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Travel & Tourism in Region Positive & Emerging Oman Leads the Region in Diversifying Its Economy

Date: 16 Jan 2010
Usama Bin Karim Al Haremi

Prospects are bright for tourism development in the Sultanate; moreover, tourism in Oman is becoming an increasingly important industry, with mega projects mushrooming to elevate Oman on the world's tourism map. The government has been actively making efforts to tap tourism's potential, and with improved product development, enhanced funding for tourism, an increase in marketing and promotion, all have facilitated the task and helped to secure good return on investment.

Usama Bin Karim Al Haremi of Oman Air's Corporate Communications and Media informed that Deloitte, one of the world's top accounting and professional services firms announced recently that despite a fall in hotel occupancies in most countries in the Middle East region in 2009, the outlook remains positive as GCC countries are expected to continue economic diversification away from oil based activities and attract significant investments.

Robert O’Hanlon, partner tourism, hospitality, and leisure Deloitte Middle East said that the travel and tourism economy would emerge as a significant contributor and a beneficiary of increasing economic activity in the region. Oman, O’Hanlon stated, stands out among the key players in the region, who have invested early and are well placed to reap benefits in the years ahead.

He also highlighted that Oman, which was the first country in the GCC region to diversify its economy, continues to be dedicated to economic diversification to reduce its dependency on oil-based activities.

Tourism, O’Hanlon added, has been a key pillar of the economy and the continued dedication of the Oman Ministry of Tourism to develop this sector stands unchallenged. The travel and tourism economy is forecasted to expand at an annual rate of 7.8 per cent during the years 2009-19, placing the country in the spotlight in the entire Middle East region, he said.

In this regard, Al Haremi highlighted that Oman Air is continuing to unveil new products and services in a bid to support the country’s tourism growth. The network expansion and Oman’s tourism growth he said are closely linked. The expansion is part of Oman Air plans and strategies to promote and activate tourism movement to the Sultanate, through connecting Muscat to a number of tourism countries and capitals, to make it the destination of choice for tourists in their way from or back home.

Operating direct flights between Muscat and various capitals around the world he added, comes in a bid by the company to promote Muscat and place the Sultanate well on the world tourism map by promoting and marketing the tourism potentials in the different parts and regions of the sultanate.

Al Haremi further affirmed, that the political and economic stability witnessed by the Sultanate since the dawn of the Blessed Renaissance and good hospitality, made tourism a constantly growing sector, contributing greatly to the national economy and the development of the Omani society. However, he clarified; the government has given priority to the tourism sector since the beginning of the 1990s.

Usama Bin Karim Al Haremi of Oman Air's Corporate Communications and Media also acknowledged that Euromonitor International's Travel And Tourism in Oman report published in June 2009, highlighted that on a regional front, the Middle East’s investment in travel and tourism is expected to skyrocket over the forecast period, as at least US$1 trillion is to be injected into hotels, resorts, attractions and associated infrastructure between 2007 and 2020. The report mentioned that Oman holds a considerable share of this capital injection, as HM Sultan Qaboos bin Said and the Omani government has allocated an appropriate budget to take the sultanate’s tourism objectives forward. The government’s budgetary efforts were further complemented with the amending of a number of laws and regulations to attract FDI into the vibrant travel and tourism industry, where all such efforts are part of Vision 2020, the report stated.

Despite the global financial crisis, which ripped many of the world economies, Oman went ahead with the implementation of its tourism plans and programs as per the set timetables. This points out that the crisis did not affect the implementation of the tourism projects in the Sultanate.

A number of tourism projects are currently being implemented which are at various stages, including 12 five-star hotels to be developed in the next four years.

It also aims to increase the number of hotel rooms to 16,000 by 2010 and tourist stay to five million by 2020.

On schedule are the development of three hotels, which are part of the prestigious Salalah Beach project, and a tourism project at Ras Al Had, a joint venture with Al Diyar of Qatar.

Under construction is the Convention and Exhibition Centre, which is expected to have multiplier effects on the economy, giving a fillip to MICE (meetings, events, exhibitions and conferences) market in Oman. The project allows the country to bid for major regional and global business events and meetings.

The GDP of the sector (value-added) rose from 54 million rials in 1990 to 164 million rials in 2008, with an average annual growth rate of 6.4 per cent. The number of hotels and hotel apartments has increased from 30 in 1990 to 195 in 2008, with an average annual growth rate of 10 per cent. The number of rooms has stood at 10, 000.

The findings of a survey conducted by the Ministry of National Economy and the Ministry of Tourism, with technical help from the World Tourism Organisation found that the sector contributed about 3 per cent per annum to Oman’s GDP from 2005 to 2008. The total value of revenue from hotels and restaurants in 2008 reached 164 million rials, with a relative increase of 0.7 per cent. Hotels, restaurants, airlines and travel agencies, tourism and car rental companies and diving clubs increase the sector’s contribution to GDP significantly.

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