Oman: The land of plenty

From its sandy beaches to its mountain peaks, Oman’s landscape is unique but is it enough to rubber-stamp the country’s new title as Arab tourism capital on the global map?
By Sara Anabtawi
Sun 04 Mar 2012 09:17 AM

For years, the sleepy sultanate of Oman has been viewed as something of a secret tourism destination. Whether visitors have watched turtles hatching on the beaches at Ras Al Hadd, or explored the once-lost city of Ubar in the midst of the Empty Quarter, it’s immediately clear that the country does not suffer the difficulties associated with mass tourism in other parts of the world.

Now, it seems, Oman is really pushing to get the word out over its abundant natural beauty. The good news is that the sultanate appears to be on a particularly hot streak.

Not only did the Arab Tourism Ministers’ Council declare Oman as the Arab Tourism Capital for 2012, but the country was also ranked among the 20 top destinations in the world in the latest edition of the National Geographic magazine — the only Arab country to figure in the list.

In addition, Oman’s capital, Muscat, has been ranked the second-best city in the world to visit in 2012 by Lonely Planet, the popular travel guide publisher. Second only to London, the capital beat tourism hotspots including Cadiz, Spain; Bangalore, India; Stockholm, Sweden; and Orlando, USA.

With all the recognition the country has been attracting, pressure has been mounting on Oman to strengthen its preparations for tourism-related events and developments for the year — so the question remains, what will the sultanate do to secure its spot?

“These recent recognitions affirm the strong global interest in Muscat and Oman in general as a leisure, lifestyle and business destination,” says Haitham Mohammed Ghasani, director of tourism promotion at Oman’s Ministry of Tourism. “We expect 2012 to be a turning point in our effort to take the performance of our tourism sector to the next level.”

Oman’s homework has been done and it has drawn up ambitious tourism plans. Despite anti-government protests that have swept through the Middle East this past year, and the impact they have had on tourism and investor confidence in the region, 2012 looks like being a year of recovery.

Studying 30 locations around the country for their potential to be developed into tourism resorts and attractions, the sultanate is setting sights on attracting 12 million visitors a year by the end of the decade.

Such locations include the Al Hoota, Majlis Al Jinn (meeting place of the jinns) and Suhoor cave complexes, says Ghasani. It’s a little-known fact, but Oman boasts some of the largest and most extensive cave chambers anywhere in the world.

Plans are also in the pipeline for the construction of an archaeological park and a museum at the recently discovered Friday Mosque in Qalhat (near Sur), which was built around 1300 AD.

Article continued on next page

In terms of more modern tourist draws, Oman opened the Royal Opera House in Muscat last October. It is also aspiring to attract more visitors when it completes a $1bn tourist resort in Salalah and the $1bn Oman Conference and Exhibition Centre in Muscat, which is due to open late 2013. The latter represents a clear push towards the lucrative business travel market.

“Oman received some 1.6 million tourists in 2010 and Oman’s Ministry of Tourism aims to increase this figure to an ambitious 12 million per annum by 2020. Such aspirations clearly show the country’s goal to develop as a major tourist and business destination,” says Mark Walsh, a group exhibitions director at Reed Travel Exhibitions.

In an effort to boost tourism and draw different nationalities into the country, Oman recently slashed the cost of its tourist visas by up to 75 percent.

New entry tourist visas, valid for ten days, will cost OMR5 ($13), as opposed to a previous OMR20 ($60), while cruise visas for up to 24 hours will be free or charged at OMR5 ($13) for multiple visits. The cost of a single-entry visa, valid for one month, will remain the same at OMR20 ($52).

Fuelling travel and tourism are essential to the growth of the local economy. The sector is expected to contribute up to three percent of Oman’s GDP for 2011, a number that will rise to 5.4 percent by 2012, according to the World Travel and Tourism Council. In addition, the high-growth industry is also expected to provide direct employment for 50,000 locals and expatriates by 2021, the travel organisation said.

A key factor in Oman’s growth as a tourism destination is its position as a port of call for many cruise companies. Muscat’s cruise ship passenger arrivals increased to 230,000 during the 2010/2011 season, up from just 44,000 in 2007. This is expected to exceed 300,000 by 2015. Large goals equal large numbers.

