Revamping the value chain inexhibition facilities: the case ofthe Dubai exhibition industry

Colin Butler, Yahia Bassiouni, Mohamed El-Adly andAchmad Widjaja

UAE University, Al Ain, United Arab Emirates

Abstract

Purpose – The purpose of this article is to compare past and current experience of exhibitionactivities in the UAE in general and in Dubai in particular, to identify the major hurdles and obstacleswhich had arrested the advancement of this sector, and to benchmark this activity vis-a-vis Dubai’smain competitors both nationally and internationally.

Design/methodology/approach – For each of four selected exhibitions, a systematic randomsample of 1,000 visitors was selected. The data were collected via structured face-to-face interviewsusing a standard questionnaire on the four sites. In addition, a random sample of 100 exhibitors wasselected for each of the four exhibitions. The data were collected via structured face-to-face interviewsusing a standard questionnaire on the four sites. Several in-depth interviews with the staff of theexhibition’s organizers representing the different exhibitions under study were carried out before,during and/or after the events to help identify the challenges and opportunities.

Findings – The exhibition value chain can be improved in several key activities. Several importantstrengths and weaknesses have been identified for the Dubai exhibition industry. The best practice offacilities in Paris offers Dubai the best model for increasing sustainable competitiveness. The key forthe Dubai exhibition industry is differentiating the city from the competition and value innovation inthe exhibition value chain.

Research limitations/implications – Dubai is a rapidly expanding city, making growth inattraction difficult to predict.

Practical implications – Recommendations are developed to improve Dubai exhibition facilities.

Originality/value – The paper provides analysis of a growing industry in a high growthdiversifying economy.

Keywords Trade fairs, Value chain, Benchmarking, Tourism

Paper type Research paper

IntroductionThe exhibition industry is characterized by different types of products delivered on asimilar platform, i.e. an exhibition can be held showcasing products from the computer,aerospace, defense, publishing, health, household goods, medical, education and carindustries but similar activities are performed to deliver the overall product to thevisiting public. Every exhibition requires a venue. Every exhibition requiresorganization of the exhibitors. Every exhibition requires marketing.

Trade exhibitions are obviously regarded as an important tool of marketingcommunications. Table I shows that there are several countries that have shown agrowth greater than 50 per cent in the last ten years since 1993. Table II shows the topten international meeting cities in 2004.

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/0263-2772.htm

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Received January 2007Accepted June 2007

FacilitiesVol. 25 No. 11/12, 2007

pp. 419-436q Emerald Group Publishing Limited

0263-2772DOI 10.1108/02632770710822544

The costs of exhibiting at international shows are high. They are also associated withcosts such as insurance premiums and exhibitors’ costs for travel, accommodation andsubsistence.

Dubai has been boosting the tourism sector for more than a decade, the restaurantsand hotels sector, as a part of the whole tourism sector, contributed only 4.5 percent toDubai GDP in 2003. In fact, in investigating an economic assessment of a tourismactivity, one should notice that parts of transport services and retail trading in thedomestic economy, such as domestic airlines, rental cars, local taxis, souvenir shops,are used by visitors and contribute to an increase in domestic income.

The objectives of the study were:. to identify satisfaction levels of exhibitors and visitors with exhibition

organization in Dubai;. to identify satisfaction levels of exhibitors and visitors with Dubai as an

exhibition destination;. to identify major obstacles to exhibition organization in Dubai;. to identify the profiles of exhibitors and visitors to exhibitions in Dubai;

Country Percentage of growth (1993-2002)

Iceland 173Australia 144Fiji 140South Africa 125Peru 113New Zealand 86Slovenia 83South Africa 81Thailand 69Cuba 56Turkey 54

Source: www.uai.org

Table I.Countries experiencingrapid growth inconvention centerindustry

Ranking Country

1 Paris2 Vienna3 Brussels4 Geneva5 Singapore6 Copenhagen7 Barcelona8 London9 Berlin

10 Seoul

Source: www.uig.org

Table II.Top ten internationalmeeting cities in 2004

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. to benchmark Dubai exhibition facilities against international competition;

. to identify activities in the exhibition value chain providing value to exhibitorsand visitors in Dubai; and

. to identify which activities in the Dubai exhibition value chain need to be raisedto market leaders’ standards.

Industry reviewThe exhibition industry is a global industry with exhibitions being held in countries allaround the world under different political, economic, social and technologicalenvironments. When comparing exhibitions against each other, differences inenvironments must be taken into consideration in order to measure how efficientlyactivities are being performed. A major drawback for the exhibition industry is a lackof space (Bury, 2005).

