By Oliver Cornock
Regional Editor,
Oxford Business Group
Growing tourism opportunities
Oman has a lot going for it as a tourism destination – pristine natural beauty and authentic Arab culture. All it needs to do is ramp up infrastructure to be on par with the rest of the region

Having adopted a low-key approach to tourism in the past, Oman is currently pushing the industry up its list of priorities. With its host of natural attractions, the country has identified the tourist profile it is seeking to draw and is now busy making the necessary investments to bring infrastructure up to standard.

According to the World Tourism and Travel Council (WTTC), Oman’s tourism sector directly contributed an estimated $770m to the country’s gross domestic product (GDP) in 2007, and some $1.15bn if the indirect economic impact is also aggregated. The WTTC forecasts strong growth in the next decade, which could see these figures touch $1.5bn and $2.5bn respectively. Government figures show that some 1.3m tourists visited the Sultanate in 2006. However, Oman’s tourism strategy means that increasing tourism revenue need not necessarily entail a massive increase in the visitor numbers.

This is primarily because Oman has firmly set its sights on attracting high-end visitors. Looking to its strengths of long, untouched coastlines, dramatic mountain scenery, wildlife, active local culture and varied architecture, it is being promoted as a cultural and natural tourism destination which appeals to a more affluent and often more mature demographic. This strategy is in line with the broader vision of development that the Sultanate’s leadership is pursuing, to gradually open the country up, whilst preserving the Omani culture and relatively conservative way of life. A significant emphasis has been on the preservation of the natural environment, which is, of course, key to developing this type of tourism. Moreover, top-end affluent travellers are not only likely to spend more and stay longer, thus creating the all-important revenue, they are also more likely to be mindful of cultural and environmental issues.

Clearly Oman would not be able to focus on this niche were it not for its relative bounty of attractions from the natural landscape to forts and the seasonal Khareef festival, which is a living tradition rather than a theme-park recreation of an Arabian festival. However, what is currently lacking is the right sort of tourism infrastructure. There are two reasons for this.

Until His Majesty Sultan Qaboos Bin Said came to the throne, the Sultanate was largely closed to foreigners. In the first years of his reign the priority was understandably on building the basics for Omanis, something that was done remarkably quickly by any standards but also meant that necessarily the focus was inward. As a result there were relatively few hotels and connections to tourist markets in the rest of the world. The second factor is economic: The nature of Oman’s oil industry has meant that it has not experienced quite the glut of investment and commercial activity of other states in the region. Due to the higher costs of extraction and refining, Oman reaps oil income windfalls and large inflows of investment only when there is a rise in prices, as there is now. Therefore there has not been as much international business interest in Oman as elsewhere in the region until recently.

So Oman is not in the position to follow the model of Abu Dhabi in using an already developed, relatively extensive business tourism infrastructure and market as a base. Abu Dhabi’s concept of encouraging holiday extensions to business visits as a way of developing leisure tourism would not be viable in Oman.

This is a double edged-sword. On the one hand, Muscat has arguably the best-preserved traditional cityscape of any Gulf capital. On the other, hotels around the city are reporting 90 per cent-plus occupancy rates, and room rates are galloping ahead of improvements in facilities. While almost all Gulf cities are experiencing a hotel room squeeze, Muscat’s problem is particularly acute. And, while business travellers on expense accounts may not be too bothered, Oman can ill afford to see the discerning holidaymakers it aims to attract (and promote the country in their homelands) being put off by paying rates that are deemed expensive.

The government and the private sector are working hard to remedy this, however, with some $5.5bn of tourism-related investment underway. A raft of hotels are being built or planned around Muscat, where the current demand is highest (though some of the resort projects, sold off-plan, have yet to materialise, raising fears of a bubble). Some 16 of these are planned in Blue City, a $15bn development with 16km of coastline 30 minutes from Muscat’s international airport at Seeb. Another will be a spa hotel – again fitting the tourism strategy’s brief – as part of the Yiti development south of the city.

Furthermore, Oman is looking to the opportunities for tourism offered by more remote areas of the country, for example the Musandam Peninsula and Jebel Akhdar. It is also increasingly promoting the region of Dhofar in the far south, where the annual Khareef festival takes place.

Ever since the Gulf countries began promoting themselves as tourism destinations, there has been an unspoken flipside to their proud boasts of “year-round sun”: The sweltering, humid summers in the region, which for a few months put off those tourists wanting to do more with their holiday than shop in air-conditional malls. Again, Oman has fortune in nature. Dhofar is in the only corner of the Arabian Peninsula which experiences the Asian summer monsoon, and therefore has not only lush, green countryside a world away from the desert of the interior, but also has the Khareef Festival to celebrate it.

In 2007, the festival which incorporates folk traditions including dance, music, visual arts and poetry, ran from mid-July to the end of August. A total of more than 350,000 tourists attended the festival, an increase of 23.5 per cent on 2006. Around 184,000 were foreign visitors, many of them from other GCC member states, particularly the UAE.

The Khareef is typical of Oman’s drive to preserve and promote its traditions. It is also indicative of the aspect of its tourism industry that has been overlooked by the media as interest grows from Europe and the Far East – the s mall but very affluent tourism market almost on Oman’s doorstep.

The opportunity to attract Gulf nationals looking for a place where Arab culture has been preserved without aspic, but which remains exceptionally safe and comfortable, is another niche that the authorities are developing. Such is the growing appeal of the festival that seasonal flights are laid on by carriers such as Saudi Arabian Airlines.

Oman’s chosen tourism strategy complements rather than competes with many of the other GCC member states and emirates. It has not set its sights on Muscat becoming another bright-lights metropolis like Dubai; this will not be viable. Nor will it emulate Sharjah’s recent success as an affordable sun-sea-sand destination; it would not be in keeping with the leadership’s vision. Nor is it looking to sport like Bahrain with Formula One (F1) racing and Qatar with its golf and tennis.

There could be a rivalry with Abu Dhabi, which is also targeting well-heeled visitors with an interest in culture, and which is starting to brand itself as offering a ‘unique’ Arabian experience. Additionally, Abu Dhabi will offer attractions that Oman will not (the Louvre and Guggenheim Museums and an F1 track). However, Oman does have myriad forts, traditional architecture and more varied topography and ecology.
But as industry officials in several Gulf countries argue (contradicting claims that they must all compete with Dubai), if tourists visit one country in the region and have a positive experience, they are likely to consider another visit, perhaps to a different country. Therefore the development of the regional tourism sector can benefit rather than impinge on that of Oman.

Oman has the great advantage of its natural, cultural and architectural resources but an almost blank slate in terms of tourism infrastructure. Now, it has both the resources and a strategy to develop the sector and the results are beginning to show. Oman is one to watch.
 

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