News
Numbers add up for Oman’s tourism sector
The government has identified tourism as a sector with strong growth potential and a key source of jobs for Omani nationals, while a steady increase in arrival numbers is demonstrating growth in Oman’s tourism industry, according to a new report from the country’s National Centre for Statistics and Information (NCSI).
The government has identified tourism as a sector with strong growth potential and a key source of jobs for Omani nationals, while a steady increase in arrival numbers is demonstrating growth in Oman’s tourism industry, according to a new report from the country’s National Centre for Statistics and Information (NCSI).
“We plan to focus on developing tourism capacity with added local value across the Sultanate,” Her Excellency Maitha Al Mahrouqi, undersecretary of the Ministry of Tourism (MoT), told OBG. “Armed with our new Oman Tourism Strategy (OTS), we will focus on identifying and supporting strategic investors, creating new jobs in the sector, encouraging and facilitating local small and medium-sized enterprises, developing a comprehensive tourism supply chain and engaging with local communities by building tourism awareness and involving them in our development process.”
The sector currently accounts for 2.2% of Oman’s GDP, as per NCSI figures, with inbound tourism generatingOR250.9m ($651.6m) last year – nearly double the amount earned in 2005. Meanwhile, domestic travel earnings topped OR970m ($2.5bn), up three-fold over the period.
According to the latest World Travel & Tourism Council (WTTC) report, the industry’s contribution to GDP is expected to increase by an average of 6.1% per year through to 2025, to reach 3.3% of GDP.
Direct employment in the industry is also set to climb, expanding from its present 2.8% of the workforce, representing some 44,500 jobs, to 3.7%, or 72,000 positions, by 2025, for an average increase of 3.8% per annum over the period.
If recent trends in arrivals and stay durations continue, the growth rates projected by the WTTC may prove on the conservative side.
According to the NCSI, arrival numbers have increased by an average of 7.4% per year over the past decade, rising from 1.1m in 2005 to nearly 2.1m last year.
In 2014 more than 70% of visitors stayedfor more than one night, with average stays rising from five nights in 2005 to 7.4 in 2014. Last year alone the average visit duration increased by 0.5 nights, contributing to a 10% year-on-year increase in inbound touristexpenditure.
While inbound visitor numbers are on the rise, travellers’ motivations for visiting Oman have remained relatively static over the past five years. On average, around one-third of travellers come for leisure and recreation, while about 39% travel to visit friends or relatives; the rest come largely for business.
Although increasing arrivals from Asia and Europe have contributed to sector growth over the last decade, inbound visitors from other GCC countries continue to dominate, hitting a record 961,306 last year. When combined with the 129,869 visitors from other Arab states, this represents well over 50% of all arrivals in 2014.
While inbound tourism nearly doubled between 2005 and 2014, growth in domestic tourism waseven more marked, with most indicators increasing three-fold over the past decade.
This may be the result of both risinglevelsof disposable incomefor Omanis, and the success of government and private sector efforts to develop facilities catering tovacationing locals.
In particular, the country has sought to promote domestic tourism in the Dhofar region during the mid-summer khareef season, when cool winds from the east bring rain and cooler temperature to the south-eastern city of Salalah and the surrounding area for about two months. Domestic travel during the khareef season has doubled since 2010, rising by 9.4% in 2014 alone.
Though Oman’s plan seems to be working, with solid industry revenues across the board, NCSI data also shows a widening gap between localsector incomeand money spentabroad by Omani citizens and residents, with a balance of OR163.5m ($424.6m) in favour of overseas spending posted in 2014.
Oman will be looking to narrow this gap, as the MoT’s new OTS deploys and more tourism infrastructure is developed across the country, increasing the appeal of holidays at home.
Average room occupancy rates reached 49.2% last year, marking the fourth consecutive increase. This is particularly significant given the growth inavailable hotel space over the period, with more than 3100 rooms added to accommodation stocks since 2011.
As the main entry point and the country’s business hub, Muscat was the dominant governorate in terms of occupancy rates, registering an average occupancy of 61.7% in 2014. While most governorates saw occupancy levels remain relatively stable, additions to existing room stocks are likely to have obscured increases in volume terms.
The NCSI report also showed that occupancy rates in Oman’s four- and five-star hotels were far higher than in most other segments, averaging around 60% per night, compared to fewer than 40% for one- and two-star accommodations.
A modest slip in occupancy rates for three-star hotels, when taken alongside the rise in occupancy rates for rooms at higher-rated hotels, could also be an indicator of Oman’s rising appeal as a destination for more affluent local and international travellers.
This continued trend in up-market travel is driving increased project development in Oman’s high-end tourism segment, with several new four- and five- star hotels either under construction or in the planning stages, both in Muscat and beyond.
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