Etisalat : Strategic Analysis

                                      Fig 1: Etisalat Logo ( source : PTCL worker.com)

                                                   

 The given blog is exclusively dedicated to the telecomm giant from Middle East, UAE based Etisalat. Etisalat is among, one of the non oil sector based success stories from the Gulf and the given blog will do a detailed analysis for it. This will consist of the basic introduction followed by the overall telecomm market in UAE. In the next part the growth and expansion of various businesses of Etisalat over the last decade will be studied,  followed by some of the major international subsidies of Etisalat. In the concluding part the future strategies of Etisalat will be analyzed. Once the blog will be done, another blog, dealing with the financials of Etisalat will be rolled out soon.

Introduction

Emirates Telecommunication Corporation, branded as Etisalat is one of the major telecommunication companies in the world, operating across Middle East, Asia and Africa. It provides mobile and fixed line data and voice services to individuals, enterprises, telecomm companies etc. It also provides a wide range of high tech and complimentary services to telecomm companies including SIM card manufacturing, payment solutions, staff training, peering, voice and data transit, sub marine and land cable services. (Etisalat.ae, 2011)

The company was founded in 1976 as a joint venture between International Aeradio limited, a British company and local partners. Later on in 1983, the govt. of UAE had a 60% stake in the company and rest was publicly traded. From 36,000 exchange lines in 1976, it was having around 7, 47,000 lines in 1998. Today Etisalat is considered as one of the biggest success sagas in Middle East and is one of the biggest contributors to the UAE government after the traditional oil sector. Currently operating in 18 nations world wide, it enjoys around 135 Million aggregate subscribers and annual revenue of US $ 8.7 billion. (Etisalat Annual report, 2010)

Table 1:  various companies of the overall Etisalat group

Fig 2: shows breakdown of revenue (as on Dec, 2010) (Source: Etisalat annual report 2010)

Fig 3: shows the breakdown of Etisalat group as on Dec, 2009 (source: Etisalat annual report 2009)

Telecommunication sector in UAE:-



The growth of telecommunication sector at UAE had been synonymous with the growth of Etisalat, its major telecommunication company. The telecom sector in UAE had been highly regulated with Etisalat having monopoly in the market for most of the time. In spite of having monopoly like many of its other Emirati counterparts, Etisalat had always been upfront in coming up with newer technologies and value based innovation in the market. By 2005 mobile penetration was more than 100 % where as internet and broad band penetration was more than 60 %. The market dynamics changed in 2006 with the emergence of Du, another telecomm company in the market. (2dayDubai.com, 2009) Du is owned- 40 % by Dubai government, 20% by Mubadala, 20% by TECOM (Dubai technology and commerce free zone) and rest 20 % is owned through publicly listed shares in Dubai financial market. Presently due to saturation as well as competition the top line of the Etisalat, the major telecomm company seems to be affected in UAE, but it is growing rapidly through international expansion and acquisitions of other players. Moreover the overall ICT sector of UAE (consisting of IT along with telecom) is poised for a strong growth in the coming time. Both the major Emirates of UAE- Dubai as well as Abu Dhabi have ambitious growth plans in the form of Dubai 2015 and Abu Dhabi 2030 respectively and they realize the fact that strong ICT sector is a precondition for achieving these ambitious plans. The ICT sector is expected to get strong boost due to multibillion dollar infrastructure development plans, economic diversification and an exuberant SME segment, in the nearby future.


Growth of Etisalat over the last ten years


From a humble beginning in 1976, Etisalat has grown into a giant organization. According to financial times it holds 140^th position among the top 500 companies, in terms of market capitalization. By the mid of 2000 Etisalat had evolved  from a local player that provided basic wire line and data services to an international player providing a wide range of sophisticated services. The given section will discuss the growth track of Etisalat

           
Fig 8: showing the revenue and net profit of Etisalat, over the last eight years, Source: (Annual Reports 2002, 2005 and 2010)

                      Fig 5: Annual Etisalat mobile subscriber in UAE, over the last ten years (Source: Annual Report 2002, 2004 and 2010)


Key Insights from fig 4:-


• The CAGR (compound annual growth rate) for mobile subscribers , for the  period of last 10 years  is 18.5%

• The CAGR for 2000-05 is 26.1%, whereas for 2005-10 is 11.4%.

• There has not been any substantial growth in the last three years.

Fig 6: Annual Etisalat fixed line subscriber in UAE, over the last ten years (Source : Annual Report 2002, 2005, 2010)

Key Insights from fig 5:


• The CAGR for number of fixed line subscribers over the  period of last 10 years is very modest at 1.97 %.

• The CAGR for the period 2000-05 is 4 % whereas for 2005-10, there had not been any substantial growth

• The overall fixed line market for Etisalat UAE had reduced in the last two years.

              Fig 7: shows the total number of internet subscribers in UAE over the last 10 years, Source( Annual Report 2002, 2005 and 2010)

Key Insights:Etihad Etisalat:


• The CAGR of internet subscribers for Etisalat UAE, over the period of last 10 years is 20.2 %

• The CAGR for 2000-05 is 20.3%, whereas for 2005-10 is 20 %.

• After showing substantial year on year growth for the 1st nine years, the market has taken a dip in the last year.

Fig 8: shows the national as well as international calls in billion minutes, over the last ten years, Source ( Annual Report 2002, 2005, 2010)  

Key Insights:


• The CAGR for, national calls is 10.5 %, international calls is 11.9 %, over the last 10 years.

• The CAGR during 2000-05, for national calls is 18.2% and for international calls is 25.31 %. The CAGR during 2005-10, for national calls is 3.3 % and for international calls is 0 %.

• Both national as well as international calls have taken dip in the last two years.

General Insights:

After studying all the above graphs two important trends are emerging:-

• Etisalat has shown strong growth in all the sections during 2000-05, compared to 2005-10.

• In every section, the market is reducing down for Etisalat in UAE in the last couple of years, owing to saturation (In 2008 penetration in the mobile market had already reached 190 %, hence providing less scope for further expansion), competition by DU and global economic slowdown.

Global Expansion:


Etisalat operates across 18 nations in the Middle East, Africa and Asia. It is one of the fastest emerging global telecomm brands, primarily identifying underserved markets and targeting them with high quality, value based innovative services. The international expansion strategy for Etisalat consists of both, having fully owned subsidies as well as having majority and minority stake in various existing local telecom companies. In its tryst with inorganic growth and expansion, Etisalat had so far got commendable success. It is known for entering aggressivley into new markets and expanding the subscriber base very quickly. The following part will  discuss some of the Geographical success stories of Etisalat.


Etisalat Misr


Etisalat entered into Egypt (also called Misr in Arabic) in 2006, as 3rd mobile service provider in the country. Within 50 days of its launch it captured a base of one million subscribers, which had increased to around 10 million by today. Etisalat’s 2G network covers around 98 % of population while 3G network covers around 73 % of the population. (Etisalat.ae, 2011)
Atlantique Telecom, Moov

Atlantique Telecom (AT) operates in seven countries across West Africa. Etisalat initially had a 50 % stake in AT, which  increased over a period of time and eventually by February 2010, it has  full ownership of AT. Though all the seven nations are different in their socio economic cum political outlook but Moov, the common brand name for AT across the region, enjoys a very strong brand value. The region which is underserved with a low penetration presents a very strong potential for future growth. AT has a coverage of 54 % in the region.

