The motivational factors for Foreign Direct Investment (FDI) in Tourism in Libya

Foreign Direct Investment (FDI) is one of the most effective ways by which developing economies become integrated with the global economy, as FDI provides not only capital but also the technology and management expertise essential for restructuring firms in the host economies. Multinational companies (MNCs) have played a significant role in the development and continuity of the travel and tourism industry throughout the world. The presence of these companies in the accommodation sector continues to increase. In some countries, MNCs represent 70% of the total number of hotel companies. However, the MNCs in Libya make up less than 1% of the total number of Libyan hotel companies. \n Although Libya has demonstrated various initiatives to solve the hotel problem, it could not overcome this dilemma on its own. Some analysts argue that this problem could be solved by international cooperation. In light of this fact, Libya has started a new era of openness and cooperation and has issued several important laws to attract foreign investment in order to facilitate solutions to its problems, including the tourism sector. \n An exploratory methodology was adopted in this research, and multi-methods (qualitative and quantitative) were used to analyse multi-sources of data that comprise semi-structured interviews, questionnaires, literature, and official documents. Triangulation analysis has been employed which is appropriate for multi-source data. \n \nThe study findings generally confirmed that: \n \n \n•\tThe Libyan government should make its investment climate more attractive for foreign direct investments by means of wide and deep reforms, in this respect the government should know that the major obstacles that FDI investment in tourism in Libya has faced since 2011: were: security situation, political stability, lack of investment in infrastructure and local investment policies; \n \n•\tThe government of Libya should adopt a clear policy towards MNCs which invest in the tourism sector and this policy should be transformed into a comprehensive plan; \n \n•\tForeign investors desire to invest in Libya when they know the nature of the investment environment because this will lead to maximizing their profits; \n \n•\tDealing with the tourism sector will provide the opportunity for foreign investors to enter other sectors such as infrastructure.