Wednesday, January 19, 2011

PEST Analysis of MICE industry in Middle East

                                fig: Abu Dhabi Ferrari theme park( source:                                                                  
In the past two decades one of the regions in the world that had witnessed phenomenal growth is Middle East. It had shown excellent growth not only in the traditional oil and gas sector in which it has abundant resources but also in other sectors like services, retail, tourism and hospitality. Having some of the fastest growing cities with state of the art infrastructure carved in the midst of the dessert Middle East attracts a large chunk of tourist from all around the globe. Along with the leisure tourism the segment which is growing by leaps and bound is the “Business tourism” or the MICE segment. In the following blog the author will attempt to do a comprehensive PEST analysis of the MICE industry in Middle East. ( #)

PEST Analysis: -

Political factors: -

• The political factors in Middle East have both pros as well as cons.

• It has real sincere govt. machineries which want to put the region on the forefront of the tourism as well as business tourism market.

• Strong initiatives are taken, delegates are sent to different parts of the world, programs and promotional campaigns are conducted and meetings and conferences are high on the government agendas.

• The region has huge geo- political significance which attracts the attention of policy makers, corporate, officials, diplomats etc towards it.

• The down side is that many parts of the Middle East are politically volatile and disturbed which can create apprehensions about it.

Economic factor: -

• Middle East had been among the fastest growing regions in the world.

• In the past two decades the region had witnessed phenomenal growth.

• After the dip in the oil prices its growth rate went down and it witnessed a modest growth rate of 2.9% in 2009. ( Business intelligence middle, 2010)

• Though yet to catch with the other developed markets the economy is poised for a strong growth in 2011. Govt. expenditure and rising oil price will facilitate stronger GDP growth in the region. (, 2011)

• Middle East has cities like Dubai, Abu Dhabi, Kuwait, with state of the art infrastructure. There are also cities like Doha, Muscat etc which are growing very fast and investing hugely on infrastructure.

• The region can boast of some exquisite hotels, resorts, spas, leisure park and super market stores such as Burj al Arab, Emirates palace, Marina Mall tower, Abu Dhabi ice rink, Abu dhabi Ferrari theme park, Palm islands, etc.

• States run efficient and effective airlines such as Emirate airways, Etihad airways, Qatar airways etc that connects the region smoothly and frequently with the rest of whole world.

• Many parts of the region are going to invest heavily on infrastructure. Qatar which is hosting 2022 football world cup is going to invest 250 Billion US dollars in infrastructure, housing, roads, stadiums etc. Oman is going to invest 80 Billion in the next five years where as Kuwait 104 Billion us dollars in the next four years. Abu Dhabi will be investing 27 Billion US dollars in establishing world class museums and attraction centers. (, 2011)

• It can be assumed that since Middle East is an emerging market it puts the meetings and conferences high on the govt. agendas compare to other matured markets. The basic region is that not only MICE is a growing and lucrative industry in itself but it also helps in driving investment and overall branding of the place .

• Middle East is comparatively economical and cost efficient in providing various goods and services in comparison to its more developed Western counter parts. But over the period of time it had been seen that cities like Dubai has become very expensive.

• A matter of concern could be the current Economic condition of Dubai, the city state considered as the epicenter of business and tourism activities in the Middle Eastern region has a debt of around 110 Billion US dollars and in 2010 it recorded a sub standard GDP growth of 3.2%. (, 2011)

Social factors: -

• Islam plays a very important role in Middle Eastern culture.

• The primary inhabitants of Middle East are Arabs which are known for their warmth and hospitality.

• Many of the leading cities in the region such as Dubai, Muscat, Abu Dhabi and Kuwait etc are very cosmopolitan in nature with more than 50% of population comprising of expat population.

• The downside can again be the political turmoil and fundamental forces existing in the society.

Technological: -

• Middle East has some state of the art convention centers like the ADNEC (Abu Dhabi national exhibition center), DWTC (Dubai world trade center), QNCC (Qatar national convention center), Bahrain international convention center etc with excellent technical facilities to conduct meetings and conferences of international standard.

• Telecommunication facility varies in the Middle East from being very advanced to very rudimentary. Most of the nations have their own national operator though of late many of them are introducing foreign players as well. (, 2008)

Note: -

# (A point to be noted over here is that Middle East has a wide range of diversity within itself, there are places, which are growing very fast where as those just trying to catch up, which have huge oil and gas deposits as well those with almost no oil, which are very cosmopolitan and open in nature where as those which are comparatively less open. Hence the given analysis is just a generalized analysis and tries to look at Middle East as a single entity. Individual analysis of individual places and states will follow in subsequent blogs. )

Reference: -

1> Business intelligence middle, 2010, Middle East economic growth to rebound to 3.7% in 2010, says World Bank, available at <  >

2> , 2011, Faster growth in Middle East economies expected in 2011, available at <  >

3> , 2011, Faster growth in Middle East economies expected in 2011, available at <  >

4> , 2011, Faster growth in Middle East economies expected in 2011, available at <  >

5>, 2008, Executive summary: Middle Eastern Fixed Voice and Telecommunications Infrastructure Market, available at <  >


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