Etisalat Nigeria

Nigeria, the most populous African state with 22 % mobile penetration is high up on Etisalat’s agenda of international expansion. Etisalat entered into the Nigerian market in October 2008 and known for its aggressive early movements, captured one million subscribers by June. By September 2011 it was having a subscriber base of 5 million. Etisalat is known in Nigeria for its top quality service and within year of its launch had been credited with the best service provider by the national telecom regulatory authority, Nigerian Communication Commission (NCC). Currently Etisalat is active across all the 36 states in Nigeria and has coverage of 73 %.

                  Fig 9: Growth of subscriber base of Etisalat Nigeria, source: (www.itp.net)

Etihad Etisalat (also branded as Mobily) is the second mobile service provider in the kingdom of Saudi Arabia after Saudi Telecom. It entered into Saudi Arabia in May 2005, after winning the bid for second GSM license. Mobily was one of the fastest growing GSM service providers in Middle East and North Africa and captured 3.8 Million subscribers, just within a year of its launch. Presently it has more than 17 million subscribers. Etisalat’s GSM service covers almost 97 % of the populated areas where as the 3.75 G service covers 80 % of the populated areas in Saudi Arabia. Etisalat has a 27 % share in Mobily where as 45 % are with six local partners, rest are publicly traded. (Etisalat.ae, 2011)



Pakistan Telecommunication Public Limited (PTCL)

Founded in 1947, Pakistan Telecommunication Public limited or PTCL is the largest telecomm service provider in Pakistan. In 2006, the Pakistan govt. sold 26% stake to Etisalat. 62 % is retained by the govt. whereas the rest 12 % is publicly traded.


Future Strategy


Etisalat is truly a global brand, with operations spread across 18 nations all over the globe. The future of Etisalat depends how well it expands in to various new geographies and technologies along with the kind of value based innovation it brings into the existing portfolios of geographies and product. Though a considerable part of revenue will come from the UAE, but due to intensifying competition and saturation of the market, maintaining a healthy top line from UAE will not be very easy. Following factors can play important role in deciding the future strategy for Etisalat: -


• New Markets: - newer markets like India and Sri Lanka will play a crucial role in influencing future strategy of Etisalat. Many of the existing markets like Pakistan, Sudan Tanzania and Waste Africa are still underserved and have huge future growth potential. Take for instance Sudan where fixed line penetration is just 1-2 %, and hence offers a great growth potential for telecom majors like Etisalat. Similarly India a nation with a population 115 Million and a penetration of 43 % provides strong growth opportunities. Though competition is quite intense in India with 12 players fighting for their share of pie, the sheer size of Indian market can deliver profitability to many of the competent players at the same time. Similarly in Africa, where many  nations are expected to achieve strong economic growth , the mobile, internet and fixed line penetrations are expected to shoot up, thereby providing a strong growth potential. Along with the existing markets, Etisalat needs , continue searching for newer underserved markets, and devise strategies for them.

Table 2 : calculates the future market potential for Etisalat

• Future Growth of UAE: - UAE has strong future growth plans in the form of Dubai 2015 and Abu Dhabi 2029. UAE no more wants to be solely dependent on petroleum for its revenue and aims at diversify into various alternate industries such as ICT, High tech, defense, tourism, trade, media, SME segment etc. Currently these sectors are seeking huge capital investment and the expected future growth will influence Etisalat’s business in a positive way.


• Innovative products for local markets:- Like any other globalized company, Etisalat needs to understand the dynamics of the local market and  come up with innovative solutions, customized for the local markets. One very good example can be the partnership between Etisalat Afghanistan and PTCL, which offered attractive rates between the two countries, resulting in quadrupling of traffic since the launch in 2010.  Etisalat needs to roll out such  innovative customized packages to lure more customers.


• Content generation and monetization of mobile content: is an area, which can have future growth potential for Etisalat. (Comm.com, 2011)


• Newer technologies: - The top management at Etisalat believes “Cloud Computing” as a deeply transformational trend worldwide, and  is planning to launch a wide range of service in this field in the near time. Another area that provides a great future potential is M2M (Machine to Machine) technologies. Etisalat is attempting to develop industry specific solutions in the given field. M2M technology holds a great future potential. According to research done by Research Infonetics in 2009 there were 87 million mobile embedded M2M connections, which are forecast to rise to 428 million by 2014, a compound annual growth rate (CAGR) of 38 %. (Comm.com, 2011)




# Un Served present market size= population * Coverage * (100 – Penetration) * Etisalat’s stake

Reference  

1> Etisalat.ae, 2011, company website, about us: corporate profile,



2> Etisalat annual report, 2010, p-3,


3> 2dayDubai.com, 2009, United Arab Emirates ICT sector and Dubai’s knowledge economy, available at < http://www.2daydubai.com/pages/dubai-ict-sector.php>


4> Etisalat.ae, 2011, Etisalat Misr, Etisalat.ae, 2011, Etisalat Etihad ‘ Mobily’ Saudi Arabia,


5> Comm.com, 2011, Seizing the moment, available at< C:\Documents and Settings\Administrator\Desktop\etisalat vs Du\Seizing the moment Comm_ Decisive coverage of telecommunications strategy.mht >


6> Comm.com, 2011, Seizing the moment, available at < C:\Documents and Settings\Administrator\Desktop\etisalat vs Du\Seizing the moment Comm_ Decisive coverage of telecommunications strategy.mht >

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Analysis of emerging tourism industry of Qatar

                                   fig 1: Doha golf club (source: www.marriott.com) 

Qatar, the second fastest growing economy last year, is attracting a lot of attention from all around the world. Doha, the capital of this US $ 133 Billion economy has catapulted itself into a lavish city, from a sluggish one, within a decade. The success saga of Qatar could not escape from the eyes of the given website and a detailed analysis has been done (The detailed analysis could be found in following link http://themanagmentguru.blogspot.com/2011/02/qatar-past-present-and-future-strategy.html) . The given blog will analyze the emerging tourism sector of Qatar and will be benchmarking its capital Doha against another oil rich emirate, Abu Dhabi. On account of its burgeoning GDP & rapid business growth, Doha aspires to replace Dubai as the capital of Middle East. This might be a possibility in other fields but in tourism, where the Emirate state receives more than 10 million tourists a year, it is far from reality. The tourism industry in Qatar, where 95% of tourists are business travelers, is still in its inception stage and has a long way to go.

Tourism Industry: General overview

In Qatar, where petroleum constitutes 70% of its govt. revenue and 85% of export has ambitious plans for diversifying into various other alternate sectors. Tourism is one of them. Though tourism sector at Qatar is not very matured, it surely is high up on the govt. agenda, and is attracting huge investments, direct as well as indirect.