In the US, exhibitions absorb one-fifth of all US marketing budgets, the secondlargest expenditure after advertising (Jacobsen, 1990). In Singapore, the conventionand exhibition industry which includes meetings, incentives, conventions andexhibitions (MICE) is worth about a billion dollars a year and provides 15,000 jobs.Singapore has performed well as a MICE destination in an industry that is gettingincreasingly competitive (Tay, 2006).

The trade show medium plays a much larger role in Europe and other foreigncountries than in the US. For example, attendance at the top 100 events in Europeaverages 77,000 visitors versus about 22,000 in the US. Trade shows accounted forone-fifth of the typical American business market promotional budget, second only topersonal selling activity and ahead of print advertising and direct mail while in Europe22 percent of the total media budget is spent on trade shows, three to four times that ofthe average firm in the US. Hanover Fair, the world’s largest trade fair with 5,500exhibitors from 44 nations, regularly exceeds 500,000 attendees during its two weekrun each year in April (World Tourism and Travel Council, 2005).

The high growth areas in the global exhibition industry are healthcare, building andconstruction and food although in terms of overall sales aviation and defense continueto be the most lucrative. IT, telecom and manufacturing are experiencing low growthrates. Security may add to costs but will be imperative particularly given the regionalpolitical instability. Increasing marketing budgets may be the most effective method inthe short-term of attracting more exhibitors and visitors until Exhibition City iscompleted. However, exhibitions may have to be located in across several locations inorder to sustain the growth and this in the medium term may prove unattractive forsome exhibitors.

A five star hotel in Dubai is $200 more per night than in Singapore. For a team of sixpeople to spend six nights in each city would be $13,800 in Dubai and $6,600 inSingapore.

The cost of flights has reduced over the last three years. With exchange ratesfactored in (the Euro has strengthened against the dollar) the cost of flying betweenDubai and the major European cities has fallen from e1,050 ($1200) to e300 ($360).Hotel rates for five star hotels in Dubai have risen from $95 per night in 2002 to $385 in2006.

Ultimately, firms must justify their expenditure on exhibitions. They must be ableto show sales and potential future sales from the show. The growth of the exhibition

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industry continues to be extremely beneficial for the hotel industry. A total of 48percent of bed nights in the UK, for example, in 2004 were for attending anexhibition[1]. The exhibition industry, in return, seems to get little back in term socosts from the hotel industry. Delegations are getting smaller as is average size ofstands being booked (less staff means a smaller stand is required). Firms will searchthe global marketplace for the best value and with growing markets in Eastern Europeand South America will switch a percentage of promotional budgets to emergingmarkets meaning less for Dubai. Dubai must continue to evolve its marketing mix ofexhibitions with conferences and meetings (MICE) and business with tourism.

The US provides competition but held 14,124 events in 25 cities in 2004demonstrating the market to be very fragmented. The concerns for the future in theglobal exhibition industry are security, increased demands for promotional budgetaccountability, value for money for exhibitors and size.

Many of the limitations of the physical exhibition can be overcome by exhibitingvirtually. A well-constructed VE site will allow a visitor to “stroll” through its various“exhibition halls” to view the multi-media demonstrations and tailored promotions.Both European and the Middle-Eastern managers are in general agreement that the VEprovides customers with greater and richer information about their companies andproducts than traditional exhibitions (Lee-Kelley et al., 2004).

Paris is the leading exhibition competitor for Dubai to benchmark its activitiesagainst. Singapore is the leading regional competitor. Paris boasts world-class tourismfacilities and this was cited as a major competitive advantage for it exhibition industry.There were four times as many exhibitions in Paris as there were in London in 2004. Avisitor can walk from the Palais des Congrues that has an exhibition space of 10,000 sq.meters to the Arc de Triomphe in ten minutes (Centre for Exhibition Industry, 2004).The exhibition industry is a fragmented industry with no market leader dominatingand many medium-sized firms operating in cities all around the world. Recommendedstrategies for fragmented industries include operating a formula type of operation suchas a franchise, focusing on a special type of product, focusing on a special type ofcustomer or being low cost. As most exhibitions aim to attract Exhibitors from a broadmarket and want to provide value for money, a strategy focusing on a special type ofproduct is appropriate.

This research is important as it analyses what strategy Dubai must engage in orderto increase the contribution of the exhibition industry and the tourist sector to itsdiversification plans over the next 15 years.

Strategic planningA trade show’s return on investment stems from how well a company can extract valuefrom interactions on a crowded floor. Pre and post-show planning provides a strategicmeans to manage and nurture leads generated during the show. Together thesestrategies move marketers toward their real goal: return on investment (Woolard,2007).

