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An Investigation into the Challenges of Tourism Growth in Oman Consumer Perspective Case Solution

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The tourism industry is one of the fastest growing industries in the world as millions of people move from one part of the world to the other for the purpose of recreation, study, vacation, business and family reunion, etc. The Middle Eastern countries receive increasing number of tourists every year and also give tough competition to each other (Sinclair-Maragh & Gursoy, 2015). Oman is one of the most famous countries in the Middle Eastern region that is famous for its old and rich heritage, luxurious tourist’s services and a variety of facilities available to the tourists. Moreover, the significant geological location of the country is also one of the major reasons of the importance of the country. With the increasing number of tourists every year, the pressure on the country is increasing including regional and global competition, increasing concerns about security and immigration issues, management and planning (Al-Najjar, 2014). The government and management teams of Oman need to keep the tourism industry up to date to tackle the challenges faced by the industry and also make sure that the industry is ready to face the global and regional competition (Avraham, 2015).

The literature review is divided into seven major sections, and each section has subsections as well. The second section includes a history of Oman, its culture, economy, tourism and how its tourism grew over decades. The third section explains various sectors involved in the tourism of the country. The fourth section elaborates the challenges that the tourism industry of Oman faces. The fifth section discusses how to maintain a sustainable tourism in the country. The sixth section is a SWOT analysis of Oman and its tourism industry. The seventh section puts light on the GCC and the global competition Oman faces from its neighbouring countries regarding tourism.

Following questions are answered in this case study solution

  1. Introduction

  2. Oman History

  3. Tourism Facts in Oman

  4. The challenges of Tourism Growth in Oman

  5. Balancing Tourism Growth with Sustainability

  6. SWOT Analysis 

  7. GCC and Global Competition

Case Analysis for An Investigation into the Challenges of Tourism Growth in Oman Consumer Perspective

2. Oman History

Oman; an Arab country in the Middle East has a geographic importance in the region as it has the United Arab Emirates in its northwest, Saudi Arabia and Yemen to its west and southwest respectively. The country is also attached to Iran and Pakistan via marine boarders. All these geographical characteristics and being on the mouth of the Persian Gulf gives strategic and geographical importance to Oman. Muscat (capital city) has a very significant trading position in the region as it functions as a trading port in the Gulf (Tour of Oman, 2015).

Through 17th and 19th century, Oman was a powerful country in the region influencing several countries in the region but by the 20th century, the country lost that influence and power after coming under British influence. With the population of about 3.2 million and about $22,000 GDP per capita, this country is under complete monarchy having Qaboos bin Said Al Said as the Sultan, who is in charge since 1970. On the list of countries with rich oil reserves, Oman falls on spot 25, while according to UNDP, Oman’s growth rate in the last forty years has been extensive, and the country falls on 59th spot on the list of the most peaceful countries in the world (BTI Project, 2014).

Arabian Business (214) reported that when Sultan Qaboos had taken charge of the country after his father, he brought several change into the structural framework of the country including economic, educational and political reforms. Being a founding member of GCC (Gulf Cooperation Council), he was also a part of the political reforms including voting rights for citizens who were over 21, which was considered to be a huge change in the country. Oman is considered to be a young nation with about 70% population being under the age of thirty years but the country is still criticised internationally due to its totally monarch system and critics argue that the system does not provide proper political and human rights to its citizens due to the absence of a proper democratic system (BTI Project, 2014).

Sultanate of Oman (2015) mentioned that Oman has a geographically diverse land that includes landscape, desert, coast and mountains as well. This geographical diversity makes Oman a prominent tourism attraction because they get the chance to explore the landscape, coast, desert and mountains in the same country. In the past, the coast of Oman has been under the foreign influence (Iran being one of them) as the coastal strip and ports remained under the foreign domination for several years, while the mountain areas of Oman had always been independent and self-sufficient. Before the advent of Islam, several tribes came to the country and ruled it while it came under Muslim rule in the seventh century (Aramco World, Oman: A History, 2015).

According to BTI Project (2014), the economy of Oman is mainly based on the rules of a free economy, and a major part of the economy relies on oil exports. But those oil reserves are depleting over the years, and the depletion is one of the challenges the country faces. According to the economic survey, the fastest-growing industry of Oman is tourism that is a source of living for thousands of people. Due to the cultural and heritage events in Oman, hundreds of people get attracted to the country every year. In 2012, the capital of Oman ‘Muscat’ was the second most visited city in the world to be visited by international tourists and, therefore, was also stated as the tourism hub of the Arab. The archaeological research stated that Muscat is one of the oldest inhibited cities in the world and reported that even more than 10,000 years back, humans used to inhibit the city. It is something that adds up to the list of reasons why people like to visit Muscat (Sultanate of Oman, 2015).

3. Tourism Facts in Oman

Oman’s tourism industry has been growing very fast over the last couple of years, and the main reason behind it is probably the excessive focus of the government of Oman on the tourism industry. Tourism promotion strategies, focus on heritage and culture, and many other strategic steps helped a lot in attracting international tourists to the country and promote the Tourism of Oman. This section of the report includes details on the tourism statistics of Oman.  