In 2009, Qatar’s total tourism revenue had been US $ 0.7 billion, lagging behind Bahrain’s US $ 1.1 billion and UAE’s US $ 7.2 Billion (Euromonitor blog, 2010). The biggest driving force for the sector is Qatar winning the bid to host football World Cup, which is considered as the biggest sporting event across the world, in the year 2022. Qatar is the 1st Arab state to host such a huge sports event and this will surely enhance the tourism industry. To prepare for the World Cup, Qatar is in quest of huge investments in infrastructure, hotels, and sporting utilities.

Some of the major infrastructure projects include Lusail city, Qatar Entertainment City, US $ 20 billion Pearl Project, Qatar Metro Project, International airports, football stadiums etc. The following figure shows the inflow of tourists over the period of time. The slight spike in 2006 over 2004 is on the account of Asian games 2006, conducted in Doha.

                                               fig 2: Inflow of tourists in millions

(Source of data: Euromonitor Blog)

Qatar is vigorously building new hotels to bolster its emerging tourism industry. So far it is has a wide range of luxury hotels and is currently concentrating more on development of 3 star and 4 star hotels. In 2010, it was estimated that it had added 2,500 new rooms, thereby bringing the total number of rooms to more than 11,000. (Arabianbusiness.com, 2010) The following graph reflects the number of hotel rooms, including past as well as future projections:

fig 3: total number of hotel rooms in Qatar

                                                 fig 4: counrty profile of inbound tourists in 2008

Types of tourism in Qatar

Qatar’s tourism industry primarily depends on business tourism and, as discussed earlier, 95% of the travelers are business travelers. Along with business tourism, other forms of tourism which are getting developed are luxury tourism, sports tourism, desert tourism etc.

• Business tourism: The high end business tourism is the corner stone of the tourism industry at Qatar, owing to Qatar’s vibrant economy and emergence as a constructive place to do business. The capital, Doha, is also emerging as a powerful MICE (Meetings, Incentive travel, Conferences and Exhibition) venue, along with other Middle Eastern counterparts, like Dubai, Abu Dhabi, and Cairo . In order to support its MICE industry , Qatar has established an institution named QMDI-“Qatar MICE Development Institute”, which is in the business of advising, supporting and conducting top notch business events at Qatar, with international expertise. Presently, there are international hotel chains along with Culture and Heritage Village and Doha Exhibition Center, catering to the MICE segment. Next year, in 2012, the QNCC (Qatar national exhibition center) with a massive space of 40,000 Sq meters is expected to be operational, adding further strength to the MICE industry.

• Lifestyle tourism: Qatar is seeking huge investments in building lifestyle tourism avenues which includes luxury hotels, resorts, spas, marinas, golf courses, exotic islands, coastline development, cultural museums etc. Qatar is a place where modern brilliance blends well with the traditional Qatari charm. Blessed with exotic desert landscapes and magnificent coast line, Qatar has a wide range of things to offer for life style tourists, hailing from all around the globe. Though still in its initial phase, Qatar is coming up with multi-billion dollar master plans to transform itself into a magnificent lifestyle tourist destination.

• Sports tourism: Like other Middle Eastern/GCC cities such as Dubai and Bahrain, Doha is emerging fast as a sports tourism destination. The very 1st thrust for sports tourism in Qatar was conducting the 2006 Asian games, the second largest sporting event after the Olympics. Qatar built around 30 sports facilities for it. The Asian Games 2006, the biggest Asian game of its time, witnessed 45 countries participating in 40 competitive events. (European business review, 2005). Since then, Qatar has conducted some world class events like, SonyEricsson WTA Tour, ExxonMobil Tennis Open, Qatar Masters Cup (golf), Asian Cup Football 2011 and some more. QTA (Qatar tourism authority), QSI (Qatar sports investment) and the Qatar Olympic Committee, in association with other private players, has invested extensively in developing world class sporting complexes such as Aspire Zone, Khalifa stadium, Doha golf course, Lusail international race circuit etc with state of the art facilities. The biggest success which Qatar has got in the area of sports had been winning the bid for hosting 2022 Football World Cup. Qatar had got ambitious plans for this grand event.



Major tourism development projects

The tourism industry at Qatar will go through a very interesting phase in the coming years. There are loads of huge development projects, including a new airport, under construction. The following part of the blog will be having a look at some of these projects:

• Lusail city: It’s a US $ 7.2 billion real estate development project which can accommodate 200, 000 individuals. Spread across an area of 37 Sq Kilometer, it consists of residences, towers, resorts, hotels and an offshore island with 500 villas. The project was announced in 2005 and is expected to be finished by 2020. ( Arabianbusiness.com, 2010)

• Qatar Entertainment City: Qatar entertainment city, a project funded by ADIH (Abu Dhabi investment house) is the part of grand Lusail city development project. Entertainment city is a step taken by Qatar to transform capital Doha into a world class tourist destination. Spread across an area of 10 Sq Kilometer, with a unique Kilometer long waterfront, the project will serve three purpose- residence, retail and entertainment. Along with sea front apartments and villas, five star hotels and retail outlets, the US $ 10 billion entertainment city project will be providing a wide range of entertainment options such as roller coasters, theme parks, cafes, go carting, rain forests, theatres etc. (ecqat.com, 2011)

• Pearl island project: The US $ 20 billion pearl island is a manmade island spread across an area of four Sq Kilometer, developed by United Development Company (UDC), the biggest private equity firm in Qatar. The mixed used project will be consisting of world class apartments, villas, sea front accommodations, hotels and resorts along with wide range of entertainment facilities such as Marinas with around 1000 boats, yacht club, Restaurants etc. The project started in 2006 and is expected to finish by 2011. Once being fully complete, the island will be having 18000 luxury houses, capable of accommodating 41,000 individuals along with 2 million Sq feet of retail space used for retail outlets, restaurants etc. (pearl island homepage, 2011)


• New Doha international airport: By 2012, the new Doha international airport (NDIA) will be operational. The US $ 11 billion airport, with an annual capacity of 24 million passengers (once being fully complete, it can handle around 50 million passengers) and 1.3 million cargos, is expected to be one of the most high tech airports in the world. Once being operational, the base of Qatar airways, the national career of Qatar will be shifted to NDIA. (Constructionweekonline.com, 2009)

2022 World Cup: Preparations


One of the biggest success that Qatar witnessed in the recent past is winning the bid to conduct Football World Cup 2022. The entire state is very excited with this and is preparing hard for the same. In order to successfully conduct the event, huge investment plans are on cards. The following part will be discussing the road map of preparation for the world cup:-



• Road, railways and sea networks: It has been estimated that during the World Cup, 400,000 fans will be visiting Doha from all around the world. In order to facilitate their smooth and fast movement, Qatar is having huge investment plans. It includes allocating US $ 20 billion for the development of road and highway networks, US $ 11 billion for the new airport discussed above, US $ 5.5 billion for deepwater port, US $ 4 billion for building a bridge between Bahrain and Qatar over the sea. There will be an investment of approximately US $ 40 billion in developing a 340 Kilometer, 98 station metro railway networks for Doha and its outer skirts. (Dubaimetro.eu, 2011)

• Football stadium: There is a US $ 4 billion investment plan for building nine stadiums and renovating three existing stadiums. In order to cope with the intense heat, prevalent in this part of globe during the time of world cup, Qatar will be implementing cutting edge climate technologies, which will keep the temperature with in 28 degree Celsius. (worldarchitecturenews.com, 2010)

• Hotels: To accommodate the vast pool of fans coming from all around the world, Qatar has invested religiously in developing 3 star and 4 star hotels. It is expected that by 2022 Qatar will be having around 90,000 rooms. Along with the existing 100 properties, 140 new properties will be used for meeting the accommodation requirements. Qatar is also planning to use a cruise ship with 6000 rooms for accommodating the fans. (HotelierMiddleEast.com, 2010)

Doha vs. Abu Dhabi


Both Qatar and Abu Dhabi are considered as emerging tourist destinations and have striking similarity. In the following part the tourism industry of Qatar and Abu Dhabi will be compared on various parameters.

