Analyse of the sector 30/11/2010
Oman’s travel and tourism plan well on its way

Despite the current difficulties emanating from the global recession and the outbreak of the H1N1 pandemic, Oman’s travel and tourism development continues. Oman’s Vision 2020 – a plan for economic diversification and growth strategy – revolves around establishing Oman as a regional travel and tourism hub, increasing the contribution of travel and tourism to at least 3% of GDP, increasing the participation of the private sector in the development of tourism activities, attracting foreign direct investment, and increasing “Omanisation” – the replacement of expatriate workers in travel and tourism with local ones – to bring the share to 80%. The healthy growth of travel and tourism in 2009, coupled with the progress of the projects underway and the rising awareness of Oman’s potential, are just some of the indicators that the sultanate is well on its way with its Vision 2020 strategy.

 

Travel and tourism hit by the global recession and the H1N1 pandemic

 

The repercussions of the global recession were felt across Oman’s travel and tourism industry, with lower volume and value growth rates across all sectors. Consumers have responded to the recessionary pressure mostly by trading down to cheaper alternatives, with a few resorting to cutting down on travel and tourism. This trend has fed through into growing demand for low-cost carriers and non-hotel travel accommodation, among others. In addition to the global recession, the outbreak of the H1N1 pandemic in the second quarter of 2009 has also re-shaped the sultanate’s travel and tourism industry. In addition to dampened consumer confidence, the cancellation of the Muscat Festival 2010 has been a major blow to Oman’s travel and tourism industry.

 

Oman Air spearheading the sultanate’s travel and tourism policy

 

Oman Air, the sultanate’s national carrier, has been active in expanding Oman’s popularity and reach across the world. The airline has mainly focused on expanding its services between Oman and major destinations in Asia and Europe, and, as such, increasing its fleet to cover short- and long-haul distances. Throughout 2009, Oman Air expanded its fleet, added new routes and completed its rebranding campaign.

 

Revival in cheaper transportation and accommodation as travellers trade down

 

The global recession negatively impacted long-haul travel in particular, with Oman witnessing a growing tendency for short-haul arrivals and shorter durations. The rise in short-haul arrivals was manifested in tourism flows to and from nearby countries, with the United Arab Emirates, for example, posting double-digit growth. Trips of shorter duration have been supported by the availability of cheap flights on low-cost carriers. Oman’s status as a premium destination noticeably declined in 2009, amid growing demand for budget accommodation, with chalets, guesthouses, private accommodation and self-catering apartments posting double-digit growth in that year.

 

Healthy growth forecast, thanks to sport events, project pipeline and LCCs

 

The recession and epidemics have taken their toll on Oman’s travel and tourism industry, but there are positive developments on the horizon, with, for example, the country hosting the Asian Beach Games – scheduled for December 2010 in Muscat – which will add sports tourism to Oman’s tourism offerings. Secondly, with the large number of projects underway, such as the Blue City, the Omani government is working hard to put in place the necessary infrastructure to enhance travel and tourism, in terms of flights, promotional campaigns, integrated tourism complexes and an adequate accommodation supply. Thirdly, the low-cost carrier (LCC) phenomenon will take the sultanate by storm over the forecast period, as newly arriving LCCs, such as Flydubai and Bahrain Air add Oman to their routes.