Oman adopts right approach to ambitious tourism targets

Alamy via Reuters

As part of Oman’s Vision 2040, set out in 2021, the sultanate is aiming to build its tourism industry over the next 16 years to attract 11 million visitors annually – more than double current numbers. We think this is ambitious but achievable. 

The Covid-19 pandemic hit Oman hard, putting a major dampener on development. But as with many other destinations, the country’s tourism industry has now recovered to pre-pandemic levels. 

Oman received a record-breaking 4.3 million visitors last year. It is now forecasting growth of over 20 percent for 2024, pushing the number of arrivals to an unprecedented 5 million visitors. These results make the target of 11 million by 2040 possible – if momentum can be maintained.  

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Due to its location, most visitors are from the GCC. But in the last few years India, Germany and mainland China have emerged as source markets. 

For much of the travelling world, Oman is a new and relatively unknown destination. It is socially and economically stable, and offers a safe environment and connectivity, while Muscat’s new airport terminal adds a lot of capacity in terms of international connections. All of these are essential ingredients for a successful tourism industry.  

Many of the GCC states have opted for large-scale projects and big resorts. But Oman has chosen to focus on more sustainable and ecologically friendly options. This is the right choice and acts as a big differentiator to the competition. 

The sultanate could also develop meetings, incentives, conferences and exhibitions (MICE) tourism. A healthy line-up of big events is often helpful to a destination’s marketing efforts. 

The MICE industry contributes more income per visitor than leisure. It also has the potential to expose first-time visitors to a destination, as many delegates return as leisure visitors after a MICE-related trip.

There is certainly space for bigger resorts in Oman and more MICE-oriented development, especially in the Muscat Bay region and Salalah. 

According to a sample surveyed by Costar, which looks at tourism and travel trends, occupancy in 2023 was at around 53 percent in participating properties. This is an impressive 13 percent increase on the previous year.

Oman can refrain from creating giga-projects like its neighbour Saudi Arabia, while focusing on its strengths

As far as supply is concerned, Oman has the lowest proportional hotel supply in the region. According to our research at PKF hospitality, there are only 6.3 hotel rooms per 1,000 inhabitants. In comparison, the UAE, the largest regional player, has 20.1 rooms per 1,000 inhabitants. 

More investment is clearly needed. Oman announced at the International Tourism Exchange 2024 in Berlin that it plans to invest $31 billion until 2040 in tourism. This includes investment in general infrastructure, attractions and services to natural sites, as well as assets such as hotels and lodges. 

A long list of priority sites is included in the Vision 2040 document. The recently signed Hafeet Rail project linking Sohar with Abu Dhabi will, once complete, offer a journey time of only 100 minutes. This will most certainly result in increased traffic from and to the UAE.  

Our research shows that Oman has 75 hotels with 100+ rooms, 81 percent of which are branded properties, with 84 percent managed by a range of international hotel companies.

Muscat and Salalah are both blessed with great beaches and have the capacity for some bigger properties.

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However, in those regions of the country that feature more sensitive natural environments, the focus should be on smaller scale development, in line with the commitment to sustainable tourism.  

The development pipeline is healthy, and a range of schemes are either under construction or in the final planning phase. These projects will add around 11,000 rooms within the next five years.

Most of these properties are in and around Muscat. They include some big names like Anantara, Four Seasons, Mandarin Oriental, Nikki Beach and St Regis as well as a spectacular AIDA resort, perched on a seaside cliff. These promise to add quality and the allure of luxury to the offering. 

Oman is an ideal multi-location destination and already has tried and tested routes that lead from Muscat around the country and its many natural sites, featuring wadis, breathtaking mountain scenery, beaches and turtle breeding sites. 

We believe that cultural, adventure and nature-based tourism with some sun and sand is a good strategy to follow, as Oman positions itself as a boutique destination.

It can refrain from creating giga-projects like its neighbour Saudi Arabia, while focusing on its strengths in existing markets and in those it intends to open for further expansion. 

Nils Heckscher is head of Africa and Middle East at PKF hospitality