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Plan B: Oman looks at tourism as oil revenues drop

Jun 18, 2016

MUSCAT, Oman - Tourism certainly has the potential of taking over the burden of powering Oman’s economy and replacing its dependence on income from oil.

Oman is the second country in the Gulf Cooperation Council (GCC) states, after the United Arab Emirates (UAE) that welcomes an increasing number of tourists every year. Out of the 9.3 million passengers arriving in the country in 2015, about 36 percent were tourists.

At the moment, the share of the tourism sector in the Gross Domestic Product (GDP) is 2.2 percent. The good news is that according to the latest report of the World Travel and Tourism Council (WTTC), the tourism industry’s contribution to the GDP is expected to rise by an average of 6.1 percent annually by 2025. The sector employs about 44,500 workers, mainly in hotels, tour and travel agencies. Many experts now believe that the Sultanate has the ability to create a chain of key values in tourism to wipe out reliance on crude oil as the primary source of revenue.

The national heritage and its natural beauty are two areas that are most qualified to expand the wider area for both domestic and international investments. Oman is famous for its United Nations Educational, Scientific and Cultural Organisation (UNESCO)-recognised heritage sites, white sandy beaches, rugged mountains, old souqs and the royal opera house in the capital. The southern city of Salalah attracts a million tourists a year from GCC countries in the summer months from July to September during the Khareef season.

The government has already unveiled plans to construct new resorts to cater to the rising number of visitors. The Oman Tourism Development Company is working on a plan to establish 12 new tourism projects across the nation. These projects include water parks, the renovation of castles and forts and building eco-tourism resorts. However, some experts feel that most of Oman’s tourism spots are neglected despite the efforts of the government to expand the sector. They blame the private sector for not taking the lead in developing the industry. On top of that, corporate lending is not supporting the drive to bring in more tourists that would lead to a greater degree of employment.

For the sector to grow rapidly, tourist companies need to be adequately funded to raise their contribution to higher levels. The government has created ample investment opportunities in the past, but the cash-strapped private sector cannot strive because the local financial institutions do not believe there is serious potential in the tourism business. Apart from the heritage point of view, tourists come to Oman for sports, such as rock climbing, snorkelling, trekking and windsurfing, but this is an area that has experienced slow growth in development due to a lack of financing.

While the government is working on building infrastructure, such as hotels and large resorts, the real success largely depends on small tourism companies and how they sustain their business. The campaign “Make Oman Your Next Destination Choice” can really work provided local companies get the support they need. It is obvious that the diversity of nationalities coming to Oman is increasing every year, thanks to the Ministry of Tourism’s international marketing campaign, but the challenge is to ensure a steady growth in the industry. To become a major contributor to the economy, tourism’s dynamics must change. Business attitudes need to change as well.

Young entrepreneurs need to understand the magnitude of the task and benefits of running a successful tourism business. In this respect, there is a need to educate the would-be entrepreneurs that Oman can no longer guarantee jobs for its local people the way it used to in the past. They need to know tourism could well be Oman’s economic Plan B that would effectively counterbalance the financial problems stemming from lower oil prices.

Plan B: Oman looks at tourism as oil revenues drop

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