DUBAI & SINGAPORE E-PORTFOLIO INTERNATIONAL STUDY PROGRAM 2015
FROM HUB TO TOURIST DESTINATION THE AVIATION BASED TRANSFORMATION OF DUBAI AND SINGAPORE
DISCUSS CRITICALLY THE DEVELOPMENT OF BOTH DESTINATIONS
Master Program: MCI – Management Center Innsbruck Entrepreneurship & Tourism Specialization in Strategic Management Group: Schumpeter
Author: Christiane Pohler Student ID Number: 1410487047
20th of November, 2015
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TABLE OF CONTENTS
1. INTEGRATED APPROACH TO AVIATION STRATEGY ................... 1
2. DUBAI: AVIATION BASED TRANSFORMATION.............................. 2
3. SINGAPORE: AVIATION BASED TRANSFORMATION.................... 3
4. CONCLUSION AND OUTLOOK ......................................................... 4
1.
INTEGRATED APPROACH TO AVIATION STRATEGY
For Dubai and Singapore tourism is a key resource of income generation. Though both cities have different cultural and historical assets, they pursue the same integrated approach to aviation strategy. Due to this approach both cities move from a hub to a destination. Lohmann et al. (2009) evaluate that such destinations, which turned from hubs to destinations, require a network of three critical institutions: Airline Airport National government
Fig. 1: Integrated approach to aviation strategy (Source, Lohmann et al., 2009)
Furthermore, their geographic location, their stability in political and administrative conditions, their long-term oriented planning and first mover advantage have the potential to result in significant economic benefits (Lohmann et al., 2009).
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2.
DUBAI: AVIATION BASED TRANSFORMATION
Dubai is one of the fastest growing cities in the world. This exponential development is based on the Sheikh´s visionary leadership and Dubai´s disposedness to a moderate dictatorial government. This absence of a fully democratic system results in continuity of governance, fast realization of projects and simple structures. (Balakrishnan, 2008)
Emirate Airline (EK) was established as counterpart to Gulf Air and is well-known for its aggressive expansion strategy. Furthermore, they have quite low operating costs and offer nearly exclusively long-haul connections which brings the advantage of a low-complexity fleet structure. In addition, Emirate Airline is not a member of any global airline alliance and claim to be more successful without having the complexity of being in an alliance. Moreover, it is the only carrier that serves all continents with its own aircraft. (Lohmann et al., 2009 and O´Connell, 2011)
Concerning Dubai International Airport they established a strong market position, above all through providing a reliable and comprehensive service quality as well as through developing non-aeronautic businesses (e.g. duty free).
To sum up, in my opinion Dubai provides a tremendous rate of enthusiasm as well as a clear vision in supporting the same goal: making Dubai to a world leading tourist destination
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3.
SINGAPORE: AVIATION BASED TRANSFORMATION
Dubai´s counterpart of aviation based transformation is Singapore. The governmental structure of Singapore reveals that it is officially called ‘Republic’ but is occasionally referred to as a democratic dictatorship. Hence, this centralised structure supports fast decision making processes and ensures governmental support concerning investments. (Bowen, 2000 and Lohmann et al., 2009)
Singapore Airline (SIA) benefits from increased travel demand of its resident nationals from neighbouring countries as well as from international business travel. The Airline focuses on long-haul routes and captures monopoly positions in several important markets. Compared to Dubai, Singapore benefits as well from low operating costs and provides its customers high quality standards by using latest technology and excellent service. (Lohmann et al., 2009) In contrast to Emirate airline, SIA is part of ‘Star Alliance’ an together with its ‘Star Alliance Partners’ accounts for more than 40% of all flights offered at Singapore Changi Airport. At Changi Airport more than half of their revenue is generated by non-aeronautical businesses indicating the shift to more consumer-based tourism. Nowadays, Changi Airport is defined as a complete ‘destination in itself’. (Lohmann et al., 2009)
After experiencing both airports I would assert that Changi Airport set up more attractions and commercial activities than Dubai International Airport (e.g. installation of recreation zones, transit hotels, themed gardens, multi-media entertainment and so on). Page 3
4.
CONCLUSION AND OUTLOOK
In order to understand the nature and dynamics of these tourism destination hubs a comprehensive knowledge about the integrated approach to their aviation strategy is needed. Within both destinations, Dubai and Singapore, a strong nodal connectivity exists among their airline, their airport and their government.
Nevertheless some future challenges, concerning both tourism destination hubs, consist and are presented briefly as follows:
handling of the increasing carrying capacity
although both destinations enjoy first mover advantages – considering other emerging rivals is necessary (e.g. Kuala Lumpur, Bangkok, Etihad and Qatar Airways)
fast development leads to an inexorably growth sustainable growth
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LIST OF REFERENCES
Literature
Balakrishnan, M.S. (2008): Dubai – a star in the east. A case study in strategic destination branding, Journal of Place Management and Development, 1 (1), p. 62-91
Bowen, J. (2000): Airline hubs in Southeast Asia: national economic development and nodal accessibility. Journal of Transport Geography, 8 (1), p. 25-41
Lohmann, G. / Albers, A. / Koch, B. / Pavlovich, K. (2009): From hub to tourist information – An explorative study of Singapore and Dubai´s aviation-based transformation, Journal of Air Transport Management, 15 (1), p. 205-211
O’Connell, J.F. (2011): The rise of the Arabian Gulf carriers: An insight into the business model of Emirates Airline, Journal of Air Transport Management, 17 (6), p. 339-346
Presentations
DTCM, Dubai Tourism and Commerce Marketing (10, 2015) Emirates Airlines, Samer Alhaider (10, 2015) Ngee Ann Polytechnic University, Elaine Cheng (10, 2015) Singapore Tourism Board, GB Srithar (10, 2015)