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Contemporary issues on Travel and Tourism

Contemporary
Issues on Travel and
Tourism

(c) 2014

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Contemporary issues on Travel and Tourism

TABLE OF CONTENT

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Contemporary issues on Travel and Tourism

1.0 Introduction
Tourism is both a beneficiary and victim of several contemporary trends in the world ranging
from political, economical, social to technological changes, likewise, travel and tourism can
as well be seeing to have impact on changes on these trends like climatical changes to which
tourism can be seen to be a vector.
In today’s world where unexpected changes are constant, it is essential as an operator in the
industry to have good understanding of various contemporary factors that could impact on
tourist destinations as to take a disciplined and analytical approach to the marketing and
presentation of the destination to consumers.
Despite several shocks and occurrences all over in the world (terrorism, outbreaks, natural
disaster e.t.c) over the last three decades, the tourism has been able to sustain growth as in
2010 by the World Travel and Tourism Council (WTTC) that “the travel and tourism
industry’s percentage of world gross domestic product was 9.4%, the industry accounts for
9.2% of total investment in the World and the supported 235 million jobs (8.1% of total world
employment) in the last 30 years (WTTC, 2010).

1.0.1 Dubai as a Tourist Destination

Dubai has gained so much global attention and development in recent years, however, the
city culturally is an Islamic state and the official language of Dubai people is Arabic, the city
is part of the United Arab Emirates (UAE) which comprise of seven emirates; Abu Dhabi,
Ajman, Fujairah, Ras Al Khaimah, Saarjah, Umm Al Quwain, and Dubai with Dubai as the
second largest after Abu Dhabi (Dubai Explorer, 2004). In the 18 th century, the region was a
British colony until 1971 when the UAE were formed.
Dubai will be considered in investigating the contemporary factors that impact on tourism
and its destination due to its being one of the fastest growing cities in the world, “a place
where a golden future emerges from windswept sand dunes and barren soil; a place where the
present encapsulates the future as the city increasingly encapsulates the desert” as noted by
Smith (2012)
Also with is “strategic location at the centre of the earth and between the three great
continents of Europe, Asia and Africa, Dubai is an ideal option for establishing a new

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business, relocating your regional headquarter, open a new branch or become part of the new
dynamic clusters that are the engines driving Dubai towards rapidly becoming a knowledge
economy” (dubai, 2014).
It is also noticeable that the government of Dubai accentuates growth and development at a
very rapid pace from just a trading centre few decades ago to a very flamboyant, entertaining
and ostentatious place that behold every eyes in the world which further make it a destination
everyone want to visit.

1.0.2 Egypt as an alternative destination to Dubai

Egypt is a North African country that also bordered the western part of the Asia continent,
one of the reasons it is mostly regarded as Middle East nation. Egypt is known as the origin
of civilization which was once world power with its wealth of knowledge and civilisation
(SIS, 2011).

Egypt is one of the oldest tourist destinations around the world possessing over one-third of
the ancient monuments, also the country’s archaeological and cultural status and possession
tend to attract visitors to country to experience the beauty of the past.

However despite the booming tourism business of Egypt, conflicts in management of the
ancient and archaeological monuments and the civil unrest have greatly impact on the
industry, tourism is really dwindling in Egypt at present due to these factors, nevertheless, the
place still remain a very powerful contention in the tourism industry due the high presence of
archaeological sites, extra ordinary ancient architectural and ancient structure and other
heritage attraction that dated as far back as 700oyears ago (Boniface and Cooper, 2001).

1.0.3 Attractions in Egypt

Egypt is a land full of history with so many amazing attractions to select from among which
are; Giza(This three magnificent pyramids and the renowned Sphinx), Abu Simbel (this the
incredible array of ancient monuments, the famous of which is the “two massive Temples of
Ramesses II”), Cairo Museum of Egyptian Antiquities (this museum holds over 100,000 of
monuments), Dendera (this the ancient temple dating back to first century a still well
preserved in its original structure) and Underground Library of Alexandria.

