Agoracom Blog

Mega projects to catapult Oman’s tourism industry

Posted by AGORACOM-JC at 12:41 PM on Tuesday, November 18th, 2014
November 17, 2014
Muscat – Oman is pushing to boost the tourism sector in the country like never before with a host of measures. This is accompanied by a strong will to develop the necessary infrastructure.

Key policy changes include developing a 30-year tourism strategy that will align the sector’s role with plans for the national economy. The strategy focuses on short-, medium- and long-term strategies and is based on four major pillars, including tourism competitiveness, marketing and product development, governance, education and socio-economic development.

Work on the Oman National Tourism Strategy has already started with the Ministry of Tourism (MoT) awarding a contract earlier this year to a Spanish firm, THR Innovative Tourism Advisors, which is currently conducting a series of workshops all over the sultanate.

Another focus area has been the huge potential of transit passengers.

The national carrier, Oman Air, expects incoming passenger numbers to reach 4.8mn this year. Of these, only 800,000 will be flying to and from Oman, and the airline is looking to attract the remaining 4mn transit passengers for a stopover.

For this, ROP has agreed to issue 72-hour, on-arrival visas to transit passengers from all countries except Bangladesh and Afghanistan. An electronic visa disbursal system will also be introduced in a couple of months that will ease procedural delays.

Tourism in the country has been on a consistent growth path and is poised to witness spectacular development in the coming years to be one of the largest contributors to the economy.

According to the World Travel and Tourism Council (WTTC), the travel and tourism industry in Oman supported 37,000 jobs directly in 2013 and this is forecast to grow by 11.4 per cent in 2014 to 41,000. This is the fastest growth in the Middle East region and among the strongest worldwide.

By 2024, travel and tourism will account for 60,000 direct jobs, an increase of 3.9 per cent per annum over the next ten years.

In line with the nation’s objective to diversify its economy, the Ministry of Tourism actively promotes Oman across the globe boosting the nation’s tourism revenues and targeting the sector’s ten per cent contribution to national gross domestic product (GDP) by 2020.

According to WTTC, total contribution of travel and tourism to Oman’s GDP was RO2.08bn, or 6.4 per cent, in 2013 and is expected to lead the Middle East in terms of growth, rising by 9.4 per cent to RO2.27bn in 2014. The total contribution to GDP is forecast to rise by 5.5 per cent per annum to RO3.88bn (8.2 per cent of GDP) by 2024.

Key indicators such as hospitality and air-traffic data also point towards significant growth achieved this year.

In the first half of 2014, the total number of guests staying at four- and five- star hotels in the sultanate witnessed an increase of 20.7 per cent reaching 368,764. And occupancy rates rose to 64.6 per cent as of the end of June 2014 from 61.3 per cent recorded during the same period in 2013. Total revenues of four- and five- star hotels grew by 8.7 per cent during the same period rising to RO86.3mn. Hotel room capacity is forecast to expand at an annual rate of 5.3 per cent in the next three to four years.

Meanwhile, international passenger arrivals at the Muscat International Airport were up by 6.7 per cent to 2mn passengers in the first six months of the year, compared with the same period last year. Salalah too witnessed a surge of around 75 per cent to cross 50,000 international passenger arrivals during the six months compared to the same period last year.

The government’s increasing thrust on tourism continues as it is takes various steps to further develop the sector.

Omran, the ministry’s investment arm, issued tenders worth RO78mn last year towards the Oman Convention and Exhibition Centre, energy centre, and a parking area in addition to the Traveller’s Oasis project in Salalah worth RO1mn.

Omran is also planning 12 new projects which are under study, including water parks, developing Omani castles and forts and eco-tourism resorts in order to attract and accommodate the rising tourist numbers.

The ministry, along with Omran, is working with Paradores Consultancy, an arm of Spain’s prominent luxury hotel chain Paradores de Turismo de España – which runs 94 hotels set in palaces, fortresses and historical buildings – to transform some of the select group of forts and castles dotting Oman’s landscape into luxury heritage hotel properties.

In addition, Omran earlier this month signed a pact to develop 1.85mn sq m for the eco-themed Ras al Hadd tourism project in South Sharqiyah at a cost of RO250mn. The three-phase project will see construction of an eco-themed resort, hotel and residential villas, a souq, a dedicated centre for wildlife preservation, observation park and a new market area.

Omran and its joint venture partner Muriya are developing at least 18 hotels, which will add over 4,200 rooms in the next four years across the country.

Another mega project, which has been in the works for long, was kick-started in October with a development agreement contract signed between US-based Omagine Inc and the Oman government.

The much-awaited US$2.5bn mixed-use tourism and real-estate project known as the ‘Omagine Project’ will be 60 per cent owned by Omagine Inc’s subsidiary Omagine LLC, and the rest by the office of Royal Court Affairs (RCA) of the sultanate, which will own 25 per cent, and two subsidiaries of Consolidated Contractors International Co (CCIC), which collectively own 15 per cent.

The ‘Omagine Project’ is planned to integrate cultural, entertainment and residential components, including hotels, commercial buildings, retail establishments and more than 2,000 residences to be developed for sale. The project will be developed on 1mn sq m of beachfront land in Seeb.

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