With neither Pyramids nor bustling metropolises, Oman can easily be overlooked by tourists traveling through the Middle East. But among the more adventurous travelers and the Gulf’s Western expatriate community, the country’s natural beauty is well-known: Irrigated valleys cutting through deserts; mountains and winding hills with hidden pools and caves, and miles of coastline offering divers amazing underwater views.
Oman, which is no larger than the state of Arizona, is protective of its traditions, and officials there do not want tourism to change the country’s character. Instead, the Omani Ministry of Tourism advocates a slow, and in its opinion, more sustainable, approach by targeting wealthy, eco-conscious travelers. "We are not a destination for mass travel," says Mohammed Ali bin Said, senior adviser at the Minister of Tourism. "Oman is for responsible tourists interested in the environment, culture and heritage. These people will spend more and stay longer."
The success of that strategy depends on how well the country can woo such travelers. Oman has certainly priced itself high — it recently raised the cost of a tourist visa 300%, to US$70. A new advertising campaign in Europe is aimed at wealthy travelers and the country’s four- and five-star hotel capacity is increasing to 25,000 rooms by 2015.
Aiming to attract 12 million visitors by 2020 — the government reported the country received 1.6 million visitors in 2009 — Oman must compete for the same well-heeled tourists with its wealthier Gulf neighbors at a time when the entire region wants to decrease collective over-dependence on oil revenues. According to the World Travel and Tourism Council (WTTC), Lebanon has the biggest share of the region’s travel and tourism market, with 37.6%. The United Arab Emirates has 16.6%, while Oman is currently at the bottom of the Gulf, with 6.1%.
"There is a market for a new, very high-end, destination," notes Alan Fyall, tourism professor and deputy dean at Bournemouth University’s School of Tourism in the United Kingdom. "The Maldives gives a high-end quality product and has always been at this particular level. If the product matches expectations of the market, tourists will be ready to pay the price. But it really comes down to the delivery. Oman must be consistent and deliver quality."
With dwindling oil and gas resources, Oman began ramping up efforts to find a new economic engine in the late 1990s. It is now the second most diversified economy in the Gulf, according to a Middle East Economic Digest magazine. Tourism accounted for 6.7% of GDP in 2009 and is expected to rise to almost 10% by 2019, predicts the WTTC.
To help the industry grow, Oman is investing heavily in infrastructure, with US$18.5 billion spent last year alone. One result is that the country’s road network is expanding. Currently, Muscat is the only city directly connected in Oman, but a highway will be completed in 2012 to join Sohar, in the north, to Muscat, and later to the port city of Salalah in the far south. Projects to modernize and expand the country’s two international airports, in Muscat and Salalah, are another important piece of the tourism puzzle. The two projects are costing roughly US$1 billion and are scheduled for completion by 2014. The new-and-improved Salalah airport is expected to handle a million passengers annually and its runway upgrade will be able to accommodate the double-deck, wide-body, four-engine Airbus A380. Oman Air, the national airline, has recently begun flying to some European destinations.
Oman began adding new hotel infrastructure in 2004. Muscat offers mostly higher-end hotels, including Shangri-La, Grand Hyatt and Intercontinental, and properties from upscale hoteliers Fairmont, Kempinski and Four Seasons are due to open. Two hotels outside the capital, Shangri-La’s Barr Al Jissah Resort and Spa and the Six Senses Zighy Bay Hideaway, have won several international awards for service and environmental excellence. Such brands and service translate into pricey stays. Many hotel rooms in Muscat, for example, cost over US$400 a night.
But that’s by design, not accident. "High prices dissuade a mass market, such as [what’s found in] Egypt, where prices reflect a volume market," Fyall points out. "Egypt absolutely needs tourism and its prices reflect it. Kuwait, Oman and Qatar can be more selective."