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1.0.4 Background of Company to consider fro Task 4 (TUI Travels)


TUI is one of the world leading international leisure planning company with operations in
more than 180 countries globally serving an average of 30 million people a year. The
company was founded in the mid 19990s when Preussag AG, a German company went
through diversification by leaving its smelting and mining activities and diversified into
tourism industry. The company acquired “the package holiday leader TUI and Hapag Lloyd
AG, the group was renamed to TUI in 2002 after the completion of Thomson Travel group
takeover and so many other tour operators across Europe.
The company headquarters is in crawly, in UK and the company can boast of over 72,000
employees and over €759 million revenue.

TASK ONE
1.1 Characteristics of Dubai and Egypt as Tourist Destinations

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The tourism environment represents the mix of the various factors and forces around a tourist
and which appear to be best analogy to compare two tourism destination to understand the
variations in their environments and what make them attractive.
Due to the complexity of the tourism industry, analysing the environment will help in
clarifying the components of the two destinations and PEST ( political, environmental, social
and technological) analysis will be given the justification.,

1.1.1 PEST analysis of Dubai


Pest analysis will be used to focus on the political, economical, socio-cultural and
technological factors as it affects Dubai as a tourist destination;
Political: Dubai is one of the 7 emirates of the UAE with stable political governance, the
political framework of the government encourages tourism through its department of tourism
and commerce marketing, and substantial investment to develop Dubai as tourism
destination. Despite being an Arab country with known high level of restrictions to what
foreigners can do on their land to feel at home, comparatively, the political situation of Dubai
present it as a liberal and cosmopolitan society with very low level of civil unrest and crime
rates are very minimal. The government also have a clearly defined tourism agenda (Trade
and Industry, 1990; Middle East Economic Digest, 1995), to render it a pillar of the economy
as noted by Crookston (1998).

Economical: With UAE being one of the world largest Oil producer and the stability in their
political status has greatly helped in making Dubai a major hub for businesses and
investors. Also, its location and free market policy further help in creating stability in
the economic status which makes it welcoming for foreign investors. (Govers & Go,
2005).
The high GDP and very low foreign debt make the environment conducive for tourism
activities and likewise encouraging for the industry investors to be confident of making
suitable progress and development.

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Social: The social-cultural factors refer to the customs, culture, belief, religion and
demographic variables such as age, gender, income and education level of the people.
(Huang, 2008), according to the DTCM (2011) statistics, Dubai population is 2,065,636
with 80% of expatriate’s population. It has very low or no crime rate record with over
99 percent of the citizens being comfortable with the governance and their policies. As
a Muslim city, eating of pork is forbidden and they strictly follow the Islamic ethics
(Sharia), though they relatively accommodate all other religions practices due to the
high percentage of expatriates in the City. The level of illiteracy in Dubai is just 7%
which make the city one of the “fastest growing cities in the world” (DTCM, 2011).
Technological: UAE government has invested hugely in technology and infrastructures in the
last 2 decades, the economy and the free market has greatly contributed to
technological attractions to Dubai. Tourists are assured of memorable experience with
up to date technological experience has can be found in any developed country.
With the recent installation of “automatic fare system, route display, destination display
system, electronic taximeters and complete management systems with one stop information
centre” has further contributed to making life easy for tourists to commute without troubles in
the city (OSIC,2014).

1.1.2 PEST Analysis of Egypt

Political

The political situation in Egypt is very unsettle since the hoisting of the president Hosni
Mubarak in 2011 after 30 years of ruling has really affected the political status quo of the
country and yet to get over it. Civil disturbances are a common and regular occurrence in
Egypt and the current government is yet to get a proper grip on happenings to curb the unrest.

Furthermore, the political situation in the Middle East is such an unstable one, with war
raging in Palestine, Syria, Iran, Iraq and the terrorism actions of ISIS and Al Qaeda. The
threat of terrorism in Egypt is high, the Foreign and Commonwealth Office (FCO) , UK
advised on 3rd of December, 2014 that due to “ to significant increase in criminal activity and
continued terrorist attacks on police and security forces that have resulted in deaths” , British
citizens are advised against visiting the area(GovUK, 2014).

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Economical

Egypt’s is largely covered by desert but highly fertile with the presence of river Nile and
delta.