                               table 1: comparing Qatar and Abu Dhabi across various parameters

Tourism is high up on the agendas for both the Arab state- Qatar as well as Abu Dhabi, and are seeking huge investments in tourism infrastructure and are marketing them very aggressively. While Qatar is preparing hard for 2022, Abu Dhabi aspires having around 7.9 million tourists by the end of 2030, as a part of its vision 2030. ( a detailed blog on Abu Dhabi 2030 could be found in the following link: http://themanagmentguru.blogspot.com/2011/02/abu-dhabis-economic-vision-2030-brief.html  ) They have their similarities, as well as individual competencies. While going by the table, it can be inferred that Abu Dhabi has slight advantage over Qatar, on account of various parameters such as number of, tourists, hotel rooms etc. Qatar’s plus point is its robust economic growth, escalation and expansion plan for its tourism industry, emergence of its national carrier Qatar airways as a world class carrier and winning the bid for organizing football world cup 2022 which can do unprecedented marketing for Qatar as a destination. One interesting point that has to be observed is that since both the Arab state share a lot of similarities and are also geographically closely placed, their ambitious plans for tourism are bound to clash at some point of another. One’s gain will definitely be another’s loss.





Recommendations for tourism industry at Qatar:-

Unique Branding: - Over the period of time Qatar needs to Come up with a unique position for it. In the present scenario, Qatar may have made a mark as one of the fastest economies in the world, but as far as tourism is concern, there is hardly anything differentiating Qatar from Abu Dhabi, Bahrain or Kuwait. It is like any other cash rich/ oil rich GCC state with upcoming, real estate projects, sky scrapers, shopping malls, spas and resorts etc. Qatar needs to build its promotional campaign on something, which can directly differentiate Qatar from rest of the Gulf States. Unique selling prepositions could be its Arabic heritage, economic growth, safety, friendly populace etc.

• 2022 world cup: 2022 world cup will provide a great opportunity for Qatar to showcase its grandeur to the whole world. After winning the bid, Qatar is getting a lot of international attention. The entire process of preparation for the world cup can do wonders in building brand Qatar. Hence it needs to use it judiciously in building a positive brand image for itself.

• Use of large number of hotel rooms post world cup: Qatar is planning to build 90,000 hotel rooms for the world cup. Once the world cup is over, further utilization of such a large inventory of hotel rooms will be difficult for Qatar, until unless it does not develop a strong alternative tourism market for itself. Qatar needs to develop a strong market for a wide range of tourism such as, leisure, life style, sports, desert, cultural, tourism.

• Engaging business travelers: 95% of the travelers visiting at Qatar come for business travelers. Qatar needs to engage such travelers for some leisure activities. It had been observed that business visitors had high chances of revisiting a location for leisure activities.

• Strong focus on inbound tourism: With a per capita GDP of US $ 93,000 in 2008, (Euromonitor, 2009) Qataris are among the richest individuals in the world. Hence it is essential that the tourism authorities at Qatar should not only be focusing on inbound tourism but also emphasize on domestic tourism, given the fact that Qatari nationals have huge disposable income to spend.

#: includes major construction projects along with preparation for the world cup.

Reference:

1> Euromonitor blog, 2010, Qatar’s ambition to develop its tourism sector, available at < http://blog.euromonitor.com/2010/06/qatars-ambitions-to-develop-its-tourism-sector.html >

2> Arabianbusiness.com, 2010, Qatar to see big increase in hotel rooms in 2010, available at < http://www.arabianbusiness.com/qatar-see-big-increase-in-hotel-rooms-in-2010-9747.html >

3> Qatarconvention.com, 2011, homepage, available at http://www.qatarconvention.com/

4> European business review, 2005, Intercontinental hotel links regional development to booming sports tourism sector, available at < http://europeanbusiness.gr/page.asp?pid=532 >

5> Arabian business.com, 2010, Lusail to complete Qatari city in ten years, available at http://www.arabianbusiness.com/lusail-complete-qatari-city-in-10-years-349214. html

6> Ecqat.com, 2011, home page, available at http://www.ecqat.com/en/news/pressrelease. html

7> Thepearlqatar.com, 2011, homepage, available at http://www.thepearlqatar.com/  /SubTemplate1.aspx?ID=165&MID=115

8> Constructionweekonline.com, 2009, New Doha international airport, available at http://www.constructionweekonline.com/article-4830-new_doha_international_airport /

9> Dubaimetro.eu, 2011, Qatar $ 40 billion investment for world cup, available at http://dubaimetro.eu/construction-technology/6816/ qatar-40-billion-investment-for-world-cup

10> Newzglobe.com, 2010, Qatar: investment provides new business opportunities, available at < http://www.newzglobe.com/article/20110421/qatar-investment-provides-new-businesses-opportunities >

11> HoteleirMiddleEast.com, 2010, World cup fans housed at sea for Qatar 2022, available at http://www.hoteliermiddleeast.com/10116-world-cup-fans-housed-at-sea-for-qatar-2022 /

12> Euromonitor, 2009, Euromonitor international: travel and tourism in Qatar, p-48

SWOT Analysis of SME segment of UAE

                      fig: Abu Dhabi( source: emiratespalaceabudhabi.com)    

For any nation a vibrant SME  (small and medium enterprise) segment does not only play an important role in providing vibrancy to the national economy but also  a very important role in providing employment and unwinding entrepreneurial spirit of the population. In the following blog author will be doing a SWOT analysis of the SME sector at UAE.

SME primarily means small and medium enterprises. Different nations have different definitions for the SME segment. According to the definition by European Union companies with up to; 250 employees come under medium enterprise, 50 employees come under small enterprise and 10 come under micro enterprises. Another global definition has been defined by Standard Charted bank that places any organization with a turnover of US $ 1 Million to US $ 25 Million under the SME segment.

SME segment has the following advantage:-

• It’s an important constituent of economy and a major source of employment for many of the emerging economies across the world. In many of the economies around 90% of the non oil GDP comes from the SME segment. SMEs constitute 50% of the global GDP and employs 85% of the world population. (Dun and Bradstreet, 2008)

• Helps in realizing entrepreneurial zeal and creativity of individuals.

• Helps in diversification of the economy.

• Due to ease of entry and exit into the SME segment, it helps  building more elastic and competitive economies.

Along with the usual benefits, SMEs do have their own disadvantages that are as follows:

• These are usually small companies lacking management capacities.

• They find it tough to afford various support services such as, financial services, HR services, IT support etc, which hampers their productivity.

