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Apr 28 2008

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Oman: Tourism

Tourism

Oman's varied and beautiful topography gives the country substantial potential for the development of tourism, and visa restrictions have been gradually eased since the early 1990s as part of the government's campaign to encourage this sector. Joint visas are now available in programmes with Dubai and Qatar. Airport data for international arrivals suggest that visitor numbers strengthened until 2000, before stagnating in 2001 and declining in 2002 as the full impact of the September 11th attacks on the US fed through to the local tourism market. Recovery started in 2003 and 2004, with arrival numbers increasing by about 15% and 20%, respectively. In 2005 they rose by a smaller but respectable margin of 7%. There has been an increasing focus on culture and leisure activities, with the number of tourists and official delegates visiting castles and forts increasing by 15% in 2006, compared with the previous year.

The country's tourism infrastructure has also been growing. In 1998, Oman had nearly 90 hotels with 6,500 beds, which had increased to 172 hotels with over 13,300 beds by the end of 2006. Tourism development remains focused on the capital, with almost 42% of hotels (and 54% of beds) located in the Muscat area—including all but one of the country's six hotels rated as "five star". These facilities are being supplemented by a number of large tourism projects. The US$200m Shangri-La Resort and Spa at Barr al-Jissah , developed by the local Zubair Corporation in partnership with the Omani government and managed by the Shangri-La Hotel Group of Hong Kong, opened for business in 2006. In December, The Wave , a larger, US$779m development, which will stretch along 6 km of sandy coastline adjacent to Seeb airport, sold 151 villas and townhouses. The first phase of construction is expected to be completed, and the first batch of residents to move in, by 2008. Meanwhile, Oman's largest tourism and real estate project, Al Medina a'Zarqa (the Blue City), came a step closer to reality in mid-December 2007, when the sultan's representative, Assad bin Tariq al-Said, laid the foundation stone in an opening ceremony. The 32-sq km development, which is to be built on the coast between Muscat and Sohar, will create a new city of more than 250,000 people at a cost of some US$20bn.

Broadening Oman's appeal

In addition to these luxury real estate developments, the government is also seeking to expand tourist attractions. In December 2006 the Al Hoota cave complex in the Dakhiliya region was opened to tourists, as part of the government's strategy of encouraging tourists to venture beyond Muscat in order to foster countrywide growth. Similarly, in January 2007 the heritage and culture minister, Haithem bin Tariq al-Said, laid the foundation stone of a new National Museum in Old Muscat. The OR15m (US$39m) project, which is expected to open in 2010, will cover an area of 20,000 sq metres. The siting of such a prestigious project in the tiny old capital appears to be an attempt to breathe life back into an area that has become dominated by government and palace offices over the past 20 years.

The government has also signed a Memorandum of Understanding with the Al Diyar Real Estate Investment Company of Qatar for the construction of a resort including beach cabins, a five-star hotel, restaurants and entertainment facilities. The resort, at Ras al-Hadd, an area known for turtle nesting, is likely to try to expand Oman's eco-tourism appeal. Other less-frequented locations are also being slated for development, including a US$27m Evason Hideaway near Dibba on the Musandum peninsula, which will be owned by Six Senses Resorts and Spas of Thailand and a local firm, Al Marsa Travel and Tourism. It will officially open in April 2008. Finally, capitalising on the industrial growth of Sohar, an Omani company, Real Estate Portfolio, launched Al Badia, a residential project consisting of 73 villas and a private sports club at a cost of OR4.6m. Kuwait-based Al Mazaya Holding will have a 40% stake in the portfolio and will be responsible for the development and marketing of the project.

The government's interest in tourism is twofold: it recognises that the sector could provide a non-oil source of foreign exchange, and it hopes to tap its labour-intensive character as a potential source of employment for young Omanis. Underscoring the seriousness with which Oman is approaching the issue, Sultan Qaboos bin Said al-Said created a new Ministry of Tourism in mid-2004, which took over the work of a directorate-general of tourism at the Ministry of Commerce and Industry. However, the government is also concerned that an influx of large numbers of Western package tourists might offend the sensibilities of more conservative Omanis. These concerns are also reflected in the government's approach towards issues such as the sale of alcohol (which is legal in certain circumstances but heavily taxed).

Policymakers are therefore focused largely on the high end of the market, attracting a smaller number of wealthier visitors from the US and especially from Europe. (Some 35% of hotel guests in Oman in 2006 were Europeans.) The annual Muscat Festival, held in January and February, and the Khareef Festival, held in August in Salalah, also present an opportunity for the government to attract visitors from neighbouring Gulf states, who constituted 32% of hotel guests in 2006.