Obstacles to Foreign Direct Investment in the Libyan Hotel Sector: A Case Study of the Corinthia Company

Tourism in Libya is considered to be the best long-term alternative as a source of national income to the oil industry upon which the country's economy has long been heavily dependent. Hotels are a key element of the tourism industry. This study focuses on obstacles to foreign direct investment (FDI) in the Libyan hotel sector, because FDI is a necessary element to support the development of Libya as an internationally competitive tourism destination. Specifically, the objectives of this study are developed on page five. This study was carried out in four main stages. The first stage involved an extensive literature review to generate a background and develop a theoretical framework for the research. This study adopted a case study approach (Yin, 2003), incorporating semi-structured interviews and a questionnaire, with a sample population consisting initially of foreign hotel managers, and government officials as a second stage. The third stage involved conducting a further questionnaire and a series of semi-structured interviews with hotel managers, Corinthia hotel staff and government officials to identify key FDI issues within the Libyan hotel sector. The fourth stage provides recommendations intended to help solve the existing foreign investor problems facing the hotel sector and Libya's tourism implementation strategy. The study concludes that there are some major FDI issues facing the Libyan hotel sector, including: economic, administrative, and legal and institutional barriers in areas such as recruitment and selection; skills gaps; inadequate practical training; minimum opportunities given to foreign companies; restriction on the role of the public and private sector in the development of the Libyan Tourism Master Plan (LTMP); shortage of qualified academic staff; outdated curricula; inadequacy of the LTMP; lack of funding of Libyan tourism education; and the lack of co-operation between the hotel sector, tourism education and the government's LTMP. The main contributions of this study include: an understanding of the obstacles that confront FDI in the Libyan hotel sector; the application of factor analyses to build consensus on the essential elements of FDI obstacles within the Libyan hotel sector and the development of a best practice LTMP model. Note: It is important to note that the field work for this thesis, as well as the data analysis and conclusion, was carried out prior to the popular uprising in Libya which began on February 17th 2011