• SMEs have been hit hard by the global economic crisis on two fronts, due to credit crunch as well as customers owing money to them finding it tough to pay back. This had resulted in closing down of many of the SMEs across the globe.

Government across the entire MENA (Middle East and North Africa) and GCC (gulf cooperative council) are emphasizing strongly on the SME segments. UAE one of the important constituent of the GCC has got a very strong SME segment with more than 70% of the non oil GDP coming from the SME segment (Chris Bruin, 2010). The major Emirates of UAE , both Dubai as well as Abu Dhabi have got ambitious socio economic development plans in the form of Dubai 2015 and Abu Dhabi 2030 with a strong focus on SME segment.

The following table shows some important facts and figures regarding the SME segment in UAE

SMEs by Emirates and Sector (Source: Dun & Bradstreet, 2008)

 SWOT Analysis of SME sector in UAE

Strengths:

• Strong economy: as a nation UAE is a rich country with huge oil, trade and tourism revenue. This helps in providing the required institutional support for the emerging SMEs in the Emirates.

• Rise of oil prices: the rise of oil prices have resulted in stronger economy for UAE, eventually resulting into stronger confidence among the business fraternity and higher disposable income for consumption. This will surely have positive impact on the SME segment. (Emirates 24/7, 2011)

• Efficient government: The govt. authorities at UAE are known for their efficiency and speed of execution. As a part of their plans for Emiratization and economic diversification, they are keeping the SME segment high up on their agenda. Both at Abu Dhabi and Dubai associations, intended for encouraging and supporting SME segments, had been formed.

• Intra Regional trade: SMEs are expected to be benefitted by the rise in trade across the MENA region. (Emirates 24/7, 2011)

• Strategic position: UAE is placed strategically between the cross roads of West and East and North and South. This strategic position helps it to attract and retain businesses and human resource talent from all across the globe.

• There had been rapid growth in lending activities for the SME sector in the recent years, from 2003 to 2008 there had been an increase of 200% in lending activities for individuals for business purpose. Along with domestic banks many of the MNC banks like Standard Charted and HSBC have their dedicated business units at UAE, catering specifically to the SME segment. Some of the banks active in SME lending in the given geography are- HSBC, Mashreq, RAK, Union national bank, ADCB, Citi bank etc (Dun & Bradstreet, 2008)

• SMEs can also draw strength from the Inherent strength of Dubai and Abu Dhabi as trading hubs and regional financial centers.

Weakness

• In spite of a booming SME segment, they keep facing various challenges in the form of high start up cost and difficult access to capital. In spite of growth in credit for SMEs, most of the individual businesses still complain about lack of capital. According to a research conducted by Dun & Bradstreet loan rejection  has been estimated to be in the range of 50 to 70%.

• Other challenges include high registration fee, high rental charges, information asymmetry etc. (Dun and Bradstreet, 2009)

• SMEs are vulnerable to low financial buffer, low margins and high operating cost.

• In UAE though some 90 percentage of the firms come under the SME segment where as SME also contribute one third of the GDP, the figure is still low in comparison to other developed and emerging economies where the contribution of the SME segment is around 60 percentage.

Opportunities

• SMEs will get a great boost by the abolishment of the minimum capital requirement of US $ 40, 000 (150,000 DH) for setting up of a limited liability company in UAE. (Dun & Bradstreet, 2009)

• Some of the SMEs are quite competent. Around 58% of them are expected to be operating internationally by 2013. (Emirates 24/7, 2011)

• SMEs at UAE are also expected to be benefited by the increase in international activities by the SMEs worldwide. It is expected that by 2013, number of SMEs worldwide, conducting international activities will increase from 29 % to 40 %. (Emirates 24/7, 2011)

• As a part of their economic growth plans, the Emirates of UAE are planning to diversify into various alternate industries other than the usual ones like petroleum, tourism trading etc such as petrochemicals, education, media, metal works, aerospace, telecommunications etc. Such industries will require a cluster of SMEs working around them and providing various types of support and enabling functions. This will surely boost the SME segment at UAE.

• The Emirates in UAE are coming up with new platforms to encourage and support SMEs. Mohammed Bin Rashid establishment for young business leader had been established in 2002, which specializes in providing financial assistance, training and inspiration to UAE nationals in starting their own business. Another such initiative is “SME 100” that awards top 100 SMEs in Dubai. The Khalifa fund provides funds and training for startups at Abu Dhabi. Such strong initiatives taken by the government will definitely help the SME segment in the long run.

Threats

• As a region Middle East is susceptible to political unrest and turmoil. Though UAE has one of the most popular, efficient and transparent govt. in practice and there is no threat of any impending political unrest in the gulf state, but since the MENA region as a whole is prone to political upheavals, it can affect the intra regional trade, considered very important for the SME segment.

• Compared to other emerging and developed economies, SMEs at UAE are still not matured enough.

• Growing globalization will pose new competitive challenge to the SMEs at UAE.

• SMEs at UAE will also be prone to threat from the bigger industries of UAE. The SMEs will find it hard to match them in terms of management and technical skills, quality and cost effectiveness which their bigger counterparts can produce on account of their scale.

As any other business entity, the SME segment at UAE has its own pros and cons. Some of the them are  structural while some are  conditional. Beyond the given pros and cons, one thing that can not be denied is that, SMEs definitely had a great role to play in the nearby future of the UAE and the govt. authorities in association with private sector  will not prefer keeping any stone unturned in further boosting and encouraging the sector.

Reference:

1> Chris B, 2010, Supporting SME essential for UAE’s growth, Emirates 24/7, available at http://www.emirates247.com/2.308/comment/supporting-smes-essential-for-uae-growth- 2010-06-30-1.261304

2> Dun and Bradstreet, 2008, D&B business insight series: SME lending in UAE 2008, p-3, available at< http://www.dnbsame.com/downloads/D&B_SME.pdf >

3> Emirates 24/7, 2011, 58% UAE SME to go global in 2 years, available at http://www.emirates247.com/business/economy-finance/58-uae-smes-to-go-global-in-2-years-2011-01- 23-1.345825

4> Emirates 24/7, 2011, 58% UAE SME to go global in 2 years, available at http://www.emirates247.com/business/economy-finance/58-uae-smes-to-go-global-in-2-years-2011-01- 23-1.345825

5> Dun and Bradstreet, 2008, D&B business insight series: SME lending in UAE 2008, p-3, available at< http://www.dnbsame.com/downloads/D&B_SME.pdf >

6> Dun & Bradstreet, 2009, Challenges still remain despite removal of LLC capital, available at < http://www.dnbsame.com/news_aug20.html >

7> Dun & Bradstreet, 2009, Challenges still remain despite removal of LLC capital, available at < http://www.dnbsame.com/news_aug20.html >

8> Emirates 24/7, 2011, 58% UAE SME to go global in 2 years, available at http://www.emirates247.com/business/economy-finance/58-uae-smes-to-go-global-in-2-years-2011-01- 23-1.345825

9> Emirates 24/7, 2011, 58% UAE SME to go global in 2 years, available at http://www.emirates247.com/business/economy-finance/58-uae-smes-to-go-global-in-2-years-2011-01- 23-1.345825

The three states of thinking: an insight from Bhagavad Gita

                                                     

After writing a wide range of blogs on the Middle Eastern business scenarios, the author now attempts to write something right out of the realm of spirituality. This blog deals with the “Gradient of Thinking” and has been greatly inspired by “Inner war and Peace”, a book by Osho. “Inner War and Peace” is an insight from “The Bhagavad Gita”, wherein Osho has tried explaining the conversations between the reluctant Arjuna and his enlightened master Krishna. Through the conversation and the explanations that follow them, Osho has elucidated the root cause of pain and anguish of the Contemporary Man.

