Oman touts new initiatives aimed at boosting tourism

Oman's Ministry of Tourism has forecast 10% growth in the sector this year and aims to attract 12 million visitors a year by 2020. Last year the tourism industry's contribution to GDP was 2.6% and is on pace to exceed the country's projection that the industry would contribute 3% of GPD in 2020, said Haitham Mohammed Ghasani, director of tourism promotion, Oman Ministry of Tourism.

Ghasani was quick to note that Omans' capital, Muscat, has been named the second best city to visit in the world in 2012 by Lonely Planet, and was also chosen as the capital of Arab Tourism for this year.

New initiatives in the works

He also told AMEInfo.com that several new initiatives are underway to boost the country's tourism sector, which faced challenges in 2011 due to the unrest in the region. However, he was quick to point out that room rates remain high, largely due to a shortage of supply. According to a recent study by Hotels.com, average room rates in Oman rose by 19% to $288 per night in 2011, making it the most expensive country in the world for hotel accommodation.

"The high room rates are an advantage and disadvantage," Ghasani said. "On one hand it shows that there is very high demand for this destination, but on the other side you have people who might complain that the room rates are very expensive. In the future prices will go down once new projects are completed. We hope."

In addition to focusing on its core markets in the Gulf and Europe, the ministry is putting greater emphasis on attracting tourists from Asia, he noted. "We opened a representative office in India two years ago, and we'll open new offices in China and Japan soon," he said.

The ministry has also coordinated with Oman Air and hotels across the country to launch the '1 Free Night in Oman' campaign to encourage stopovers on the carrier's international network. The campaign is the first of its kind for Oman and runs until 22 December.

Oman also recently reduced the price of tourists visas by up to 75% in a bid to attract more visitors. As per the revisions, new entry tourist visas, valid for ten days, will cost OMR5 ($13) while cruise visas for up to 24-hours will be free or charged at OMR5 for multiple visits.

Another key pillar of the government's tourism strategy is the construction of the Muscat Convention and Exhibition Centre. Scheduled to be fully completed by 2015, the centre will feature a 3,200 seat auditorium and 22,000 square metres of exhibition space. The centre and its surrounding precinct will also include a five-star hotel, two four-star hotels, and a three-star hotel.

Also in the works is a $1bn tourism resort in the southern port city of Salalah. The first phase of the project is expected to be ready this year and will consist of three upscale 5-star and 4-star hotels and light residential and commercial components.

Grand Hyatt Muscat off to strong start in 2012

Christopher Franzen, general manager of the Grand Hyatt Muscat, said the unrest in the region had a more harmful affect on leisure hotels than business hotels in Oman. "We are primarily a business hotel, so in terms of occupancy we closed at almost the same level in 2011 as the previous year," he said.

"We saw a drop in leisure and corporate groups, but this is due in part because Dubai has such a dominant position. With so many hotel rooms they are much more competitive in terms of what they offer in room rates."

So far in 2012, the Grand Hyatt Muscat's revenues are up year-on-year, but new stock is putting pressure on rates. "All of the hotels that opened over the past year are in the three and four-star segment, so there is rate pressure because ultimately the three-stars eat from the four-stars, and the four-stars eat from the five-stars, and so on," he said.

But Franzen said he welcomes the new hotels because they will help raise awareness about Oman. "If other hotels open that is great because they have to create destination marketing campaigns for people to know about Muscat. So even if other hotels open it is a blessing," he said.

Franzen pointed out that room rates still remain healthy in Muscat as the market remains undersupplied despite the new stock. "The opera house opening has also definitely helped us. We have guests traveling from the UAE down to Muscat staying overnight to see a performance. But there are other things happening as well, including the Tour of Oman bike race and the sailing festivals," he said.

"And Oman Air has been heavily expanding into new routes. Before it was almost impossible to fly nonstop from anywhere to Muscat; you had to go by Abu Dhabi, Dubai or Bahrain. But now we are connected to the big cities in Europe as well as the Far East," he added.