Egypt’s natural resources includes “ petroleum, natural gas, iron ore, phosphates, manganese,
limestone, gypsum, talc, asbestos, lead, zinc, rice, cotton , beans, onion and other Agricultural
products. The country had a booming “food processing, textiles, chemical, petrochemicals,
construction, light manufacturing, iron and steel products industries with one of the largest
tourism industry in the world. The economy of the country was really boosting and healthy
till 2011 when the civil war for the removal president Hosni Mubarak began, the GDP before
the war was rising at 5% annually but has terribly fall since 2011, the war destroyed
businesses and international investment, the country is yet to regain his economy and
businesses are still being greatly affected.

Social

Egypt is an Arab country and the official language is Arabic, like most country that has
recently experienced unrest, majority of the people are living extremely under a poor
condition. Since the growth of the economy has stopped, poverty and crime has increased in
the country. 90% of Egyptian is Muslim and even before the 2011 civil unrest, one of the
major problems of Egypt is poverty, slums were growing, crimes at high level, violence and
religious conflicts are regular occurrences. The civil unrest has made things to get worse, a
report by United Nations Development Programme in 2013 stated that foreign investors are
wary to do business in the country.

Technology

Egypt as an ancient nation accredited with civilization and scientific development has
tremendous development in sciences and technology, in fact the ICT (Information
Communication Technology) sector contributed over 15% to the economy before the civil
war and growing at a rapid rate of 5.8 %.

Before the political truncation in 2011, series of policies were in place to attract foreign
investment in IT outsourcing and computer hardware sales “was projected at US$821mn in
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2010 and are forecast to reach around US$1.3bn in 2014” which unfortunately was truncated
by the civil war. However, Egypt still remains one of the technologically advanced nations in
the world.

1.2 Developing Issues around the Destinations


1.2.1 Terrorism and Middle East Unrest
In recent times, many middle east countries like Egypt's problems, political strife in Lebanon,
Yemen, Tunisia and the ongoing Syria political unrest , ever raging war in Palestine and ISIS
activities in Iran, Iraq, turkey who all happen to be neighbors to UAE has generated wariness
about the region. John Strickland, a London-based aviation consultant, said: "Foreign tourists
look at the Middle East as one entity and they will avoid traveling to an area they consider
unstable."
1.2.2 Cultural Impacts
As Muslim nations with a strict Islamic ethics, tourist from other regions of the world still
find them hostile, particularly in Dubai where “cultural misdemeanours like holding hands in
public, swearing, staring at women or wearing inappropriate clothing” is frown at or drinking
in “public or being drunk in public, non-Muslims are expected to eat and drink in screened-
off areas during Ramadan, respectful clothing is a code and Men should wear a T-shirt or shirt
at all times”” (Dubai, 2014).
1.2.3 Health and Safety Issues in Dubai
As reported by New York Times newspaper in June 2014, the purification of seawater to feed
taps and fountains is raising salinity levels. And despite sitting on vast oil reserves, the region
is running out of energy sources to support its acquired lifestyle through developments”.
The country requires a very high level of energy for waste treatment and providing fresh
water which the UAE Government are finding very difficult to handle.
Growth has been so intense and enormous in Dubai and this has subsequently led to terrible
impact on the ecology and environmental structures of the city(Alex, 2012).

1.3 Dubai vs Egypt as a Tourist Destination

The environmental analysis of the two destinations clearly showed the strength and
weaknesses of the two destinations, Egypt offered history and ancient features while Dubai
offers the breath of modern development, they both have similar topographical and
challenging issues around their tourism industry but the civil war in Egypt gave the Dubai a

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edge due to safety of tourists and minimum concern of treat to their life. The economical
status of Egypt has also increased crime level considerably while crime in Dubai is at zero
level.

Furthermore, terrorism threat in Egypt is more pronounced and scaring in relation to Dubai
despite the two of them being an Arab nation and in the Middle East.