A Charm Offensive
That could explain why Oman has been taking its time in raising its profile among holiday makers. For the most part, the country’s Ministry of Tourism has counted on word of mouth. Marketing itself is a relatively new concept in Oman, but Hamed bin Mohammed al Rashdi, minister of information, has stepped up the pace over the last three years. In December, he invited press from around the globe to cover the 40th anniversary celebrations of Sultan Qaboos bin Said’s rule.
It’s all part of new "charm offensive." The Tourism Ministry, Oman Air and a number of Muscat’s luxury hotels hit the road recently in an effort to build enthusiasm for the country. "We went with Oman Air to Germany and Italy, when the company opened two direct destinations," says Carl Volschenk, director of sales and marketing at Sheraton Oman. "Those road shows helped to target travel agents."
According to Fyall, Oman’s promotional plan is a good one. "First, branding is critical because it is a vehicle to mark the difference in destination, particularly for high-end product," he says. "Second, the collaboration between an airline and the destination is critical."
Not all of Oman’s luxury-tourism initiatives have panned out, though. Following the lead of its Gulf neighbors, in 2006, the country in recent years unveiled a US$20 billion real estate project to create a modern metropolis called Blue City. But the global recession caused the project to fall behind schedule, and is now facing the possibility of liquidation.
Blue City has been a tough reminder for Oman’s tourism visionaries of the challenges they face. The country needs to distinguish itself from the rest of the Gulf, rather than copy what is already available in nearby Dubai and other UAE destinations. "Over the next decade within the Middle East, Oman will probably reach the top five in terms of tourism growth, with a 5.6% average per annum over the coming 10 years, but its neighbor the UAE will grow the most, with 8.1% real growth," notes a recent WTTC report. According to the report, tourism expenditure in the UAE was US$6.2 billion, compared to US$1 billion in Oman last year.
"Oman offers a very wide range of tourism products, from cultural tourism, ecotourism, sun and sand tourism, adventure tourism, and there are many competitors for the different individual products," according to Edith M. Szivas, a tourism development specialist at the University of Surrey in the U.K. "Oman has an appeal as a new and exotic destination, with rich culture and heritage and an unspoiled environment. The country is also safe and has developed infrastructure. This gives Oman a competitive advantage."
Experts predict that Oman will benefit as a destination as Lebanon and Tunisia undergo unstable political periods that could scare away tourists. But analysts worry about Oman as well, as the Sultan is 70 years old and without a clearly designated successor.
It is also very important for Oman to succeed in its tourism push, as the industry provides for a number of jobs for its nationals. According to the WTTC, the tourism sector accounted for 7.8% of the national workforce, or one job in 13, in 2010. By 2020, it is expected to increase to 9.9%. The effort to place nationals into the private sector, called Omanisation, will reinforce this share — travel and tourism already has some of the highest Omanisation rates. For instance, 85% of staff at three, four and five-star hotels is required to be Omani.
Oman’s tourism strategy "is in line with the overall development strategy of the Sultanate, which [focuses] on benefiting the Omani population," Szivas notes. "Dispersing tourism development projects … will help regional development, but it must be ensured that the economic impact benefits locals and negative socio-cultural and environmental impacts are minimized."
For that reason, Omani officials are now looking to new markets as sources of tourists. In January the government announced that it is organizing its first-ever roadshow in India to attract potential visitors. Indeed, many experts say the Middle East tourism market’s future growth lies in Asia. "A combination of two billion new middle-class consumers from the emerging countries of China and India, and the continued expansion of Middle East [air] carriers, present the Middle East with a unique opportunity to be on top of the ladder in the global travel and tourism industry," noted the WTTC report.
Oman’s challenge will be to convince the more cost-conscious Asian tourist to buy into the same tourism pitch that attracted the higher-end clientele from Europe. There are signs the country may be rethinking its tourism strategy, as a number of mid-range hotels are being planned for Muscat. Lyall warns that could endanger Oman’s niche appeal. "The danger is when you start decreasing prices, doing promotions and launching charter airlines … they dilute what makes you special."