Tourism to Oman is increasing substantially. As such plans have been announced by the Oman Tourism Development Company for the creation of three new hotels, providing an additional 900 rooms for 2017/18. The address of one of the hotels is the Madinat Al Irfan Urban Centre, in a new development area. In addition, Sheraton Oman – which has been closed for the last 10 years – is due to reopen in October. Having been a landmark in Muscat for many years, this hotel is one of the tallest buildings in the country, with 14 floors. That hotel alone is offering the bourgeoning tourist industry an additional 230 rooms (including 27 suites).
Of the new developments, Said bin Mohammed Al Qasmi (head of the Oman Convention and Exhibition Centre development and CPO) explained that:
“The new business hub at Madinat Al Irfan Urban development is going to be a new urban fabric introduced into Muscat, offering a multitude of opportunities in Oman for residents and visitors alike. The opening of both JW Marriot and Crowne Plaza next year will continue the initial stage of phase one of this development, adding another dimension to the Oman Convention and Exhibition Centre.” By having these fantastic hotels on-site to complement the world-class OCEC facility, it means there are already assets on the ground at the Madinat Al Irfan Urban development. Projects of this size often focus on doing a lot off-plan, but this is not the case with Al Irfan. We’ve begun phase one, and investors can see progress and tangible facilities already in place.”
In addition, a few months ago, ‘Tourism Horizons’ an academic engagement program was developed as part of a “strategic vision of developing Oman’s top urban and tourism destinations, including the ‘Madinat Al Irfan’ and the ‘Mina Sultan Qaboos Waterfront’.” Targeting various students from select academic institutions in engineering, marketing and tourism, this event was held at the Oman Tourism College, in an effort to find ways for the students to “contribute to the growth of the [tourism and hospital] sectors.”
Furthermore, the National Business Center just organized a discussion session as part of the monthly Reyooq initiative for the incubated companies and SMEs. At the event, the country’s Undersecretary at the Ministry of Tourism, Maitha bint Saif Al Mahrouqi, spoke of the investment opportunities SMEs in the Sultanate can access and how they can use its tourism strategy for job growth which will ultimately contribute to growth of the national economy and SME advancement in the industrial sector.
The event also highlighted the vision of NBC, which is to become the premier platform for Omani entrepreneurs by providing business development support and guidance, training and mentoring, access to markets and industry experts and state-of-the-art, fully equipped, office space, meeting rooms and presentation facilities.
Oman has encountered a substantial growth increase in capital investment for its electricity projects. According to one expert, the growth rate reached 27 percent, resulting in a total of OMR221 million as against OMR174 million in 2014.
Tourism in Oman is increasing. This can be seen in the new, luxurious hotels that have been – and are set to be – built in the region, the first one being the Alila Jabal Ahkdar located in Nizma. So exquisite is this new residence that it won a design award – the silver certificate for “Leadership in Energy and Environmental Design. What else is impressive about the hotel is how – while it is comfortable and beautiful – it still does not stray from its heritage, featuring much local artistic work along with regional cuisine.
Alila Jabal Ahkdar is the new hotel in Nizma, Oman and the first of 10 more luxury resorts opening in this seemingly overlooked country. This recent development is a result of more than $US3 billion being invested in tourism in Oman.
So this is good news for business in Oman. Indeed, studies have shown that when hotels cater to the needs of business travelers, that is when their profit margin benefits. A report put out by the US Travel Association a couple of years ago found that global and domestic business travel in America spending totaled a staggering $266.5 billion over twelve months. In addition, business travelers probably make up one of the highest percentages of frequent travelers according to American Express Global Business Travel. With these statistics, it looks like Oman’s focus on new, luxurious, comfortable hotels is just good for business!
Given that each year Oman produces over 1.5 million tons of municipal solid waste it seems like there should be something useful to do with it. Indeed, according to Caledonian College of Engineering researchers, given that a large percentage of this amount is organic, it could actually be converted to energy.
Some of the organic waste can be treated through an anaerobic digestion process, whereby the material is broken down by microorganisms that thereafter generate a biogas which can be converted to electricity or fuel. If this is used for Oman, it could actually decrease the amount of garbage that is currently in landfills and in turn, provide a sustainable source of energy.
Indeed, as head of the research project Professor Joseph Thanikal pointed out:
“They say that from all the wilayats there are 5,000 tons of waste, combining all kinds of biodegradable waste, per day. We have proven that it’s possible to convert it to biogas and we have enough quantity of waste that can supplement the energy so it could be one of the sources.”
This kind of project would also improve aesthetics (ridding the landfills of unsightly garbage) and enhance the environment.
According to a recent survey entitled, The Status of Working Women in the MENA, it appears that female professionals in Oman believe there is a “greater pay parity between genders in the Sultanate,” vis-à-vis most GCC countries. A prior Middle Eastern study also showed that 51 percent of female respondents believed they received equal treatment at work.
Indeed, female workers in Oman do receive the same salaries as their male counterparts. It is generally believed that one gets paid according to their performance, rather than their gender. This is good news since most people these days (73 percent) work in mixed gender environments. Seven in ten women claim they are comfortable with this arrangement with four in ten saying they are “very comfortable.”
Furthermore, 49 percent of women in the Sultanate feel that gender is not an issue at all when it comes to promotion, believing that their workplace offers this to both men and women equally, depending on their performance as echoed above.
The Oman economy is faring well internationally, having successfully attracted substantial amounts of foreign direct investment (FDI). This is being further advanced by the region’s investigation into global partners that can also invest in the Sultanate. This may have been enhanced by the somewhat lax foreign investment policy, as noted in the Central Bank of Man’s 2013 Annual Report. A United Nations Conference on Trade and Development (UNCTAD) report put the inflow number at US$1.62bn in 2013 – up .58 from 2012.
