An Investigation of the Dynamic Relationship between Tourism Expenditure and Non-Oil Growth with the Planning of a Blue Ocean Strategy: The Case of Libya

The aims of the thesis are to investigate tourism led non-oil growth (TLNOG), for Libya, and to identify the factors that will help to increase this growth through creating and implementing a Blue Ocean Strategy (BOS). These are three research questions: (1) Is there any relationship between tourism expenditure and non-oil GDP in Libya? (2) Is there any causality between these two variables? (3) How to resolve and recover the particular case of Libyan tourism growth through the BOS? Firstly, the research estimated the potential of tourism by using the Auto Regressive Distributed Lag (ARDL) co-integration model proposed by Turner (2006) to ascertain the long-run relationship between tourism expenditure and non-oil growth. Then, semi-structures interview questions based on the Eliminate-Reduce-Raise-Creative grid (ERRC) (Kim & Mauborgne, 2005b) were dismissed to five kinds of stakeholders (consultants, public promoters, hoteliers, tour operators and tour guides). This study indicates that the long-run relationship is verified between the variables and there is one long run causality. The findings show the BOS through: (a) value innovation by offering special services and packages in hotels (e.g. planning healthy food for special events); (b) technology innovation linked to museums considering people with special needs; (c) cost-off by reducing the prices of the tourist restaurant and internal flights; (d) new segment market by creating the North and South Mediterranean tourism. Finally, the BOS as a recovery strategy by adopting tourism culture and choosing the desert as the main theme for Libyan tourism. The study concludes that TLNOG is not verified, and the growth in the Libyan tourism market could be achieved through the application of thoughtful and appropriate Blue Ocean Strategy.