Oman makes play for Middle East tourism role

Oman makes play for Middle East tourism role

The charm of the Sultanate of Oman’s landscape, its people and rich history has long made it a favourite with visitors, yet it remains a lesser-known jewel in the Gulf region.

Government officials are hoping to change that, making public commitments to thrust Oman onto the world stage and whet the appetite of hotel investors and international operators hungering for new global hot spots.

“Oman offers a unique product in the Gulf Cooperation Council in terms of climate, charm and opportunity.

“Its diverse landscape, pristine beaches, government initiatives and potential for growth have attracted interest from near and far and from different sectors of the industry.

“There is much potential for growth in Oman, and we are keen to be part of it,” said Elie Milky, director of business development for Middle East/Africa at the Rezidor Hotel Group.

The Omani government’s Vision 2020 plan, created in 1995, is ambitious: increase its room count to 20,000 rooms by 2015 and welcome 12 million visitors annually by 2020, an increase well above its 1.5 million visitors recorded during 2012.

The government has since issued a more concrete five-year plan outlining strategies from 2011 to 2015 to help reach that larger goal.

There are 62 hotels with 7,636 rooms open in Oman, according to STR Global, sister company of Hotel News Now.

Hala Matar Choufany, regional managing director in Dubai at HVS Global Hospitality Services, believes reaching the 20,000 target is not impossible.

“Approximately half of the projects would be completed and operational in 2015.

“The confirmed branded supply is nearly 4,000, and it is likely that more announcements will be made therefore reaching 20,000 rooms by 2018,” she said.

Four hotels with 583 rooms have recently opened in Oman, according to STR Global.

A further nine hotels with 1,628 are under construction. In total, 4,577 rooms are under various stages of development in the total active pipeline.

Confirmed supply includes offerings from Rotana Hotel Management Corporation; Kempinski Hotels; Fairmont Hotels & Resorts; Ritz-Carlton Hotel Company; The Rezidor Hotel Group; Millennium Hotels and Resorts; Alila Hotels & Resorts; InterContinental Hotels Group; Anantara Hotels, Resorts & Spas; LVMH Hotel Management; Starwood Hotels & Resorts Worldwide; Angsana Hotels & Resorts; Shaza Hotels; and Marriott International.

According to figures from property consultant Cluttons, the number of hotel rooms in the Muscat governorate could reach between 5,000 and 6,000 by 2015, ranging from three- to five-stars.

The ministry of tourism forecasts 3,000 rooms to open by end of 2014.

Meanwhile, PKF The Consulting House’s MarketMirror, which cites third-party data in addition to its own research, projects that Oman’s overall room count will double during the next five years to approximately 7,800.

Infrastructure upgrades

The government has been investing in tourism under its 2011-2015 plan to bring infrastructure and services up to par, including plans to spend $3 billion during the next three to four years, according to MarketMirror.

The ministry of tourism was scheduled to close on October 9th a public tender it issued in July this year calling for consultancy services to help with the next steps of the Sultanate’s long-term tourism strategy.

Furthermore, large sums are being spent to allow for an inflow of visitors to the Sultanate, such as $6.1 billion into the expansion of its international airports.

Salalah Airport will be able to handle one million passengers with room for further capacity of up to six million.

Muscat International Airport’s new terminal will be able to handle 12 million passengers when it opens next year, with plans to expand annual capacity to 48 million passengers.

Hotel occupancy during the first eight months of the year was up 9.6 per cent to 57.1 per cent, according to STR Global.

Average daily rate and revenue per available room, in Omani Rial terms, were up 4.8 per cent and 14.9 per cent, respectively.

While development of the city has been slower than anticipated and the 2020 vision seems aspirational, Choufany said there has been substantial improvement in the tourism infrastructure, including upgrades to road infrastructure and airports as well as the development of Oman Convention & Exhibition Centre.

The exhibition centre, with a 3,200-seat auditorium, is set to open in 2016 alongside four hotels.

“These efforts have translated into a yearly growth in both occupancy and average rate in the city, and we anticipate further solid growth in the near to midterm,” Choufany said.

“Oman has fared quite well historically. Any improvements will impact positively the hospitality market. There is, however, a need to develop the recreational offering in Oman and Muscat specifically, as this is currently lacking.”

The World Travel & Tourism Council expects the tourism sector to contribute 9.9 per cent by 2019 to the Sultanate’s gross domestic product, up from 6.7 per cent in 2009.

And according to a Business Monitor International forecast, tourist arrivals to Oman will increase to nearly 1.45 million, or by 38.7 per cent, and tourism spending will close to double to near $3 billion by end of 2017.

Integrated tourism complexes

Despite so much focus on infrastructure, the government is not losing sight of its original mission and what attracts many to the country in the first place: to develop sustainably, maintaining the country’s natural charm and authenticity, looking as much after its World Heritage Sites, its numerous forts and castles as its beaches, mountains, deserts and unique green Dhofar.

“Oman is rich in natural beauty and like its neighbour the United Arab Emirates, year-round sun and a safe and welcoming environment for tourists.

“The government investment in improving the tourism infrastructure has been an integral part of raising the profile of the destination, and there is certainly more potential in the country for tourism than just Muscat,” said Ulrich Eckhardt, president of the MEA and India regions for Kempinski, which is developing the 309-room hotel in The Wave integrated tourism complex.

The Sultanate indeed is focusing on further developing its ITCs, which usual contain residential and hospitality components, as well as niche projects.

Omran, which manages and develops the government’s tourism projects, is taking the lead and working on resorts in Khasab and Jebel Akhdar to open next year.

Omran also has embarked on other projects in Muscat and Salalah.

The Muriya Tourism Development Company, a joint venture between Omran and Orascom, is developing an ITC project in Jebel Sifah, not far from Muscat, along six-plus kilometres of coastline and beach.

It isn’t quite clear what’s happening at the multi-billion-dollar Al Madina A’Zarqa (formerly known as Blue City), a huge project less than an hour from Muscat, which was developed by Al Sawadi Investment & Tourism Company.

The only ITC where residential and hospitality are at an advanced stage is The Wave Muscat, which will host a Fairmont and Kempinski.

“Kempinski has followed a strategy of selective growth for our global portfolio, which focuses on landmark properties in key destinations around the world. Muscat is a destination region with a lot of appeal,” Kempinski’s Eckhardt said.

“The investment in developing the tourism offering in Oman, which showcases the natural beauty of the country, and the vision for The Wave project, made it an easy decision for us,” he said.

“As we see the progress on The Wave, the continued investment in the country, and prepare to be the first luxury hotel opening on the development we are more and more confident in our decision to enter the Omani market.”