Exhibitions are unique amongst new and established media in enabling customers,prospects and industry colleagues to meet face to face. With the development ofnetwork economy, e-commerce plays a major role on new economy stage (Jinlin andXiaogin, 2004).

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Strategy making, flow controlling and profit obtaining still determine businesssubsistence. E-commerce simplifies actual exhibition mechanism, decreases its cost,saves time, improves competitiveness and promotes its rapid development (Jinlin andXiaogin, 2004).

The conference business – comprising the total spending on meetings, events,shows, exhibitions, and everything under that heading – is huge. The averagecompany spends 20 percent of its marketing communications budget on eventmarketing. The conference business is a profligate economy of its own (Wurman,2006).

When a potentially attractive marketing tool offers face-to-face customer contactcoupled with the allure of increased sales, marketers might be expected to embrace iteagerly. They have embraced trade shows, but often come away feeling as if they hadbeen hustled. This is primarily due factors lack of the effectiveness of these eventscompared with other marketing communications tools, such as selling or advertisingand high and rising costs of participation (Bonoma, 1983)

The value chain is a model that describes a series of value-adding activitiesconnecting a company’s supply side (raw materials, inbound logistics, and productionprocesses) with its demand side (outbound logistics, marketing, and sales). Byanalyzing the stages of a value chain, managers have been able to redesign theirinternal and external processes to improve efficiency and effectiveness. The latter hasgiven rise to the world of electronic commerce, a new locus of value creation (Rayportand Sviokla, 1995).

Along an innovation value chain, there may be one or more activities that acompany excels in – the firm’s strongest links. Conversely, there may be one or moreactivities that a company struggles with – the firm’s weakest links (Hansen andBirkinshaw, 2007).

Every company occupies a position on a value chain. Upstream, suppliers provideinputs. The company then adds value to these inputs, before passing them downstreamto the next actor in the chain, the customer (whether another business or the finalconsumer). Increasingly, successful companies do not just add value, they reinvent it.Their focus of strategic analysis is not the company or even the industry but thevalue-creating system itself, within which different economic actors – suppliers,business partners, allies, customers – work together to co-produce value (Normannand Ramirez, 1993).

Increasingly, firms are farming out marketing operations and analytics as well. AForrester Research (in McGovern and Quelch, 2005) survey of 650 B2B marketingexecutives found that 53 percent aimed to outsource more than half their marketingactivities in 2004. Outsourcing can save money and improve quality. Outsourcing canprovide increasingly critical left-brain marketing expertise that many companies lack,such as customer database management and analysis (McGovern and Quelch, 2005).

Fierce competition, globalization and the development of new information andcommunication technologies have forced organizations to continuously search for andadopt new configurations (processes and structures) by which to exist (Fernandez et al.,2001). Benchmarking is an important tool in the analysis of competition in industry.The selection of the key performance indicators to be used also has a profound impacton organizational change. Performance measures are instruments designed to triggerthe management of change. The management of change is necessary for agility. But it

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is the rate at which changes are implemented and the degree to which they improvecompetitiveness that will determine agility success. Benchmarking is a relativelypopular technique for business process improvement (Sarkis, 2001).

The aim of benchmarking is to compare the costs incurred by the firm underinvestigation against the costs of its leading competitors in the industry. If this firm isthe industry leader, its costs should, in theory, be the most competitively and efficient.If this firm is not the industry leader, it needs to establish how competitive it iscompared with the firm ranked number one. If the firm can identify cost disparitiesbetween itself and the leading firm, it can take corrective measures to match the leader.Benchmarking is about “learning” from other organizations, with a view to adoptingcompetitive practices. The key issue here is whether such practices in their entirety canbe successfully adopted by the organization. This is an issue of “transferability” andpart of the learning process is to understand whether the identified practices couldconflict with an existing organizational culture, management style and structure. Thisis especially the case when trying to transfer competitive practices across cultures, i.e.between organizations in different parts of the world (Zairi and Ahmed, 1999).

A product delivered to the market place undergoes several stages of processingbefore it reaches the consumer. These stages include research and design, supply,manufacturing, assembly, quality control, distribution, marketing, process completion,internet related processes, sales and customer relationship management. Everyactivity adds value to the overall product as it moves from stage to stage. There ishowever a cost associated with performing each activity. The more activitiesperformed on the product, the higher the standards of value and quality. Acompetitively performing firm should be able to perform each actively as costeffectively as the industry leader without compromising quality. Costs can be reducedby eliminating an activity but this reduces the added value and changes the nature ofthe overall product.