The government has been focusing its FDI on exports such as tourism, IT and infrastructure. It is the external sector that has been pushing the Oman economy in recent years, making the Sultanate a more attractive FDI location. With a trusted macroeconomic and political environment, modern infrastructure, low profit tax, no limits on repatriation of profits, Omani rial fixed exchange rate, and a free market system, foreign investors have no reason not to bring their markets to the area. As well, the World Bank’s Doing Business 2014 ranked Oman at no. 47.
With an improving diversified global economic forecast, the Oman economy is set to follow suit. It is a more open economy these days, proved by the ratio of what was being exported and imported to nominal GDP at an average of approximately 100.7 percent between 2010 and 2013.
There has also been an escalation in Omani imports and additional Omanization. Between 2010 and 2013, imports went up an average rate of 18.8 percent. Tourism is also having a greater impact on the Oman economy.
According to the Chairman of Oman Chamber of Commerce and Industry Said bin Saleh Al Kiyoumi, it is crucial that a very specific method is used to introduce “Omanization” into the country. (Omanization is a policy the Oman government made law in 1988. It sought to bring in Oman workers instead of expatriate ones.) The way Omanization works is via the Oman Sultanate which sets quotas for each industry to reach vis-à-vis Omani to foreign workers. Companies that succeed in this endeavor receive a “green card,” which translates into positive press attention and preferential treatment when working with the government.
Al Kiyoumi recently said that the time has come for Omanization to now change its focus. He said that it should be implemented in sectors where it is beneficial for both job seekers and employers. The issue will be further discussed with individuals at the Ministry of Manpower.
Another part of this endeavor is being implemented by the OCCI which will be launching 9 ‘OCCI Award for Excellence’ in order to bolster competition within private sectors. The idea behind this is to boost the country’s SMEs and ease their interaction with large private sector and government firms.
Other initiatives in the making include: Manafidh, (free SME product/services marketing at major shopping malls), Muntaje (a special shelf at shopping malls for growing industries), Kafa’at (an SME training program) and Dialogue for Advancement (interactive program between government and business executives).
Solar power is being used in Oman to support oil production. This is going to be beneficial for Oman’s Vision 20-20 plans for economic diversification. By using solar on the oilfield, natural gas can be diverted from oil production to private industry. This can lead to the establishment of a high-technology export industry within the Sultanate.
Currently, the Oman economy is somewhat of a leader in oil production in the region. Oman is viewed as an Enhanced Oil Recovery (EOR) leader. For the past six or seven years, Oman has been increasing its oil production by injecting high-pressure steam into oil-bearing formations. Large amounts of natural gas are burned to produce steam and then pumped into the reservoir to heat the oil making it easier to extract. The Sultanate is now ready to take the technology to the next level by generating the steam required for oil production using solar power instead of by burning natural gas.
In an Ernst & Young report, it was found that by using solar enhanced oil recovery in Oman, the Oman economy can be “transformed.” Indeed, if it was used in its entirety, within the next decade, a further 212,400 permanent jobs could be created, over half a billion cubic feet of gas per day can be released and over $12b can be contributed into Omani GDP. Those numbers are an attractive sway for enhancing the Oman economy.
SMEs are gaining increased credibility in business via the IT industry in Oman. This is having a positive impact on the region’s economy. Forecasts for Oman business as recorded in the Oman IT Market Report may be worth $410m, an increase of 6.5 percent from the estimated 2012 figure which was $385m. It is also expected that the Omani government will be a substantial motivator of Omani IT spending over the next five years.
SMEs will also benefit from the recent MoUs signed between SAP and Gulf Business Machines under the PTPA. These should be able to offer work experience to those looking for jobs. For SMEs it helps them in leading technologies through corporations with IT firms and their partners. IT industry leaders believe that SMEs have the capacity to make a significant contribution to Oman’s economic growth, establishing jobs and thus helping the nation’s overall development.
Further, in a recent article in The Times of Oman, it was recorded that SMEs are the “lifeline of any economy.” This belief was behind the establishment of Sharakah, an initiative backed by the government offering financial support to local entrepreneurs, help build them up, advocate policies that they will benefit from and spread awareness about entrepreneurship. Since 1998 when it was first set up, Sharakah has sought to support Oman’s Vision 2020.
Sharakah has also supported many start-ups and business owners in different regions, from different sectors. It has sought to ensure business sustainability and establish job opportunities. It has supported 70 projects to date. According to Sharakah’s GM Abdullah Al Jufaili, Sharkah seeks out competitive projects that have a committed entrepreneur with plenty of growth opportunities.
In 2014, there are plans for increased privatization in Oman. According to Darwish al-Balushi, the country’s Minister for Financial Affairs, “the 2014 budget will see the announcement of the companies that will be privatized.” The two-fold privatization strategy has already received government approval. Balushi hopes that the strategy “opens the doors for the private sector to venture into new projects on the one hand and reduces the government stake in…companies that are wholly or partially owned by the government.” In general, the Oman business sector will be the beneficiary of all of this both in the short- and long-term.
According to Hamood Sangour al-Zadjali, Oman’s central bank chief, it was anticipated that the country’s banking sector was expected to advance in 2013 between 15 and 20 percent vis-à-vis assets, and between 10 and 20 percent vis-à-vis banking sector profits. There was also a 0.3 percent increase in the region’s crude oil and condensates production in August 2013, as compared with July 2013.