2.0 TASK 2

2.1 Emerging Trends in Tourism Products and Attractions offered by Dubai with
visitors statistics over the years

The IMF predicts global Gross Domestic Product “growth of 3.4% for 2014 with an increase
of over 3% in 2013, China, India and South East Asian Nations are considered as key drivers
to this growth”((WTM, 2014). Travel and tourism continues to grow globally, with traffic of
tourist setting a record of 1.2 billion in 2013, a margin of 6% to 2012 and with another
forecast of 5% estimated increase in 2014.
The trend in tourism differ from one location to the other depending on the environmental
situations, as noted by WTM, creative tourism and Conspicuous leisure are becoming a trend
in south eastern Asian country like Dubai and Qatar.

1. Creative Tourism

Creative tourism is that ‘Tourism that offers visitors a creative pursuit e.g. arts, crafts etc.
with the offer of high quality accommodation, connect with local environment and distinctive
destination (Campbell, 2013).’ It is now a known fact that tourists are developing growing
desire to be connected with their tourist location, feel the local communities, learn about
history and see the demonstration of sciences and technology.

Therefore, to remain attractive to visitors, tourism inclined destination like Dubai are also
developing tourist attraction that takes into consideration the new emerging trends in the
industry.

2. Conspicuous Leisure

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Conspicuous leisure is a trend of tourism that “signals social status through consumption of
experience rather than through consumer goods” (Campbell, 2013).

This trend is being fostered with tourists “unique experiences, and the impact of social media
through sharing of holiday pictures have made the trend popular.

This trended is been funded by social currency that only requires having a smart phone,
vacation destination, freedom to work from home, going to exotic locations on holiday .
Dubai as one of such destination recognises this trend and their tourism activities in recent
age has greatly taken this into consideration.

2.1.1 Influences of rend on the Tourist Attraction

Dubai as tourism location that is aiming to maintain a status quo of being one of the best
locations in the world recognises this trends and its impact on their objective, their tourism
attraction were designed to meet these trends, particularly the creative and conspicuous trends
of this tourism age.

Dubai is home to many impressive buildings, extraordinary landmarks, and comprehensive


events, all situated in a discourse ascribing value to uniqueness of the city.

Dubai was purposely ‘constructed’ to meet emerging trends in travel and tourism as to attract
tourists from around the world, become a world-famous tourist destination and offer a trading
hub that appeal to tourists and investors “(Alex, 2012).

2.2 The Product to admit the trend

Various products in Dubai have been developed to meet the trends in the industry, among
which are;

2.2.1 Burj Al Arab and Burj Dubai

Burj Al Arab and Burj Dubai are a tall building that represents and draws attention to Dubai
as sight to behold in an increasingly global world. Burj Al Arab “means the Arab tower,
whereas Burj Dubai means the Dubai tower, indicating their status as symbols of Dubai and
the Arab world as such” As a product. Burj Al Arab incorporate the city past in its present,
the structure of the hotel represents a “dhow; a traditional Arabian trade vessel, thus, referring

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to Dubai’s earlier status as a commercial town using the seaways”. The Burj Al Arab also has
the reputation of being the only 7 star hotels, designed to resemble a billowing sail with a
height of 321 metres.

2.2.2 Dubailand
Dubailand is an entertainment park that covers 278 km of land, it includes ““theme parks,
eco-tourism projects, shopping malls, restaurants and residential units”.
DTCM in describing this attraction “A shopaholic’s delight, the Pavilions are where
craftsmen and tradesmen of the world come together to display and sell their wares. The most
unique element of this attraction also known as Global Village is the pavilions where visitors
can buy merchandise of countries around the world without actually travelling there”.

It is also an avenue to travel round the world, collecting souvenirs and artefacts, and learn
about scientific advances Islamic scholars have made over the centuries.” It’s where you not
only see your past, but reach out and touch it (Dubai, 2014). Dubailand attractions also
indulge visitors with “thrilling rides, games and firework displays that will make tourist
experience a world class excitement.

2.2.3 Other Attractions


Dubai has “one international airport, 2 seaports, specialised free zones, several industrial
areas with 387 operating hotels with 53,828 number of rooms” (DTCM, 2014), the city can
also boast of highest numbers of “stories building in the world, tallest service elevators in the
world and the tallest free standing building in the world” (DTCM, 2014).