The value chain of activities for the exhibition industry involves performingactivities to organize and deliver an especially themed exhibition to either the public,the business community or to both. In order to perform a benchmarking analysis of theexhibition industry in Dubai against Dubai’s leading competitors, it is necessary toidentify the stages involved in holding an exhibition in the city from start to finish.Once these activities are identified, the competitiveness of the costs can be scrutinized.

As well as financial costs there are associated non-financial costs incurred with eachvenue. These can be related to the ability to conduct business (transaction costs) interm of time-delays and ease of access to political and social costs such as the stabilityof the country and the attractiveness to visitors from outside the region. The maturityof the industry in a city and its overall business and tourism facilities all contribute toadd value and incur costs to the exhibition industry value chain. Overall ease andattraction of conducting business in the city, low restrictions on access to internationalbusiness facilities, responsive and dependable culture, educated and trained staff,efficient processing of regulatory requirements, and the banking facilities andregulations governing finance add value and incur extra costs and vary from countryto country to different degrees.

In a competitive global market, exhibitions in Europe and US are leading themarket. The exhibition value chain is being reinvented. Exhibitions are usinge-business for promotion and outsourcing certain activities. Exhibitions are growing

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larger in size and attracting more visitors. With the industry evolving in the eras of theinternet and globalization, some firms from different regions embrace change anddemand higher standards more quickly than others. For this research, there are 11hypotheses developed pertaining to the value chain:

H1. There are significant differences between origin of Exhibitor HQ andsatisfaction with Dubai exhibition promotion.

H2. There are significant differences between origin of Exhibitor HQ andsatisfaction with Dubai exhibition visitor numbers.

H3. There are significant differences between origin of Exhibitor HQ andsatisfaction with Dubai exhibition layout.

H4. There are significant differences between origin of Exhibitor HQ andsatisfaction with Dubai exhibition organisers’ performance.

H5. There are significant differences between origin of Exhibitor HQ andsatisfaction with Dubai exhibition stand area.

H6. There are significant differences between origin of Exhibitor HQ with Dubaiexhibition stand design.

H7. There are significant differences between origin of Exhibitor HQ with Dubaiexhibition location.

H8. There are significant differences between origin of Exhibitor HQ with Dubaiexhibition banners.

H9. There are significant differences between origin of Exhibitor HQ with Dubaiexhibition availability of communication networks

H10. There are significant differences between origin of Exhibitor HQ with Dubaiexhibition construction cost

H11. There are significant differences between origin of Exhibitor HQ with Dubaiexhibition space rental cost.

MethodologyBecause of their importance and uniqueness in the exhibition industry, it was thedecision of researchers to survey four exhibitions: IDEX, February 2005, followed byGITEX, September 2005, then Air Show, November 2005, and finally World Book Fair(SWBF), December 2005. To achieve the above stated objectives, field surveys of thefour selected exhibitions were accomplished as well as a secondary data analysis ofDubai Exhibition Industry.

For each of the four selected exhibitions, a systematic random sample of 1,000visitors was selected. The above sample size was calculated to secure a margin of errorwithin three percentage points. The data was collected via structured face-to-faceinterviews using a standard questionnaire on the four sites. In addition, a randomsample of 100 exhibitors was selected for each of the four exhibitions. The data werecollected via structured face-to-face interviews using a standard questionnaire on thefour sites. Several in-depth interviews with the staff of the exhibition’s organizers

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representing the different exhibitions under study were carried out before, duringand/or after the events to help identify the challenges and opportunities.

The exhibitors questionnaire collected data on frequency of exhibition attendance,purposes of exhibition presence and firm profile. The importance of five activities inthe exhibition value chain ranging from exhibition space to IT facilities weremeasured. The problems caused by 14 obstacles to exhibition organizing ranging fromcultural differences to media coverage were measured. The satisfaction ratings for 16variables ranging from number of visitors to exhibition opening times were measured.Attraction to Dubai as an exhibition city was measured using 16 items ranging fromairport facilities to public transportation. Data on exhibitors from outside the UAE wascollected on hotels, airlines and personal expenditure.

The visitors questionnaire collected data on the purposes of exhibition presenceranging from observation of latest industry trends to getting training. A total of 13items measured visitor satisfaction with the exhibition ranging from exhibitionprogram to the exhibition location and facilities. Visitors were asked to rate Dubai asan exhibition city using 16 items. Data on personal and firm backgrounds andexpenditure was collected in part 3 of the questionnaire. Data was collected by a teamof eight research assistants approaching visitors and exhibitors at the exhibition andrequesting their assistance with answering the questions in the exhibition hall.

