase at a rate of 7.9% by 2017 (Department of Tourism, 2016). However, in light of the emerging cities such as TECOM and Al Barsha and proposed expansion for events, there is still high potential for growth in the hotel industry in Dubai. This study therefore seeks to find out the influencers of growth in hotel industry in Dubai Marina between 2003 and 2014 with a view of providing the guide to improved growth levels, influencing policy formulation, and the private sector investments in the industry.

Research Objectives

Main objective

To find out the influencers of growth in hotel industry in Dubai Marina between 2003 and 2014.

Specific objectives

  1. To assess the effects of security on growth of the hotel industry in Dubai Marina
  2. To establish whether quality hospitality affects growth in the hotel industry in Dubai Marina
  3. To find out the extent to which leisure options affects growth in the hotel industry in Dubai Marina
  4. To find out whether improvement in modern infrastructure affects growth in the hotel industry in Dubai Marina

Research question

  1. What are the effects of security on growth of the hotel industry in Dubai Marina?
  2. Does quality hospitality affect growth in the hotel industry in Dubai Marina?
  3. To what extent does leisure options affect growth in the hotel industry in Dubai Marina?
  4. How does improvement in modern infrastructure affect growth in the hotel industry in Dubai Marina?
  5. What is the effect of socio-economic characteristics of the consumers on the growth of the hotel industry in Dubai Marina?
  6. How does the legal environment affect the growth of the hotel industry in Dubai Marina?
  7. What economic factors have an effect on the Dubai marina’s growth?
  8. How does competition in the hotel industry affect the Dubai Marina?
  9. Does the political environment affect the development in Dubai Marina hotel industry?
  10. What ethical issues play a role in the development of the hotel industry in Dubai Marina?

Research Design

The researcher shall adopt a positivist approach in carrying out this research. In this case, the researcher shall adopt a quantitative method research design where secondary data shall be obtained from different hotel managements and the government of Dubai.

Geographic area

The area of study for this research is in Dubai Marina District. This research will therefore be limited to the hotels within this geographical area.

Sample size and sampling method

This study will adopt a systematic random sampling method. Hotels to be studied in this survey will be given an equal chance of selection. A list of all the 94 hotels in Dubai Marina shall be obtained and numbered appropriately. An Nth value shall be calculated by dividing the total number of hotels by the sample size. The samples with then be picked at the Nth value until the number required is obtained. This method is appropriate because it limits biasness in the sample selection and gives equal chance to all the hotels to participate.

Data collection method

This study will used secondary data. This data has already been collected by the hotels and the government of UAE. This research will rely on already collected data. Data relating to security, quality hospitality, and leisure options will be obtained from records kept by the hotel management. Data on modern infrastructure will be obtained from the local authority. Data on growth will be obtained from the hotel management in form of number of arrivals and hotel bookings for successive periods.

Data analysis

Data will be analyzed using SPSS software. Since the data to be collected will be time series data, it shall be entered into the software manually and analyzed using line graphs. Line graphs in this case will be instrumental in providing a clear view of the time trends of the variables used. A measure of association will also be done between the influencers and the dependent variable, which is growth, using Pearson Rank correlation.

A regression analysis will also be done between the influencers and the dependent variable to determine whether there exists a statistically significant relationship between them. This will be instrumental in ascertaining a causal relationship between the dependent and explanatory variables. Means as a measure of central tendency shall also be calculated to provide average levels of all the variables in the study.

Timeline

The following timeline shall be used until the completion of the project.

Time

Proposal development

February -March 2016

Research planning

March-April 2016

Data Collection

June 2016

Data Analysis

July 2016

Submit draft

August 2016

Discuss conclusions

September 2016

Further draft

October 2016

Final draft

October 2016

Defense

November 2016

References

Department of Tourism. (2016, March 2). Tourism Vision 2020. Retrieved from Dubai Tourism: http://www.visitdubai.com/en/department-of-tourism/about-dtcm/tourism-vision-2020

Government of Dubai. (2015). Tourism. Retrieved from Dubai Statistics Center: https://www.dsc.gov.ae/en-us/Themes/Pages/Tourism.aspx?Theme=30

Murari, S., Kamalapurkar, R., Johns, J., & French, A. (2014). Hotel Intelligence Dubai. Dubai: Hotel and Hospitality Group.

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