Muscat: Oman’s tourism industry appears to be closely linked to the country’s long-
term vision for economic growth and development—particularly in the wake of a
national diversification programme. According to the recently announced State Budget
2019, non-oil revenue is showing an increased contribution to Gross Domestic Product
(GDP)and tourism’s contribution to GDP is forecast to increase from 2.6 per cent in
2017 to 6 per cent by 2040.
Due to volatility in oil prices, the government has had to balance expenditures within
anticipated revenues while keeping the deficit at a sustainable level. The Oman State
Budget aims to allocate sufficient funds to strategic infrastructure projects, as well as
maintain infrastructure and continue to push for economic diversification by enhancing
participation of the private sector.
The focus is to improve the investment climate, promote public-private partnerships
and offer support to small and medium enterprises by assigning a share of government
projects to such entities. These investments could positively impact travel and
tourism—as it continues to remain one of the most important economic sectors
worldwide, contributing 10.4 per cent to global GDP, and supporting nearly 1 in 10 jobs,
according to the World Travel and Tourism Council (WTTC).
Tourism is also one of the fastest growing industries in the world and offers tremendous
socio-economic benefits. It promotes Foreign Direct Investment (FDI), stimulates the
development of local economies and, last but not least, helps establish sustainable and
long-term businesses that benefit many generations.
In this regard, Oman is fortunate to be blessed with a rich history and numerous
natural and cultural assets. Naturally, this has fueled growing investments in the sector,
which is expected to generate more than half a million jobs by 2040.
The Government of Oman is welcoming partnerships to develop the country’s tourism
economy even further in 2019. As part of the government’s efforts to achieve economic
diversification, the 2019 budget approves allocations for the five sectors targeted by the
National Programme for Enhancing Economic Diversification (also known as Tanfeedh)
including manufacturing, logistics, tourism, fisheries and mining.
Investments in tourism are being driven by joint ventures from large overseas
companies such as Majid Al Futtaim, which owns and operates shopping malls, retail,
and leisure establishments in the Middle East and North Africa. The Oman Tourism
Development Company (Omran)has partnered with Majid Al Futtaim to develop an
OMR5billion new mixed-use development in Muscat called Madinat Al Irfan or “City of
the Future”.
Dubai-based property developer Damac has also signed a joint venture with Omran to
develop the US$2 billion Mina Al Sultan Qaboos waterfront project which aims to
transform one of the country’s oldest ports into a retail, entertainment and lifestyle
destination. The transformation into a lifestyle destination is part of the ongoing vision
to develop the city into a thriving economic hub.
These initiatives show that the ambition and assets to take Oman’s tourism sector to
the next stage of growth and evolution exist, with a steady portfolio of projects in the
pipeline which could help fulfil the country’s 2040 Tourism Strategy to attract 11 million
tourists by 2040. It also aims to attract private sector investments to the tune of

OMR1.8 billion, as well as increase added value in the tourism sector to OMR1 billion
under the Ninth Five-Year Plan by 2020.
Alongside increased public-private investments, the number of tourists visiting Oman
continues to grow. According to data published by Colliers, the number of tourists to
the Sultanate expected to increase at a compounded annual growth rate of 13 per cent
between 2018 and 2021. In fact, the number of Chinese tourists to Oman has recorded
a 14 per cent increase between 2013 and 2017. This is expected to continue in the next
few years at an estimated annual growth rate of 12 per cent between 2018 and 2022,
according to data published by Colliers.
The Ministry of Tourism has eased tourist visa policies in the last few months, including
allowing tourists from Russia, China, India and other countries, to obtain a non-
sponsored visa for Oman. The Royal Oman Police also introduced a new e-visa scheme
in March 2018 to simplify booking travel visas for visitors, hotels and tour operators.
These visitors are now either arriving or transiting through a world-class airport with the
capacity to handle 20 million passengers a year. The refurbished Muscat International
Airport is the hub of a national carrier with a growing network in the Middle East and
beyond. In addition to this, hotels are expanding capacity as they get ready to host
even more visitors in 2019.
The challenge now is for Oman to fully realize the potential of what it already has and
bring together key stakeholders to fulfil a common vision. Tremendous momentum has
already been built over the past five or six years around tourism—it has now become a
key pillar to secure Oman’s future, and steer the country towards a new era of social
and economic progress.

  • The author is the Director, Advisory, KPMG Lower Gul