Secondary data was collected using global exhibition and tourism websites andsources including the World Travel and Tourism Council and the websites of theleading exhibition organizers and firms involved in value chain activities (such asaccommodation and tourism facilities) in the United Arab Emirates, France, UK,Germany, USA, Singapore and Hong Kong.

Research findingsThe biggest representation at GITEX was from Asia (Table III). The majority ofvisitors are male with only 11 percent of visitors being female. A total of 96 percent ofvisitors are aged between 20-40 and there is a range of managerial levels ranging fromsenior management to sales and marketing represented (Tables IV-VII).

International competitionThe main exhibition cities competing against Dubai include Paris, Singapore, HongKong, London, Frankfurt, Boston, Riyadh, Cairo and Muscat depending on the type ofexhibition involved. Cities such as Singapore and Hong Kong offer a similar type ofenvironment to Dubai; cities in emerging economies offering modern facilities and

Origin of exhibitor HQ %

UAE 6GCC 7Other Arab countries 10Asia 35Africa 3Australia 1Europe 23USA 15

Table III.Origin of exhibitors

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attractive regulations governing sales and finances. Paris and Frankfurt arewell-established exhibition centers in first world economies. They are centrallylocated in Europe and are located in attractive, convenient and stable regions. Riyadh,Cairo and Muscat provide regional competition for Dubai. The leading internationalcompetitor is Paris. The leading regional competitor is Singapore. Figure 1 shows theresults of the survey on the best exhibition cities taken at IDEX 2005.

Factors of Dubai strengths and weaknessesSeveral important strength and weaknesses have been identified for the Dubaiexhibition industry (Tables VIII-XIII). These are as follows:

Gender %

Male 89Female 11

Table VII.Gender of visitors

Job designation %

Owner/partner 12Senior management 22Junior management 18Technical 22Sales and marketing 17Operative/supervisory 9

Table VI.Job designation of

visitors

Age range %

Less than 20 220-30 4130-40 4540-50 950 þ 3

Table V.Age profiles

Visiting from %

UAE 13GCC 22Other Arab countries 14Asia 33Africa 7Australia 1Europe 10USA 2

Table IV.Visitor nationality

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. the reputation of Dubai, tax-free sales and security were identified as majorfactors of strength;

. the infrastructure, location, trade visitors size, exhibition hall size, IT facilities,quality of exhibition manpower, cost of airfare and cost of labor for exhibitionwere identified as factors of strength;

. the cost of exhibition space and the climate were identified as borderline factorsof strength; and

. the “apparently high” cost of living was identified as a factor of weakness.

Figure 1.Top exhibition citiesaccording to IDEXVisitors 2005

Factor Mean *

Tax-free sales 4.05Cost of exhibition space 3.08Cost of labour for exhibition 3.28Cost of living 2.79Quality of exhibition manpower 3.43Exhibition hall size 3.74Location 3.78Trade visitors size 3.77Reputation of Dubai GITEX 4.21Infrastructure 3.84Cost of airfare 3.38Climate 3.07IT facilities 3.63Security 4.03

Note: *A five-point Likert scale was used (5 ¼ very satisfied)

Table VIII.Factors of strengths andweaknesses of Dubai

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Variable UAE GCC Other Arab Asian Africa Australia Europe USA

Promotion for the exhibition 3.20 3.67 4.13 3.88 3.50 3.56 3.75 3.74Number of visitors 3.80 3.50 3.50 3.73 3.50 3.33 3.67 3.58Exhibition layout 4.00 3.67 3.88 3.32 3.50 3.40 3.58 3.45Organisers’ staff performance 3.80 3.33 4.38 3.11 3.50 3.47 3.58 3.47Stand area 3.60 3.83 3.75 3.33 4.00 3.50 3.17 3.47Stand design 4.00 3.67 4.29 3.44 4.00 3.59 3.00 3.55Exhibition location 4.20 4.00 3.38 3.52 4.00 3.17 3.67 3.54Exhibition banners 4.20 3.40 3.67 3.44 4.00 3.53 3.36 3.54Availability of communicationnetwork 3.50 3.20 3.88 2.84 3.50 2.39 3.11 2.96Construction cost 3.0 2.17 2.83 2.93 3.50 2.76 2.92 2.84Space rental cost 3.0 2.60 2.80 2.80 2.70 4.00 2.56 2.58

Table X.Means for exhibitors

from different regions forDubai satisfaction levels

on key value chainactivities

Facility R R 2 Sum of squares F Sig.