The blog elucidates on the three states of thinking: Thoughtlessness, Thinking state and No thought. The blog will give a general introduction to the given states along with an overview about how the characters of the Grand Epic Mahabharata fit into them.

Thoughtlessness: This is basically an animalistic way of thinking, where an individual is unable to judge between the right and the wrong. He is blinded by his burning desires and something that we refer to as “the darker side”- ego, arrogance, lust and vengeance. He loses his power to think. Instead of being thought-oriented, he is simply driven by his instincts. The actions taken by such individuals are generally dissimilar from the usual thought process, which is often implemented by normal individuals. A notable point here is that, though definitely a state reflecting animalistic thinking, thoughtlessness is a state of peace, since individuals do not go through the usual trauma of thinking and analyzing, it is devoid of customary anxieties and anguish which thinking brings. In the Mahabharata, the character of Duryodhana is a classic example of a thoughtless person driven by a deep desire to destroy the Pandavas.

Thinking state: This state lies between the state of animalistic thoughtlessness and the divine state of no thought. Moreover, this is not a state; it is rather a bridge between these two. From this state of thinking, man can either fall down into the chasm of thoughtlessness or he can move up the ladder of no thought. This is a state of anxiety and restlessness, because, from here man does not want to go back to the state of beastliness, but he is also unable to transcend  the given state and conquer the state of thoughtlessness. This state, which is somehow a state of dilemma, is very much rooted in a man’s ego. Though it may not be state of egomania, a thinking man’s state of mind revolves around his ego and he tries to decipher every situation or every act in relation to himself. The reluctant Arjuna before the battle is a perfect example of a thinking man.

No thought: On the gradient of thinking, this is the ultimate state, a state of pure consciousness. In this state the individual transcends the state of normal human thinking and goes beyond the chimera of self. Unlike the thoughtless state, in this state the absence of redundant thinking does not arise out of some ignorance or illusion, but out of the self consciousness and enlightenment. Such state is guided by spontaneous actions, without the prying of mind. Here, in this case, lack of thinking means complete freedom. Often our thinking is not free and is influenced by n number of factors such as habitual partiality, surrounding, upbringing, mood etc; but in the godly state of “No thought”, it is just an outcome of pure consciousness. Nothing else has an influence. Though every individual has potential to get into the shoe of no thought, it is very tough to attain. It requires a lot of deliberation, meditation and practice. Krishna, the incarnation of the super power himself is an symbol of “No thought”.

One important point to be noted over here is that that every day as individuals we pass through all the three stages of thinking. There are times when we are pure beast and instinct driven thoughtless creature, whereas at times we struggle with our individuality, with our angst, anxieties and frustrations and, there are times when life moves as effortlessly as pure consciousness.

Now in the following part the author will be placing various characters from the epic Mahabharata across the various parameters of thinking. For better understanding a graph had also been plotted below:-

Duryodhana: King Duryodhana is a perfect exemplar of a thoughtless individual. A symbol of sightless ambitions, Duryodhana was so obsessed with his hatred towards the Pandavas that he just wanted to obliterate them. Even when lord Krishna offered him the proposal of offering five villages to the Pandavas, instead of having a war, he rejected. In spite being a king, he hardly ever gave a thought to the large scale of imminent destruction, which the war could have brought. Hence he had been put at the lowest position of thoughtlessness.

Bheema: Bheema was the counterpart of Duryodhana. A man known for having strengths of many elephants, he was a pure brute force. Like the thoughtless Duryodhana, he had taken the oath of killing all the hundred Kauravas. For Bheema war was a passion, where he could have proved himself. The thoughtlessness of Duryodhana and Bheema gets reflected from their predilection for war. War always brings a large deal of bloodshed and destruction and ends into myriad individual tragedies. Only thoughtless individuals, devoid of the ability to comprehend such destructions, find them engaging.

Karna: The symbol of philanthropy, Karna was without doubt one of the greatest characters of Mahabharata. But the reason of placing him next to Duryodhana and Bheema was his vengeance and deep desire of taking revenge from Arjuna. Sometimes as individuals, we are so obsessed with our hatred towards that one single person, that our power of judgment is lost. The same happened with Karna. He wanted to prove his superiority over Arjuna at any price and in order to fulfill this, he didn’t think of the cosmic destruction that the war would incur.

Arjuna: The great archer Arjuna is perfect exemplar of a thinking man. A man filled with anxieties and anguish arising out of his attachments to the materialistic world. Arjuna’s anxieties before the war were quite natural, given the fact he was going to engage in a war against his own relatives. The war of Mahabharata seemed to be a part of the divine will and stopping it was beyond Arjuna’s capacity, but as an individual he had the freedom to resent, freedom to show his reluctance and this was the source of anxieties in him. Like the other three characters mentioned above, Arjuna was insulated from any kind of deep prejudice or blind thoughts and hence as a normal individual, the entire war seemed merciless, brutal and bloody. He was foreseeing the massive tragedies that would follow after the war.

Bheesma: Having divine origin, Bheesma was one of the characters close to the no thought state. Bheesma was also not in favor of the war, as it was known to him, that it will create a lot of bloodshed. Moreover since he was very attached to his family, seeing his own family members fighting with each other would have given him great trouble. But at the same time, he knew that the war was evident and cannot be stopped. Hence, he accepted it as a part of the divine will and agreed to fight the war on his conditions. He was somehow detached to the final outcome of the war and was just fighting it as a call of duty.

Krishna: Krishna is the perfect symbol of divine consciousness. In contrast to other individuals discussed above, Krishna had gone beyond the state of thinking and reflection. Being a person of pure divine essence, he existed as a completely detached and egoless individual, understood the futility of thinking and hence, believed simply in pure action without being involved in meaningless thinking and reflection. Krishna’s actions were never a reaction, In fact, in a no thought state, one never prefers reacting, because reaction arises out of attachment. When someone is hit hard at his point of attachment, he reacts back. But for someone like Krishna, having the understanding of the whole universe, reaction can never happen. Such people just prefer responding to different situation, without getting attached to them. For Krishna, the war of Mahabharata was not a war for fulfilling some inner desire, nor was he worried of the outcome. For him it was just a normal activity, where he was suppose to deliver his duties.

Reference

1> source of the image: bcswami.com

Egypt VS Turkey: as tourist destinations

In the following blog the author will attempt  doing a comparative analysis of the two biggest tourist destinations from the Mediterranean region, Egypt and Turkey, with the help of qualitative as well as quantitative frameworks. Both Egypt and Turkey are world famous tourist destinations sharing lot of similarities across religious, cultural social and economical parameters.

