Oman tourism goals face an uphill road to success

May 29, 2023

Summer, Architecture, Building — Oman wants to grow tourism’s GDP contribution from 2.6% to 6% by building new hotels and promoting destination 'clusters'

Oman Vision 2040 aims to attract 11.7m visitors, from 2.6m in 2016
Hotel revenues up 50% in March, tourist arrivals hit 2.9m last year
Sultanate faces twin challenge of competition, connectivity

Mounting competition from Saudi Arabia, limited connectivity and a low profile are among the challenges to Oman’s progress on meeting its 2040 tourism goals.

“We’ve done great [as an industry] but I think we can do better,” said Amir Golbarg, senior vice-president of operations, Middle East and Africa, at Minor Hotels.

“With its landscape, people, flora and fauna and indigenous goods like pomegranates, Oman can offer a lot more than most of its neighbours can.”

In 2016 Oman launched a 25-year strategy to increase the number of tourists to 11.7 million per year by 2040, from 2.6 million in 2015.

It wants to grow tourism’s GDP contribution to 6 percent, from 2.6 percent, by building new hotels and promoting destination “clusters”.

Oman’s Vision 2040 economic plan has allocated 20 billion Omani riyals ($51 billion) to further grow the tourism sector.

It’s making progress. The number of visitors to the country grew by 348 percent year on year in 2022 to 2.9 million, driven by the GCC, Egypt and India, according to government data published in April.

The figure represents a solid post-pandemic uptick, but remains below the 3.5 million recorded in 2019.

Getting noticed

Oman is the third-largest GCC state by population, after Saudi Arabia and the UAE. Its tourism industry is based on its nature offering, beaches and business travel in in Muscat.

It is, however, the GCC’s second-smallest economy. Because of this – and perhaps because of its reserved, quiet culture, experts say – Oman has struggled to pin itself on the global travel map as deeply as its neighbours have.

The 2040 strategy is intended to change this. The government said last year it had secured more than half of its targeted tourism investments for 2021-2023, and last month it approved 363 tourism projects worth OMR2.29 billion, adding to the OMR700 million of hotels, cultural sites and other attractions in development.

Among the projects are more than 40 ‘adventure tourism’ initiatives, including ziplines, cable cars and walking trails.

Minor Hotels’ Amir Golbarg says that Oman ‘can offer a lot more than most of its neighbours’

In April, Oman extended visa-free entry to 103 nationalities. Official statistics published that month showed that three-to-five-star hotels saw a 49.9 percent annual increase in revenues to OR73.3 million in March.

The number of hotel guests grew 25.6 percent to 522,753 and occupancy stood at 56.4 percent – below pre-pandemic levels, but the industry was pleased.

“It is very positive to observe the increase in demand and rate levels and our hotels are experiencing higher occupancy levels as a result,” said Paul Stevens, chief operating officer, Middle East, Africa & Turkey, in Accor’s premium, midscale and economy division.

Accor has three hotels (Novotel, Mercure and Ibis) in Oman totalling 537 rooms, and plans to open six more – 1,345 rooms – by 2025.

“Oman remains an important market in our development plans,” Stevens said.

Travel app Wego has recorded 105,000 Oman hotel searches this year, up 23 percent from the same time in 2022.

Mamoun Hmedan, chief commercial officer and regional managing director, said the sultanate’s tourism initiatives, solid infrastructure and streamlined visa process “are increasing its popularity as a global tourism destination”.

Obstacles to overcome

One obstacle, however, is neighbouring Saudi Arabia’s plan to massively expand its tourism offering, having opened its doors to the world for the first time in 2018. Under Vision 2030, it aims to attract 10 million visitors a year.

“Oman has historically positioned itself as the only destination in the Gulf that offers mountainous terrains, stunning beaches and vast landscapes but Saudi Arabia has those things,” Golbarg said.

He added that Oman should ensure “it gets the message across internationally that it has been at the forefront of that offering”.

Oman tourism Minor Hotels Anantra — Oman is capitalising on its mountainous landscape to draw tourists to resorts such as Anantra

The sultanate also needs to link up key destinations with travel hubs and increase flights to and from the country, and then promote those places.

“The vision is there, sometimes the execution needs more,” said Goldbarg.

Minor Hotels has three properties in the sultanate – Avani Muscat Hotel & Suites and the Anantara resorts in Salalah and Jabal Al Akhtar – and is due to open the Tivoli Muscat Hotel & Residences in 2026.

It is exploring further sites around Muscat and Musandam and also looking at opportunities for ‘glamping’ – an untapped market in Oman. Annual portfolio revenues are up 22 percent this year.

Oliver Cornock, editor-in-chief of Oxford Business Group, added that Chinese tourism could be a strong source market.

“We see a positive outlook for Oman and the numbers of hotels and attractions being developed will further enhance its appeal.

“Investors will always look to a clearly delineated policy and straightforward processes and with these in place the prospects are good.”