Airport facilities 0.069 0.005 2.766 4.31 0.038Accommodation 0.074 0.006 4.657 4.863 0.028Restaurants 0.028 0.001 0.514 0.751 0.386Public facilities 0.058 0.003 2.948 3.394 0.066Domestic transportation 0.108 0.012 12.826 10.335 0.001Public safety and security 0.07 0.005 3.202 4.942 0.026Value for money 0.069 0.005 4.766 4.615 0.032Shopping 0.009 0.000 0.056 0.075 0.785Tourist attractions 0.126 0.016 13.682 15.155 0.000Traffic 0.116 0.013 29.437 13.679 0.000Parking 0.013 0.000 0.298 0.164 0.685Weather 0.049 0.002 3.607 2.476 0.116Culture 0.055 0.003 2.415 3.058 0.081Telecommunications 0.053 0.003 2.187 2.859 0.091Signage 0.031 0.001 0.760 0.974 0.324Nightlife 0.006 0.000 0.024 0.031 0.860

Table XI.Relationship between

satisfaction levels withDubai facilities andvisitor nationalities

Variable B t Sig

Promotion for the exhibition 20.376 20.296 0.222Number of visitors 21.22 20.362 0.724Exhibition layout 0.023 0.071 0.945Organisers’ staff performance 20.355 21.428 0.181Stand area 0.183 0.789 0.447Stand design 20.687 22.083 0.061Exhibition location 0.080 0.199 0.846Exhibition banners 0.133 0.288 0.779Availability of communication network 20.042 20.186 0.856Construction cost 0.198 0.844 0.917Space rental cost 0.135 20.490 0.634

Table IX.Relationship between

satisfaction levels for keyvalue chain activities and

origin of firms’ HQ

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Benchmarking Dubai GITEX against Hong Kong Electronics Fair, CeBIT and CESDubai does not have as much exhibition space as Hong Kong. Also, as the statistics inTable XIV highlight Hong Kong has almost 64 percent more exhibitors than Dubai.

Benchmarking tourism performance for France, Singapore, Hong Kong, UAE,Germany and USAThe performance indicators for the tourism industries in France, Singapore, HongKong, UAE, Germany and the US are outlined in Table XV. The UAE performsmoderately well in projected growth rate (5 percent) or long-term growth ranking(65/174) considering the importance being placed on tourism as a source of revenue.Total employment rate for tourism is average. Hong Kong is ranked 21 and Singaporeis ranked 33.

Hotel costs are compared for different countries in Table XVI, which demonstratesthat such costs are highest in Dubai.

Indicator Paris 2005 Singapore 2006 Dubai 2005

No. of visitors 480,000 81,000 43,000No. of exhibitors 1,926 930 726Countries 88 43 46Cost per sq. m. ($) 331 366 480Day pass ($) 90 20 20Covered exhibition space sq. m. 128,019 60,000 35,000Sales ($) 28 billion 6 billion 21.3 billion

Table XIII.Performance indicatorsfor Paris, Singapore andDubai Air Shows

Facility UAE GCC Other Arab Asian Africa Australia European USA

Airport facilities 4.59 4.60 4.48 4.52 4.73 4.13 4.27 4.58Accommodation 4.42 4.11 4.10 4.12 4.24 3.75 3.95 4.42Domestic transportation 4.29 3.80 3.76 3.72 3.75 3.50 3.72 3.82Public safety and security 4.52 4.40 4.50 4.40 4.46 4.50 4.25 4.17Value for money 3.81 3.71 3.54 3.83 4.20 4.14 3.94 3.50Tourist attractions 4.37 4.24 4.24 4.13 4.30 3.75 3.86 3.75Traffic 2.85 2.62 3.17 2.70 2.44 3.44 2.30 1.08

Table XII.Means for nationalitiesfor significant differencesin satisfaction levels withDubai facilities

Performanceindicator

DubaiGITEX

2005Hong Kong

Electronics Fair 2005Hanover

CeBIT 2005Consumer Electronic GoodsExhibition Las Vegas 2006

No. ofexhibitors 1,163 1,906 6,200 2,500No. of visitors 127,439 47,150 480,000 150,000No. ofcountries 61 15 70 110Exhibitionspace sq. m. 30,436 44,343 498,000 1.6 million sq. ft.

Table XIV.Benchmarking Dubaiexhibition space againstHong Kong, CeBIT andCES

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Benchmarking competitive strengths for Paris, Hong Kong, Singapore and DubaiA comparison of competitive strengths in the key cost and quality indicators of theexhibition value chain is outlined in Table XVII using a qualitative scoring techniqueapplying data gleaned from primary and secondary sources.