Burj Khalifa is also a product of attraction for its reputation as the world's tallest tower isan
amazing feat of engineering and Dubai Fountains.

2.2.4 Travel and Tourism Trends influence

Recognition of the changing trends in Tourism has placed Dubai in a better position for
visitors because their products offered the creative and conspicuous need of the visitors as
seen in the products described above.

Between 2002 and 2012, the number of tourist and holiday maker to Dubai rose from 4.7
million people 10 million and 16million in 2013. This is due to the city being one of most

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enviable cities in the world in terms of leisure and infrastructure abound with “world-class
shopping malls, waterparks, beaches and hotels, all of which have allowed the city to capture
year-on-year tourism growth and make it one of the most attractive destinations in the world”
(Malaker, 2012).

The World Travel Market in their tourism trends research came up with the statistics shown in
the graph below,

Fig 1: Statistical representation of Trend changes influence in Middle East (Source: WTM,
2014).

The number of visitors rose by 4.4% in 2013, income grew by 10.9% and the economy also
grew by more than 8.1 per cent in 2013 making UAE the country with biggest GDP increase
in 2013.

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Fig 2: Hotel Occupancy Data for 2001 to 2010 (Source from Slide share, 2014)

Fig 3: Airport traffic btw 2006 to 2011 (Source from Slide share, 2014).

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Fig 4: Breakdown of Dubai tourist traffic btw 2002 and 2013 (Source from slides here, 2014).

All the above representation also how meeting the new tourism trends needs have contributed
to the econmy of UAE I the last few years.

3.0 TASK THREE


3.1 Background and Operations Strategy Of The Chosen Organisation

3.1.2 TUI’S Operations Strategy:


“TUI’s strategic goal is to create superior shareholder value by being a global leading leisure
travel group providing customers with a wide choice of differentiated and flexible travel
experiences to meet their changing needs. TUI’s five strategic priorities for sustainable
development are Embedding, Climate Change, Destinations, Our People and Our Customers”
(TUI, 2014).
Since 2002, in order to pursue this strategic focus, the company focuses on price and cost
control, product differentiation and creation of margin quality (Campbell 2002). Their
tourism operations are based on creating unique travel experiences for their patrons as to
achieve a good brand loyalty, competitive advantage and a very high churn rate.
The key element to their tour operations was based on;
1. Their core tourism business expansion
2. Cost efficiency
3. Tourism integration and network development
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4. New trend identification and exploitation


TUI has been able to maintained a good position in the market and pursue the strategic focus
of the group with provision of tourism services that all the various stages of the value chains
from own “travel agencies, hotels, airlines and cruises (Business week 2009) and also with
substantial involvement in “own supplies, buyers and travel services and had become a strong
example of vertical integration” (Business week, 2009).
TUI’s ability and strength to deliver within the tourism industry based on “ability to recover
increases in input costs, their business model flexibility, effective delivery of merger
synergies, and diversity of the Group’s operations” (Smith, 2012). The company through its
vast operation also has a global presence which provides them with wide variety of holiday
services o their consumers.
TUI Travel’s existing shareholder loan amounts to approximately £900 million is the major
drawback for TUI (financial times 2009). The consumers are increasingly holding off on
booking holidays in order to save money in recession. Whereas limited bookings
transparency (growing trend toward short-term travel bookings; uncertain earnings
performance) has also effected the revenue growth of TUI. Another factor is the impact of
seasonality on sustained growth and performance of nature based tourism.
TUI Travels operations was mainly influenced by its global supply chain that helps in
providing all inclusive holiday packages and pre-planned tourist packages for consumers.
They are also able to control cost and prices to offer the best competitive pricing to the
customers by choosing from their chains of suppliers, accommodation and meals from the
most suitable ones to the customers need, the most affordable airlines from its chain of
suppliers. TUI standard package are usually all in one with “transportation (outbound and
inbound), hotel accommodations, airport transfers, insurance, meals and activities.
TUI travels marketing and sales is aim to provide and avail customers with essential
information about their product, it is done basically done through advertisement and online
distribution of its services as to make them available directly to the customer without
intermediaries.
Also, to ease operations, TUI has developed infrastructure to manage their various functions
locally or centrally and to offer products and services in a way that will appeal to a larger set
of customers.

