As is the case with most of the states in the Gulf region, Oman is actively working to broaden the base of its economy and to provide employment opportunities to its expanding local workforce. One sector that has been identified as having great potential is that of tourism, an industry that Oman is particularly well positioned to foster.
Slow out of the blocks
In some ways, Oman has been slow out of the blocks in the race to promote itself as a holiday destination, with a separate Ministry of Tourism only established in 2004. That said, the Sultanate already had in place a sound tourism infrastructure and has fast become a serious rival to other Gulf states, such as the UAE, that have also seen tourism as a viable option for their economies.
Market analysts are predicting the Omani economy to expand by 5.9% in 2007, following 5% growth last year, placing it just behind Qatar and the UAE and well ahead of Bahrain, Saudi Arabia and Kuwait. Contributing to the solid growth rates in 2006 and 2007, the tourism sector grew by 16% in 2006 and looks set for a bumper year in 2007.
Oman’s tourism sector launched itself into 2007 on a high, fuelled by strong bookings through the Eid al Adha break, with hotels and resorts reporting a 90% occupancy rate during the holiday.
Oman has joined the regional mania for building whole self-contained metropolises from the ground up, with the announcement of the Blue City project on the coastal region at Al Sawadi. The project, with a total budget estimated at between $15 to $20 billion, will include more than 200 villas, some 5000 apartments, four hotels, golf courses and retail centers.
According to Renny Borhan, senior vice president of Hill International, the US construction firm that won a six-year contract in early January to provide technical advisory and oversight services for the project, the new mega development will be a significant boost to the Omani tourism industry. “The Blue City development will make the country of Oman a major destination in the Middle East,” Borhan said.
Tourism as a cure for unemployment
Oman’s government has identified the labor-intensive tourism sector as a way of relieving the growing unemployment problem. The 2007 budget unveiled by Economy Minister Ahmed bin Abdulnabi Macki on January 7 included a number of large ticket items to boost tourism-related infrastructure. Foremost among these are funding for further improvements to the Muscat Seeb International Airport, as well as consultancy studies for the construction of two new airports. Other general infrastructure projects, including major highway links and water, wastewater processing and electricity upgrades will all have a positive effect on the country’s tourism sector.
In addition, the state has provided the required land and a soft loan of $7.75 million to assist in the development of a golf course, a residential complex and hotels close to Muscat. On January 6, the Oman Arab Bank and Bank Dhofar signed an agreement to finance the residential phase of the project, which has already seen the completion of a series of high-end villas and apartments that will cater to the region’s golf lovers and those from further afield. The course will be fully grassed during 2007 and brought up to international standards, another step in Oman’s campaign to increase its share of the tourism market in the Gulf.
However, while Oman has seen a flourishing of tourism developments in recent years, with many lavish new projects either on the drawing board or set to start construction in 2007, the country has also somewhat sought to distance itself from the luxury brand holidays offered by its neighbors. Omani tourism operators, encouraged by the government, are looking to cash in not only on the sun and fun aspects of tourism but there has also been a strong emphasis on adventure tourism including diving, safaris, off-road driving, trekking, camping and mountain climbing.