DiscussionThe exhibition industry in Dubai needs to provide better value for exhibitors. The bestway to provide this is to focus aggressively on promotion in the short-term anddeveloping brand in the medium term. By advertising, PR, CRM, market research andbrand development, the exhibition industry can provide added value and gain asignificant competitive advantage over international rivals.

Exhibitors can also be facilitated with extensive e-business development to use theinternet more expansively in virtual display, marketing, registration, databasing,shipping, document clearance and information gathering.

Added value can also be provided by keeping rates per sq meter exhibition spacecompetitive and increasing profit on increases in exhibitor numbers. This should retainloyalty of existing exhibitors and attract new exhibitors. Exhibitors in new andemerging markets can provide new business and marketing efforts need to bechanneled to these countries. Multinational franchisers should be invited to submitideas for improving the quality of catering provided at exhibitions.

The global brand of the city’s exhibition can be developed by forming strategicalliances with trade associations around the world. The US market is a lucrative sourceof potential growth and is underrepresented in Dubai. A focus on security is vital inincreasing business in this market.

Visitors from the US were highly unsatisfied with the traffic whilst visitors fromArab countries were almost neutral on this factor. UAE visitors rate tourist attractions

BenchmarkParisHilton

SingaporeHilton

DubaiHilton

Hong KongConrad

HanoverRadisson

Las VegasHilton

Cost per night high season (US$) 310 185 385 340 113 116Cost of six rooms (minimumstay) for six nights (36 roomnights) (US$) 11,160 6,660 13,860 12,240 4,068 4,176

Table XVI.Benchmark of hotel costs– five-star hotel category

Indicator France Singapore Hong Kong UAE Germany USA

Contribution to GDP 11.4 6.4 17.1 12.1 9.3 10.5World rank 5 33 21 38 3 1Total employment 13.8 8.3 15.9 11.7 10.1 10.9Projected annual growth during2007-2016 3.7 6.4 6.9 5 3.3 3.4Rank according to long-termgrowth (ten years) 148/174 17/174 11/174 65/174 159/174 157/174

Note: WTTC countries ranked for growth over the long term out of 174 countries included in thesurvey

Table XV.Benchmarking tourismperformance indicatorsfor France, Singapore,

HK, UAE, Germany, USA

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Table XVII.Relative competitormatrix of key cost andquality variables forParis, Hong Kong,Singapore and Dubai

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highly but visitors from the US ranked the lowest. Public safety and security washighly rated by Arab, Asian and African visitors but rated less on average byEuropean and American visitors. Australian visitors rated domestic transportation thelowest with UAE visitors rating it the highest. Airport facilities are highly regarded byGCC, UAE and USA visitors whilst Australian visitors averaged the lowest ratingalthough the average was still very good. Australian visitors did not appear to mindthe traffic as much as other visitors. Visitors from the US averaged the lowest scoresfor traffic, value for money and safety and these are areas that should be considered ifmore marketing in this region is being considered. Asian visitors rank mid to higherend of ratings and as this group comprises of the majority of visitors this is anexcellent indicator of the high satisfaction levels with Dubai facilities.

The primary advantage for a venue in the exhibition industry is space and Dubai isbuilding Exhibition City at a cost of $2.2 billion. This is due for completion in 2020which will increase its competitiveness greatly. It will be 3 square kilometers in size. Inthe interim, Dubai must plan for growth rates with existing facilities.

Culturally Dubai also must contend with perceptions in the marketplace ofrestrictive practices for women compared with Paris which effects its overall tourismbrand (only 11 percent of visitors to GITEX were women). Dubai scores highly for itsfinancial environment which is attractive for foreign exchange and repatriating salesrevenue. Labour costs are also cheaper than France.

The two primary key success factors for the global exhibition industry are value formoney and size. The two key success factors for Dubai are a wider range ofaccommodation and a solution to the traffic and parking problems. These four factorsprovide the guide for a future exhibition industry strategy. Providing more value andbeing innovative in value creation are key for future development. Certain activitiesprovide opportunities for organizers including marketing of exhibitors before, duringand after the exhibition, better value for money with exhibition space and cost,part-time labor, e-business facilities, networking and tourism facilities.

The time horizon is another factor that must be considered. Choosing a shorthorizon entails forming strategic alliances for quick solutions. A medium term horizonentails developing reputation and brand and a long-term horizon entails investment indevelopment initiatives. The UAE government’s plans for the Exhibition Citydemonstrate significant long-term investment ($2.2 billion) and a strategy already inplace.