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Also, the company success factors lies in their capabilities which includes over 3,500 travel
agencies in 18 countries, operation in more than 100 destination countries and ability to use
effective segmentation in meeting the needs of various customers with packages designed to
meet their travel needs.
4.0 TASK FOUR
4.1 Effectiveness of TUI Strategies and the Impact on the Travel and Tourism Industry
4.1 Strategies effectiveness and Impact on TUI Business

TUI Travel PLC business strategy is based on integration through acquisition and merger
both vertically and horizontally, these various activities have place the company in a very
stronger position within the tourism industry to compete efficiently and effectively.

Also, travel and tourism consumers’ behaviour in this modern age have been so much
influenced by technology advances and information accessibility, through which they can
easily decide on their choices and tourism needs. The strategy also helped TUI travels to
operate both in the mainstream sectors and specialist sectors of the industry and thereby
placed them in a better position to reach a larger segment of customers.

The integration strategy provided the company with 27 key market sources and presence in
over 180 countries globally (TUI, 2010).

Also, merger and acquisition of some players in the tourism industry like First travels,
Thomson, Jet air, Fritidsresor and TUI travels provide the new company with a strong
management team with a vast experience in the industry, this further enable the company to
increase their market share greatly and profit through the goodwill of those various
companies that make up TUI Travels PLC. After being listed on the London stock exchange
in 2007, the company claimed that “their superior management team, synergy from their
merger acquisition exercises provides them with an effective flexible operations procedure
that can adapt conveniently to changes in trends and happenings in travel and tourism
industry (TUI, 2009).

The integration also increase their customer base which eventually has a great influence on
their profit margin, it also allow them create several niche within their customer base and
attached them to part of the business that can conveniently meet the needs of each niche
(Horner, 2007).

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4.2 TUI response to Trends and Possible outcome of not responding

TUI responded to these various changes in trend of tourisms by the company’s Business
integration strategy by developing a value chain that “ recognizes the environmental changes
and how to maximizes it for profit. (Tummala et al., 2006).

The company was able to create a better level competition that recognizes cultural trends,
creativity and conspicuous through their offers to consumer.

Das & Narasimhan (2000) stated that business integration tends to create a better level of
competition within and reduces non-core processes that waste resources by synchronizing the
“supplier and logistics network”. This shows that through the network system within the
business, they can make series of offers that recognizes these trends and subsequent that
emerges from them from the consumers, the offers would be in form of packages that take the
two trends into perspective.

Failure to comfortably and conveniently have a plan in a place to counter all these strategic
need of travel and tourism trends will leave an organisation on the fence, not being able to
current packages and inability to sell the product they have. Also, will affect the income base
of the company, the goodwill and lower their competitive advantage.

References

 Anholt, Simon. Competitive Identity – The New Brand Management for Nations, Cities and
Regions. Palgrave Macmillan, Hampshire, UK. 2007.

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 Bærenholdt, Jørgen Ole; Haldrup, Michael; Larsen, Jonas & Urry, John. Performing Tourist
Places. Aldershot: Ashgate Publishng Limited, 2003. 1-47.
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William F. (ed.). Global Tourism: The Next Decade. Oxford: Butterworth-Heinemann Ltd.,1994.
 Dubai Explorer 8th Edition, 2004.
 Kotler, Philip, Haider, Donald. H. & Rein, Irving. Marketing places – Attracting Investment,
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New York. 1993. 31.
 Lasserre, P. (2003) Global Strategic Management. Houndmills: Palgrave Macmillan.
 Morgan, Nigel; Pritchard, Annette & Pride, Roger (eds.). Destination branding – creating the
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 Steiner, Carol J. & Reisinger, Yvette. Understanding Existential Authenticity in Annals of Tourism,
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 Theobald, William F. The context, meaning and scope of tourism in Theobald, William F. (ed.).
Global Tourism: The Next Decade. Oxford: Butterworth-Heinemann Ltd., 1994.
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