“The new cost of visas is expected to boost tourism,” says Maitha Al Mahrouqi, undersecretary at the Ministry of Tourism. “The changes will be welcomed by the global travel and tourism trade. The changes make Oman very attractive for the growing stopover, business and cruise passenger segments — areas of great potential.”

The ministry has also paired up with Oman’s national carrier, Oman Air, to introduce a high-value stopover campaign, which is now available for all fare classes across Oman Air’s international network, and which can be sold by travel agents.

Kanoo Travel’s Sunil D’Souza says that Oman is the most popular destination for Gulf residents, followed by Bahrain.

“Oman is the most sought-after rest-and-recuperation destination,” says D’Souza. “In terms of tourism numbers to Oman, it has gone up by 32 percent from last year.
From our experience, we have a lot of Western and Indian expatriates [who choose to] travel to Oman.”

Article continued on next page

But despite the ministry’s efforts to boost numbers and paint a promising picture of large, developing projects, Chiheb Ben-Mahmoud, a hotel analyst at Jones Lang LaSalle, says the reality is not quite so rosy.

“We see financial constraints,” says Ben-Mahmoud. “It is not only Oman, but globally, financing is tighter.”

In particular, the analyst points towards integrated tourism complexes (ITCs), which give ownership rights to non-Omanis.

“There are five or six major ITC projects in Oman; the pipeline focuses on these mega projects,” he says.

Some of these include Jebel Sifah, a colossal hotel complex south of Muscat which opened its first boutique hotel last year.  Others are The Wave, a luxury housing project resort in Muscat itself, and Salam Yiti, a $1.7 billion project being developed by Sama Dubai.

“The Wave is in progress,” says Ben-Mahmoud. “Jebel Sifah … [is] going ahead, however, at a lower pace than originally planned.”

Some of the other projects, however, are on hold. Perhaps most spectacular of all is Blue City, once touted as the biggest real estate project in the country. However, work at the $15bn development, which was set to feature 20 hotels, stalled as a result of shareholder squabbles and a lack of investor interest.

“Given the size of these projects, they affected the pipeline of Oman’s hotel and tourism sector… I think that initiatives are being taken on a more localised scale rather than the big initiative,” adds Ben-Mahmoud. “Megaprojects are now more difficult to put together financing for.”

Hope, however, is clearly on the horizon. Ben-Mahmoud describes Oman’s hotel and tourism sector as one that is in strong recovery mode, while adding that investors are clearly aware of the country’s lucrative tourism potential.

But what trends are existing hotels seeing right now?

Christoph Franzen, the general manager at the Grand Hyatt Muscat, points out that it’s too early to tell what sort of effect the ministry’s bid to tempt tourists will have on the sector.

Article continued on next page

“[The efforts will work] maybe not so much in terms of getting thousands and thousands of room nights, but it makes people more aware of the destination,” he says.

“The impact we felt so far for business hotels is not very [apparent], but [the Ministry’s campaign to boost tourism] has just started. I am very confident this will change. I would say leisure hotels will have bigger benefit than us … but it will definitely increase the visibility of Muscat and Oman in general in the Arab world.”

Looking at the Hyatt’s occupancies since the beginning of 2012, they are on a par with last year.

“We were actually 80.7 percent last year and this year, [the numbers are] exactly the same. Not a single drop, it is fantastic,” Franzen says.

However, the luxury five-star location did suffer a fall in visitors during the protests that affected Oman and other countries of the region last year. “We lost about 40 percent of our business at the time,” he adds.

Is Franzen worried about the huge number of hotels that will be opening in the coming years?

“Don’t forget, a lot of projects have just kicked off,” he points out. “We have a few open here in the city, but nothing really major…but it will happen in the next three or four years. We have from the Fairmont to the Kempinski to the Ritz Carlton. There are a lot of projects in the pipeline.”

Given the difficulties of last year, then, perhaps 2012 will be the year when Oman truly cements its place among the planet’s favourite destinations.

“Oman has a fantastic scope and opportunity for eco tourism… It has lovely natural wadis, beautiful beaches, islands and mountain regions,” says D’Souza.

Ben-Mahmoud is on the same page: “Oman has a lot of potential … because of its natural setting, location and landscape. It is a global destination associated with Sinbad the sailor, so it has very strong attributes and tour operators are always trying to identify new products for their market there.”

For them, and hopefully for adventure seekers all over the world, Oman still represents a strong proposition.

Subscribe to our Newsletter

Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.