Foreign investors looking for investment opportunities in Oman may look to the country’s tourism industry for potential, with continued growth expected within this sector over the coming years. According to the GCC Hospitality Industry Report published by investment banking advisory firm Alpen Capital, Oman’s hospitality market is predicted to grow at a compound annual growth rate (CAGR) of 7.5% to US$1 billion between 2017 and 2022.
This report also predicted a rise in international tourist visits at a 5-year CAGR of 1.3% to 3.4 million, while hotel supply is expected to grow at a 5-year CAGR of 5.6% to approximately 29,635 hotel rooms in 2022. Another report published in 2017 by KPMG showed similar expectations in terms of growth within the industry, predicting the number of foreign tourists to Oman would rise to 11 million by 2040, compared to the 1.4 million at the time the report was released.
“The GCC hospitality industry, which has been under pressure in recent years, is expected to gain positive momentum on account of the recovery in oil prices, upcoming mega events, increased tourist inflow, positive regulatory initiatives, and increased government spending and investments towards the hospitality and tourism sector,” said Sameena Ahmad, Managing Director at Alpen Capital (ME) Limited to The Times of Oman.
“GCC countries have well-defined strategies to develop themselves as preferred travel destinations,” she added. “They are making significant investments into the development of tourism and hospitality infrastructure including airport expansions to increase the handling capacity of the anticipated visitor inflow.”
Reasons to Invest in the Hospitality Industry in Oman
While there are many factors to consider when weighing up investment opportunities, here are some reasons you may decide to look more closely at the tourism industry in Oman as an option for investment.
- The tourism sector has become Oman’s fastest growing industry, and is expected to be the country’s the second major sector, after oil, over the coming years.
- Oman’s economy as a whole is enjoying growth, and is expected to see continued growth at an average rate higher than other GCC countries.
- As Oman continues to diversify out of oil, it is working hard to encourage growth within other industries. The tourism industry has been of particular interest, with government initiatives and investments, a driving force for expansion within the sector. Investments are being made for the long term, with the government determined to achieve the objectives of the 2040 National Tourism Strategy.
- The number of international tourists arriving in Oman is expected to reach 3.4 million by 2022, and 11.7 million by 2040.
- Tourists arriving in Oman can now enjoy easier access to the country, and to better facilities, thanks to the recent opening of the new Muscat International Airport, and relaxation of tourist visa rules. Oman is also positioning itself to be more attractive to foreign visitors, by participating in major international exhibitions and broadening its sports and leisure offerings.
- Oman provides a fascinating destination for international visitors, combining cultural and heritage attractions with modern conveniences. The GCC tourism industry has experienced a boost in visitor numbers within the Millennial age group specifically over the past few years, and this trend is expected to continue.
- With upcoming mega events such as Expo 2020 and the FIFA World Cup 2022 bringing more visitors to the GCC region, it’s expected surrounding countries such as Oman will also see an increase in visitor numbers.
- The government of Oman is working hard to attract foreign investment. Not only has it cut back on bureaucratic and other administrative hurdles, it also provides subsidised loans and other incentives to foreign investors.
- The Ministry of Tourism of Oman issues tourist licenses to various kinds of hotels, resorts, casinos, convention centres and travel agencies to attract investment.
From travel agencies to hotels, tour companies to gift shops, the tourism industry holds plenty of opportunity for foreign investors looking to start a business in Oman. If you want to take advantage of the expected growth within this sector, contact Fusion today to find out more about the steps you need to take by setting up a no-obligation consultation.