Profiles as tourist destination

Egypt: Egypt, also known as the cradle of civilization has a very strong and vibrant tourism industry, employing 12% of the work force and receiving around 125 Million tourists every year (Dinar Standard, 2011). It has a wide range of tourist avenues such as Pyramids, Sphinx and other magnificent monuments; exotic desserts, wild life parks and sea beaches; shopping complexes and other life style centers and state of the art golf courses; providing a wide range of activities such as sight seeing, dessert safaris, golf tourism, cultural tourism, sea activities, cruising, adventure sports etc. (Egypt. travel, 2011)

Turkey: Turkey also has a  very rich history and cultural heritage and is  melting pot of various civilizations such as European, Arabic and Central Asian. Like Egypt it also has a wide range of tourist avenues such as; beautiful cities like Istanbul, Antalya, Ankara etc; rugged landscapes, serene and calm sea beaches and coastlines, full of exotic floras and faunas; plethora of heritage sites, museums, monuments and archeological sites etc. The range of activities at Turkey includes site seeing, adventure sports, winter sports, golf, rafting, eco tourism, yachting, night life, cultural tourism, shopping, Turkish bath, cuisines, conventions, wild life adventures etc. (tourismturkey. org, 2011)

Following table  shows the demographic and economic Indicators for 2010 (Euromonitor, 2011):

The following figure compares the GDP growth rate of both, Egypt and Turkey, #

Social Indicators of Egypt and Turkey (Source: UNICEF)

comparison of Egypt and Turkey on some selected social parameters

Tourism industry in Egypt and Turkey

Egypt

Since ancient time Egypt has been a very popular tourist destination, attracting large number of tourists from Europe, Middle East and Africa. In 19th century after Napoleon's invasion,  people once again got interested in Egypt. The new era of tourism in Egypt began in 1989-90, when many of the leading hotels were privatized, airline sector was liberalized and the Egyptian govt. came up with some strong marketing campaigns. Since then the industry has been moving with an accelerating pace, occasionally hit hard by terrorism and political unrest. Last year out of the 125 Million tourists it had received, Russia with 14 % had the highest share, followed by United Kingdom, Germany and Italy. Though presently due to the political unrest the tourism industry had been affected, but in the long run it is expected to grow further, owing to expected political stability and transparency as well as more inflow of tourists from emerging economies like China and India.

The following histogram shows the growth of tourism industry since 1989-90, for Egypt

The following figure shows growth of annual revenue from tourism, over the period of   years,

 

The following pie chart shows the percentage of 10 major countries, exporting tourist to Egypt, in the year 2007 (values given in 000s)

 

Source of data: (Information development support center)

 
Egypt is primarily known for cultural tourism. Having large number of Pharaonic, Roman, Coptic and Islamic monuments and archaeological sites, it’s a paradise for culture tourists coming from various parts of the globe. Though position of cultural tourism is unparalleled, Egypt had also made huge investments in developing various other forms of tourism such as, spa tourism, sports tourism, dessert safaris, beaches tourism, adventure tourism, eco tourism, convention tourism (business tourism) etc. In the recent years, government of Egypt along with the support of International Monetary Fund and other international organizations had made huge investments developing the tourism sector, a sector that constitutes 40 percent of Egypt’s non commodity export and employees more than 2 Million people directly or indirectly.;



Turkey

Thanks to its, rich History, wide range of exotic landscapes, beautiful beaches and strategic position, tourism industry in Turkey had made noticeable growth in past few years, better than many of its European counterparts. Turkey’s tourism sector took a leap during the early 80s. In 1980, Turkey had mere 60, 000 beds and the tourism industry constituted just 0.8% of the GDP. (Mahmut Zortuk, 2009). Presently in 2009 with revenue of around US $ 21 Billion, constitutes 3.4% of the GDP and 20.8% of the export. According World Tourism Organization, Turkey is ranked 7th among the best tourists destinations in the world and holds 9th position in terms of annual revenue from tourism. (Sunday’s Zaman, 2011) Istanbul; the capital of two of the greatest civilizations in the world, Byzantine and Ottoman civilizations; along with Antalya are the two important points focal point of Turkish tourism, comprising of 60% of the tourist intake . The city was the 3rd most visited city in Europe as on 2008, and was the cultural capital of Europe in 2010. (Invest in Turkey, 2009)

The following columns shows the growth in inbound tourism over the period of time

Source of the data: Middle East and North Africa report, Istanbul Bulletin, Sunday Zaman, Country studies, Central daylight time

The following figure shows growth of annual revenue from tourism, over the period of   time,

Source of data: Middle East and North Africa report, Istanbul Bulletin, Sunday Zaman, Country studies, Central daylight time

Over the coming years, tourism industry in Turkey is expected to grow further, with around 3.3 Million tourists in 2012. Around 40% of tourists come from, Russia, United Kingdom, Germany and Iran. Major tourist attraction in turkey includes, archaeological sites, monuments, museums, beautiful coastline with 314 beaches, rugged landscapes etc and major forms of tourism includes cultural tourism, winter tourism, beach tourism etc. Other alternative forms of tourism had been developed such as medical tourism, religious tourism and sports tourism. Turkey having 14 golf courses, 20 skies and 40 marinas as of 2008, had also been an emerging sports tourism destination. Similarly it is evolving as a medical tourism destination, with a large number of medical tourists coming from Middle East region.

Comparing Egypt and Turkey on a “Nine Point” Analytical frame work @

The success of a tourist destination depends on a wide range of factors ranging from places to visit, connectivity to political stability and infrastructure etc. In the following part of the blog, both the destinations will be judged on a set of nine parameters, with every parameter having a specific weight age score, depending on the importance of the parameter. Based on the competencies shown under individual parameters, they will be rated from 1 to 5, with 1 being very low to 5 being very high. Finally the individual scores will be multiplied with the weight age score and their sum total over all the nine parameters will be the final score for the individual states.

• Places to visit: the success of any tourist destinations relies heavily on the things it has to offer, whether it has places exciting enough to be adored by tourists, coming from various parts of the world. Under this section, both Egypt and Turkey has enough to offer; while Egypt had some most sought after archaeological sites and monuments, along with beautiful beaches, exotic desserts, spas, golf courses, convention centers Nile cruises etc; Turkey is also rich with archaeological sites, museums, monuments along with beaches, springs, flora and fauna, sports and medical utilities, convention centers, exciting night life etc. Hence both have been rated as 5.

• Infrastructure: includes, hotels, resorts, roads, public transportation, telecommunication, ICT (information and communication technologies), convention centers etc and plays a very important role in the tourism industry by ensuring comfortable and hassle free stay for the tourists. Turkey has around one Million beds, 46 airports, and extensive road networks, Turkey is ranked 55 in the T&T business environment and infrastructure sub index, consisting of ,air transport, ground transport, tourism, ICT, infra structure, tourism infra structure. Turkey lags behind in infrastructure in contrast to, many of its developed counterparts in Western Europe, UAE, USA, Bahrain, Singapore etc. In the given sub index Egypt has a rank of 74. Based on their rankings, a score of 3 and 2 had been given to Turkey and Egypt respectively.