One alternative strategy is to develop a low-cost strategy. This would entail beatingall competitors for exhibition cost per sq. meter, entrance costs and costs for travel andaccommodation. Profit margins for the organizing company would be reduced aswould costs associated with labor, the venue, services and all activities in the valuechain. A low cost strategy usually involves eliminating activities altogether andreducing overall quality. However, this would also entail formulating a low-coststrategy for Dubai that is not the preferred strategy in a highly competitive globaltourism market.

The key for Dubai is differentiating it from the competition. Therefore the strategyfor attracting more exhibitors and visitors to the city should be a broad differentiationstrategy and, to the exhibition, a more focused strategy. A differentiation strategymaps out a future plan for the organization of the exhibitions and maps out a futureplan for Dubai in its goal of complementing the growth of the exhibition industry.

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With a long-term strategy of investment in place, it is necessary to complement thisplan with short and medium term objectives. In the short term, exhibitor teams need tobe able to book more competitively priced accommodation for less numbers of daysand bypass traffic.

The power of the supplier in the current market must be reduced and exhibitorsshould be encouraged to bring more employees and build bigger stands. The hotels arecurrently demanding minimum stays of six nights and compelling exhibitors to comein smaller numbers. This is reducing revenue for the exhibition organizers. The hotelsmeanwhile are benefiting greatly from the organization of the exhibition whilst makingno contribution to costs. Accommodation outside of Dubai needs to be developed withdedicated transport to bring people to and from each exhibition.

The traffic and parking congestion needs to be mapped out and planned for.Dedicated buses for exhibitors and transport feeding the hotels will reduce the numberof cars approaching the exhibition areas. However the transportation tradition is notfriendly toward using public transport so it needs to be promoted heavily. ALondon-style high fare imposed within a 3 km radius of the city center will ease thecongestion.

Providing value to customers will be the primary challenge exhibition in Dubai inthe future. Value has been enhanced for exhibitors with increased number of visitorsand sales. Value will be added in the future for visitors with the completion oninfrastructure including increased exhibition space, improved public transportation,more hotels and added tourist attractions. The services provided by public servicebodies such as customs, port authorities, airport authorities, police and emergencyservices is excellent. There is evidence of minor exhibitor problems with staff erectingthe stands and this is an area where quality can be improved by organizers.

Outsourcing is used extensively for human resources. Small management teamsplan the exhibition on an annual basis and then outsource recruitment of temporarystaff as the exhibition date. The main organizing manager remains “hands-on” at alltimes and is available primarily to exhibitors to ensure a high level of CRM. Mostexhibitors communicate by telephone to small organizing team regarding their stand,space, location, banners, product delivery and customs. For organizers seeking toexpand marketing coverage without increasing staff numbers significantly, theoutsourcing of marketing activities is recommended by McGovern and Quelch (2005).This allows the organizing team to focus on CRM.

Benchmarking Dubai against Paris, there is a need to plug the gap in the upper-endof the tourist market with attractions for major public works such as grand museums,art galleries and ornate accessible royal buildings. New attractions focusing on culture,history and art should be close together but positioned around the old part of the cityon either side of the Creek as per the findings of the UAE University surveys conductedin 2005 (UAE University, 2005). The city’s royal status could be emphasized more thanit presently is to add value for visitors. Visitor access to a royal palace and a regalavenue leading up would create value innovation for the city.

This is the key issue identified by Zairi and Ahmed (1999) of “transferability”, i.e.part of the learning process to understand whether the identified practices couldconflict with an existing organizational culture, management style and structure whentrying to transfer competitive practices across cultures, i.e. between organizations indifferent parts of the world. The industry must continue to emphasis value creation

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through innovation in the value chain as recommended by Hansen and Birkinshaw(2007) for sustainable competitive advantage web-sites are used for both B2B and B2Cmarketing and administration.

Future researchSatisfaction with IT facilities is high and organizers use e-business extensively. In thefuture, virtual exhibitions are an activity which would assist the short-termdevelopment of the industry to satisfy demand for more exhibiting space by exhibitors.With every new exhibition aiming to be bigger and better this suggests that exhibitorsfrom all global regions will be returning in greater numbers especially with a lot ofimprovements being carried out in areas such as size and innovation. Future researchshould focus on the integration of technology in the industry with expansion of Dubaiwith studies of visitors and exhibitors post-completion of Exhibition City and thepublic rapid rail system.

Note

1. Business Travel Worldwide, p. 7.

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Corresponding authorColin Butler can be contacted at: c.butler@uaeu.ac.ae

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