Going to plan: Authorities target new markets and train a domestic workforce

As it moves to meet its Vision 2020 goals, the government’s strategy for tourism is critical. Objectives include drawing 12m visitors a year by 2020, and the sultanate’s eighth five-year plan, running from 2011 to 2015, highlights specific investment targets, diversification and development strategies, and marketing campaigns to help the Ministry of Tourism (MoT) attract a diverse array of tourists. The authorities are targeting markets in Europe, Asia and Australia, while maintaining the country’s base of tourists from within the country and other GCC states.

The objective of Oman’s National Tourism Development Plan, enacted shortly after the MoT’s formation in 2005, is to develop the industry as an important and sustainable sector of the economy, “in a manner that reflects the sultanate’s historic, cultural and environmental heritage and sense of traditional hospitality and values”. The plan focuses on a number of core bullet points, such as encouraging collaboration between the public and private sectors, developing the local human resources pool, increasing the Omani portion of the workforce to between 75% and 100% in various segments, preserving the sultanate’s social, cultural and environmental resources, and supporting the institutions responsible for the development of tourism. Under the most recent five-year plan, the Oman Tourism Development Company (Omran) will receive a budget of OR566m ($1.47bn) for general projects, and another OR800m ($2.07bn) for energy and water distribution projects in key tourist areas.

Assessing Services

In January 2013 the MoT announced that it was planning a full-scale assessment of occupancy and services in the tourism industry, as it pursues a scheme for development and growth. To help pull its framework together, the ministry is in process of selecting a private international consulting firm to draft a comprehensive long-term strategy, according to the minister of tourism, Ahmed bin Nasser bin Hamad Al Mehrzi, who told local media that the plan would take at least three years to draw up and execute. Details are scant so far. The announcement came as the ministry recognised that the lack of a clear blueprint, along with infrastructure shortfalls and construction delays, were having an adverse effect on the industry. Despite the state’s having invested OR100m ($259.7m) in the sector over the past few years, Al Mehrzi said returns from these investments had not lived up to expectations.

Moving Forward

The MoT has several strategies in mind as it moves to expand the industry. Foremost of these is aggressive marketing, which includes goals to increase attendance at international trade shows, open new tourist offices in foreign countries, and launch targeting campaigns aimed at specific nationalities, notably German, Swiss and Indian tourists.

In 2010 the MoT unveiled its new global awareness campaign – “Beauty has an address” – that will be promoted through trade, media and consumer campaigns at Oman Tourism’s international offices. Promotional activities include consumer educational campaigns in partnership with the national carrier Oman Air, e-marketing activities and educational programmes at Omani schools. The ministry is also promoting events for domestic tourism, including the Muscat Festival and the Salalah Tourism Festival.

Old & New Markets

The ministry has increased its international presence by opening a number of representative offices in select markets. The current tally stands at 11, with offices in Europe, India, the UAE, Australia and, most recently, two new ones in Mumbai (2010) and Riyadh (2013). Oman’s foreign tourism offices are strategically located, intended to target lucrative new fronts without neglecting its existing strongholds. “The GCC and Europe are our two biggest markets, but we are looking towards new markets as well. Going forward, the ministry will target Asia as well as North and South America,” Khalid Al Zadjali, director of tourism events at the MoT, told OBG.

GCC nationals account for the highest portion of inbound tourists each year, with numbers increasing by 19.2% to 789,461 in 2012. Inbound passengers from other Arab nations jumped 44.6% in 2012 to 101,710, while the number of Asian tourists rose by 43.3%, hitting 369,440. The number of European visitors was also up in 2012, rising 26.9% to 317,096.

Tourists from Germany and Switzerland, for whom Oman’s mountain ranges, hiking trails and outdoor activities are a particular draw, increased by 31.5% and 156% in 2012, respectively. This being so, the ministry is increasing its focus on German and Swiss markets, attending the ITB Berlin Exhibition trade show in 2013, while Oman Air’s new schedule now offers direct flights to Munich, Frankfurt and Switzerland. In September 2013, the travel agency FTI Group announced it would continue its charter flight service from Germany, Austria and Switzerland to Salalah, given the success of inaugural services launched in April 2013.

One reason for the growth in international arrivals could be the government’s decision in 2011 to slash tourist visa costs by 75%. Valid for 10 days, the standard entry visa now costs OR5 ($13), down from OR20 ($52), while cruise visas for stopovers of up to 48 hours are free for all nationalities. Further changes to visa regulations could go a long way towards increasing tourism revenues from South Asia. India is Oman’s largest inbound market, with 221,000 passenger arrivals in 2012 – a rise of 35.6% over 2011. However, Indians are still unable to obtain visas on arrival, a regulation that, according to Renny Johnson, executive manager of Mezoon Travel, is impeding growth. “Oman, as far as India is concerned, is mainly a job market at the moment, which is why visa regulations are more stringent. But as the sultanate moves to market itself as a wedding and film destination, relaxing visa policies could go a long way towards growing this market,” Johnson told OBG.

Boost From Bollywood

Cultural ties between Oman and India were strengthened in 2012 when the Bollywood film “Once Upon A Time In Mumbaai Again” shot a number of scenes in the sultanate – the first time that a Bollywood movie had ever been filmed in Oman. The MoT is also working to market Oman as a wedding destination, with a major Bollywood wedding scheduled to take place in the sultanate in 2014 to kick off the campaign. “We anticipate that 7000 guests will be in attendance for this event. It will be so large that we have planned to rent a cruise ship from Dubai to meet demand. We hope that this will kick off future growth in the wedding tourism segment,” Johnson told OBG, adding that 16 Bollywood music videos have been shot in Oman in the past three years.

The government has also made moves to increase the sultanate’s potential for tourism through regulatory changes. In May 2013, Oman adjusted its working week, aligning itself to a Friday-Saturday weekend schedule from a Thursday-Friday one. This move is expected to benefit the tourism industry by cutting down on confusion for international tourists who have struggled to coordinate their schedules.

Human Resources

Job creation forms a critical part of the government’s tourism strategy. The total contribution of travel and tourism to employment in Oman was 77,500 jobs, or 7% of overall employment in 2012, according to the WTTC. This figure is forecast to grow by 5.1% in 2013, reaching 81,500 jobs, or 7.2% of total employment. Integrated tourism complexes alone, once completed, are expected to provide around 15,000 jobs, including at least 7000 for Omani nationals. Resourcing, however, remains a challenge, particularly when it comes to attracting and retaining Omani workers. “We’ve achieved 65% Omanisation; however, it is a constant and perpetual challenge,” David Todd, general manager at the InterContinental Hotel in Muscat, told OBG.

In its 2012 annual report, Muscat’s National Hospitality Institute spoke on the difficulties of developing a sufficient human resources pool in the sector. The government-funded institute, which has been working since 1996 to increase Omanisation to at least 75% within the hospitality industry, reported reductions in 2012 as a result of low enrolment. “After the half-year point we encountered a severe lack of Omani candidates coming forward for training linked to employment. The main cause of this was the heavy recruitment by the government of Omanis into the public sector. The hospitality industry has traditionally offered lower salaries than many of the other sectors and has therefore been affected the most by the public sector recruitment,” read the report.

Many private sector employers are now looking at alternative ways of achieving better retention rates from the Omani portion of their workforce, particularly in terms of offering internships and on-the-job training. In September 2012, Omran declared its highest-ever intake of student interns from Omani colleges and universities. More recently, In April 2013 the five-star Al Bustan Palace launched a training academy designed to promote excellence in the hospitality industry, with courses on leadership skills, soft skills, culinary skills, basic hospitality training and professional certifications covering an array of disciplines.