Oman's tourism sector boosted by diversification of the economy
Oman's tourism sector is set to receive a major boost in its long-term strategy to develop a diversified economy that goes beyond its dependence on oil and gas revenues.
Fitch Economic Research has raised its positive expectations for Oman's tourism recovery this year, forecasting strong growth in the medium-term outlook. BMI, a subsidiary of Fitch, published an international report indicating that Oman's tourism activity exceeded expectations last year with optimistic forecasts for this year.
According to the official Oman News Agency, the tourism report was based on independent assessments, expenditure forecasts and indicators such as traveller arrivals and departures, modes of transport, reason for travel, origin, destination and markets of residence.
BMI estimates that the total number of tourists visiting Oman this year will reach approximately 3.5 million, an increase of 20.8% compared to the previous year. The medium-term forecast, from 2023 to 2027, suggests an annual growth rate of 7.4%, driven by continued demand for leisure and business tourism, support for economic recovery and increased investment in the tourism sector due to higher oil prices.
Global travel demand has accelerated recently with a significant pick-up in air traffic following the easing of COVID-19 related restrictions. Omani authorities anticipate a return to pre-pandemic travel levels by 2023, possibly exceeding 2019 figures.
However, Oman faces competition in the tourism sector from neighbouring countries such as the United Arab Emirates and Saudi Arabia. Saudi Arabia has invested more than $50 billion since 2016 to promote various forms of non-religious tourism as part of its Vision 2030 plan. Despite being economically weaker compared to its Gulf neighbours, Oman has been committed to diversifying its economy for years, with a particular focus on developing tourism as a promising alternative to oil revenues.
BMI experts expect the Middle East to be the top tourist destination this year, with some 1.5 million visitors from the region. It will be followed by the Asia-Pacific region with more than 606,300 tourists, Europe with around 320,600 tourists, Africa with 72,000 visitors and North America with more than 72,800 visitors.
As reported by Al-Arab, the BMI foresees a steady growth of Omani tourism beyond 2027, driven by long-term economic diversification efforts and the goals set by the government's Vision 2040 initiative.
To develop the tourism sector, Muscat is implementing a comprehensive tourism development plan that includes governance and management programmes, capacity building, planning, investment promotion and competitiveness enhancement, as well as an increased focus on local content.
In addition, major transformations are taking place in Omani tourism to broaden the horizons of the sector. These efforts include attracting foreign capital to improve tourism infrastructure, creating integrated tourism investment opportunities with the private sector, and fostering growth opportunities for small and medium-sized enterprises.
In addition, the Ministry of Tourism, in collaboration with government and private sector entities, is making significant efforts to develop profitable and sustainable tourism destinations that contribute to economic growth.
The Ministry's plan includes new tourism and heritage projects aimed at increasing overall investment in the sector.
Muscat has identified several opportunities to strengthen its tourism sector, such as entertainment and attractions, adventure tourism, leisure and nautical tourism. The sector is also focusing on building relationships with holiday service providers in emerging markets, investing in digital platforms to support holiday bookings and capitalising on the continued growth of the cruise sector.
To promote Oman as a beach, mountain and cultural destination, multi-dimensional campaigns are being planned, along with measures such as the development and expansion of tourist visa and e-visa facilities.