Oman attracts $4.4bn in tourism investments as it seeks to diversify economy

Plans to develop the sector include updating tourism laws and granting incentives on investment projects

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Oman has attracted more than half of the targeted 3 billion Omani rials ($7.8bn) in tourism investments planned between 2021 and 2023 as part of its development scheme.

The sultanate has so far so far managed to attract $4.4bn in tourism investments, , state-run Oman News Agency (ONA) cited Salim Al Mahrouqi, Oman's Minister of Heritage and Tourism, as saying,

Oman's tourism development plan includes establishing a system for governance, modernising the legal framework, updating tourism laws and their executive regulations, overhauling the cultural heritage law and frameworks related to an agreement for granting incentives for investment projects, ONA reported.

The sultanate is seeking to develop its tourism sector as part of its Vision 2040 to diversify the economy and reduce its reliance on oil.

Oman, a small crude oil producer compared with its Gulf neighbours, is more sensitive to oil price swings and was hit hard by the coronavirus pandemic and the collapse in oil prices in 2014.

In May, the number of overseas tourists rose to 216,348, up 35-fold from 6,036 visitors in the same month last year, according to the latest report by Oman's National Centre for Statistics.

More than half of these were visiting from the Gulf, followed by other Arab states, Asia, Europe and the US in the top five.

The number of hotel guests in Oman's three to five-star establishments more than doubled to 140,000 in May, from the same month a year earlier, the data showed.

Hotel occupancy reached 42.8 per cent during May, compared to 24 per cent in the same month last year.

Hotels more than tripled their revenue in May, earning 13m rials, up from 4m rials in May 2021, as the number of guests increased, according to the report.

Oman expects to earn more than 9bn rials a year from tourism by 2040, up from 1.2bn rials in 2019 before the pandemic, Maitha Al Mahrouqi, undersecretary of tourism in the Ministry of Heritage and Tourism, told The National in December 2021.

Last month Fitch Solutions maintained a positive outlook for tourism recovery in Oman during 2022 and 2023, with stronger growth projected in the medium term between 2024 to 2026.

The market has seen a “notable recovery” since the fourth quarter of 2021, following the pandemic in 2020 and the first nine months of 2021, it said in a report in June.

“Underlying growth momentum over the coming years will be supported by the strategic Vision 2040 economic diversification agenda and the highly capitalised position of the state's tourism development authority, Omran”, it said.

“As of late May 2022, the government continues to aggressively implement its rebound strategy, unveil digital marketing initiatives and announce new sector specific investments.”

However, downside risks to tourism include coronavirus mutations and further spillover from the Russia-Ukraine conflict and its impact on the commodities market, Fitch Solutions said.

Updated: August 01, 2022, 9:03 AM