• Safety: is another major concern for the tourists, it has a huge psychological impact in the minds of visiting tourist and a perceived feeling of lack of safety can often result in avoidance of a destinations. Both Egypt and Turkey have their own safety concerns, with the situations presently being more serious in Egypt due to the current political instability. There had been many attacks on tourists by fundamental forces in both Turkey as well as Egypt, resulting in high causalities, there by hitting the tourism business hard. Along with religious fundamentalism, Turkey also struggles hard with Kurdish uprising in the South, which had occasionally targeted tourists. Based on these serious safety concerns a low score of 2 had been decided for Egypt and Turkey, which had been further revised to 1 in case of Egypt, in view of the present revolt, which resulted in one Million tourists leaving the place.

• Cost: Both Egypt and Turkey are comparatively cost effective in comparison to many of its counterparts in Europe. Egypt is one of the low cost tourist destinations where the cost of travelling is 20 % of the United Kingdom. Cairo its largest city has a rank of 224, in terms of cost of living among 276 places in the world. According to an estimation by budgetyourtrip.com; average daily travel in Egypt, which includes accommodation, food, water, local transportation etc could cost around US $ 33.5; souvenirs could cost around US $ 100 and daily travel and cruise trips can cost around US $ 30. In case of Turkey values for the same will be US $, 47, 8 and 55 respectively. Cost of daily travelling can cost US $, 200, 164, 77 and 51 in United Kingdom, USA, Mexico and Thailand respectively. Few tourist destinations cheaper than these two places could be Morocco, India etc. Hence for cost, on a scale of 5 a score of 5 had been given to Egypt where as 4 had been given to a bit costlier Turkey.

• Strategic Location: Turkey is strategically placed between the cross roads of Europe, Middle East and Central Asia. Similarly Egypt, situated in North Africa is at a distance of mere four hours from Europe and is at the door steps of Middle East. For both of them, strategic location have played pivotal role in their tourism industry. In the given parameter a score of 5 had been awarded.

• Marketing: Owing to the fact that tourism plays a very pivotal role in their individual economies, both Egypt and Turkey intend to take strong initiatives in marketing their destinations. Ministry of tourism and culture in Turkey has an ambitious plan of achieving 50 Million tourists and US $ 40 Billion as revenue by 2023, as a result of which it has opened offices all across the world, taking strong marketing initiatives. In spite of this, marketing expenditures are believed to be low in comparison to some of the heavily marketed destinations like Spain, UAE etc. The same holds true for Egypt, though it has its own tourism ministry with a fix budget allocated for marketing, a lot more can be done. In case of both Turkey as well as Egypt handful of nations like Russia, United Kingdom, Germany, Italy and some Arab countries constitute the majority of their tourists, indicating lack of diversity in their marketing campaigns. Hence a score of 3 had been given to both the countries.

• Climate: Climate is another factor, deciding the success of a tourist destination, though few adventurous souls might like harsh weather conditions, for most of the leisure tourist it might be a turn off. Egypt has comparatively moderate temperature with warm days and cold nights; during summer temperature fluctuates between 43 degree C during day and 7 degree C in night, whereas during winter, varies between 30 degree C to 18 degree C. The warm weather in Egypt is considered to be very refreshing for tourists. In comparison to Egypt, Turkey has a varied climate with coastal areas having typical Mediterranean climate with hot summers and mild, wet winters and East of the country having snowy winters and warm summers, often used for winter tourism. Istanbul has a cooler version of Mediterranean climate where as Antalya; home to some of the best beaches and resorts has a much warm coastal temperature. On account of their favorable weather conditions a rating of 4 had been given to them.

• Social factors: People from both Egypt and Turkey are known for their warm and loving attitude towards the tourists. In Egypt a large number of people speak and understand languages like English, French, and German etc. Similarly in Turkey English is taught as second language in most of the govt. sponsored schools, other than English lot of people do speak and understand German, Russian, Arabic etc. In terms of other social factors affecting tourism industry, directly or indirectly such as literacy rate, higher education, telephone penetration, internet penetration etc Turkey has a clear cut edge on Egypt, hence 4 had been awarded to Turkey and 3 for Egypt.

• Legal factors: Factors such as the visa procedures and the legal system of a country are also important for the tourism industry of a nation. Both Turkey and Egypt have easy visa obtaining procedure and legal frame works very much in line with the Western world, hence there is not much of a trouble for the tourists. A score of 4 had been given to both of them.

The following table followed by graph shows the score of both the countries across the nine parameters:

                       

      
            Egypt : sub total 157

           Turkey : sub total 167

Though both Egypt and Turkey had emerged as great tourist destinations in the past few decades, with both having their unique selling proposition; one an ancient land with some of the most magnificent monuments and archaeological sites while other, a moderate and prosperous Islamic society also blessed with a rich cultural and historical heritage and catching up fast with its other developed counterparts, both in terms of outlook as well as approach. If data speaks something, then the comparison between Egypt and Turkey goes in favor of the later. Not only does Turkey has a bigger tourism industry than Egypt and has better figures under various social and economic indicators but also has 10 point higher score under the nine point analytical framework. The difference in the scores can be explained with the help of underlying difference in the structure of Turkey and Egypt. Both the nations do have their own share similarities, since both, are Moderate Islamic societies having very rich heritage, are making headways in the tourism industry by investing in various new and alternate forms of tourism and are moderately cost destinations providing a value based proposition to the tourists but along with this similarity there are some gross dissimilarities also. While Egypt had just started liberalizing its market, investing in social infra structure and post revolution is attempting a transition into a liberal and transparent democratic system; Turkey on account of its inclinations towards the European world had made huge strides in investing in social and physical infra structure, is a moderate, transparent and secular democracy and has implemented economic reforms much before. Turkey itself has huge ambitions of achieving 50 Million tourists by 2023 and is yet to achieve its full potential as a tourist destination, yet it can be an inspiration for the newly evolving Egypt. Turkey, a prosperous and modern society with strong Islamic roots can be a ‘great model state’ for a new Egypt.

The Turkish model can not only be beneficial for the tourism industry in Egypt, but can also be an inspiration for various parts of its, economic, social and political future.

# for the year 2011 for Egypt, the estimated GDP growth of 5.5% has been revised to 3.5%, due to the current political turmoil.



@ This nine point frame work had been made with the help of a seminar session attended by the author at Sheffield Hallam University, Sheffield, United Kingdom. The seminar was attended by students from various countries across the globe such as, India, Germany, China, Pakistan, Oman, Libya, United Kingdom etc



Reference:

1> Dinar Standard, 2011, Egypt revolution: facts and updates, available at < http://dinarstandard.com/challenges/egypt-crisis-business-facts-updates/>

2> Egypt. travel, 2011, home page, available at < http://www.egypt.travel/?flashinstalled=2>

3> Tourismturkey.org, 2011, home page, available at http://www.tourismturkey.org/

4> Euromonitor, 2011, Reference books, available at http://www.euromonitor.com/turkey/country-factfile

5> Mahmut Zortuk, 2009, Economic impact of tourism on Turkey’s economy: evidence from cointegration tests, p- 231-232

6> Sunday’s Zaman, 2011, tourism industry making headway in Turkey

7> Invest in Turkey, sectors, tourism