• Travellers

Over the last decade, Oman did not only saw improvements in the inbound tourism but outbound tourism as well. According to the tourism statistics of 2005, 1101 tourists came to Oman and in total spent about 127,663 Omani Rial in the country. In 2006, these statistics rose to 1385 and 146,876 respectively while, after a few years in 2014, a total of 2223 tourists visited the country and the inbound tourism showed more than 8% growth rate that one of the fastest in the region. In 2014, these tourists spent over 250,000 Omani Rial in the country that generated several benefits for the economy of Oman (Oman World Tourism, 2015). 

These tourists spend different amount of time in the country ranging from a few nights to weeks or even months. Over the last couple of year, the number of nights spent by tourists has also increased to a major extent. In 2014, while the number of tourists showed 8.1% growth rate, the number of nights spent in Oman by the tourists showed a growth rate of more than 11% that was a huge progress for the tourism industry. When asked the reason, the tourists in Oman report that they feel safe in the country and even if they plan to stay for a shorter duration time, they enjoy the food, culture and heritage a lot that it makes them want to change their plans and stay for a longer duration (McDonald, 2014).

• Hotels and Accommodations

Regarding accommodation, Oman is a very luxurious country with several five, four and three- star hotels and resorts. In 2005, Oman only had 161 hotels but in 2014, this number rose to 297 that was 7% higher than the previous year. Over these years, not only did the number of hotels increased in Oman, but the size of these hotels (in terms of the number of rooms) also increased. In 2005, the total number of rooms available in all these hotels in Oman was 8132 that rose to 15,363 in 2014 with the growth rate of 7%. (WTTC, 2015). In 2015, the hotels and accommodations in Oman showed significant growth with the number of hotels being 302, with 15,762 total number of rooms and the number of guests in these hotel rooms was as high as 622,806. The average number of nights spent in the hotel rooms also increased. The capital of Oman ‘Muscat’ is the most famous city in Oman for tourist community, and most of the tourists prefer to stay in Muscat. This is true not only because of the variety of facilities, visitor sights and attractions in the city but also because of the accommodation options available to the tourists including five, three and four-star hotel rooms (Destination Oman, 2015).

• Heritage

The heritage of Oman is one of the oldest heritages in the world. This rich culture and heritage of the country are one of the major reasons why hundreds of tourists are attracted to the country every year. Archaeological studies also reveal that there have been evidence of humans inhibiting the country about 10,000 years ago. Apart from that, there are several evidence of other heritages and cultures of peoples that inhibited the cities. The city of Nizwa and Salalah are two beautiful examples of the ancient history of Oman. These two still have the old infrastructure associated to the nations that lived here and, therefore, are major attractions to the tourists that are interested in history and heritage (The Consulate General of the Sultanate of Oman - Australia, 2015).

• Facilities and Services

When it comes to facilities and services, Oman is a lavish country like other tourist countries in the Middle East. The tourists visiting Oman can enjoy various facilities including restaurants that include various cuisines including African, continental, traditional Arabian, French, Far Eastern, and regular fast food restaurants and cafes as well. It has several fancy hotels ranging from five stars to three-stars with lots of services (Ministry of Tourism, 2015). There are various shopping malls in Oman that are worth going to. Moreover, the car rentals service is easily available that can take to every corner of the country. There are several group tours organized in the country and the cruise tour in Oman is also very famous. People can go to traditional markets and shops where they can buy regular as well as traditional goods and antique pieces. There are several multiplex cinemas in Oman as well. Moreover, health and fitness centres in the country, especially, in Muscat, are very famous in the tourist community (Destination Oman, 2015).

4. The challenges of Tourism Growth in Oman

With the increasing number of tourists every year, Oman faces several challenges like any other tourist country in the world. These issues and challenges range from security and immigration issues, problems of employment and financial constraints, and marketing strategy issues supporting the tourism of the country as well. This section explains each of these challenges faced by Oman in detail.

• Immigration

Because the number of people applying for the visa of Oman is increasing day by day, it is becoming more challenging for the immigration office to handle all the visa application while making sure that the screening process is transparent, and the applications are thoroughly scrutinized (Townsend, 2015). The problems do not only increase for the Oman immigrations office, the tourists also face challenges while applying for the visa whether for tourism, employment or any other reason as the application process has become more meticulous and time consuming, and the time span between the application and the outcome has also expanded that creates problems for the tourists (Royal Oman Police, 2015). The tourism pressure is not only creating problems for the regular tourists, but other people who come to Oman for employment also get affected because of the rising pressure as their visa process has also become more difficult. This includes a ban on two-year stay for expats in Oman (Times of Oman, 2015). 

• Security

Along with visa issues and immigration difficulties, Oman is also facing higher security concerns due to increasing number of tourists. This includes not only the security on the airport but the also the entire country, and especially the famous tourists sites. To tackle the security challenges the government of Oman has increased the security measures in the country, but there is still much to do to improve the security and make things more comfortable for the tourists and the common citizens as well (Royal Oman Police, 2015). In its 2015 report, OSAC (2015) mentioned that in just one year, the country’ rating of crime has shifted up to medium from lower that is not a good sign for the economic, political, social, and tourist condition of the country. The rate of crime has not only increased in physical crime, and smuggling but the instance of cybercrime in Oman has also increased.

• Omanisation

In early 2000’s, the Omani government introduced a plan for the citizens of Oman to enhance their employment opportunities. The main idea was to nationalize the employee community and provide employment to everyone that enters into the labour market every year; the plan is considered to be successful so far (Times of Oman, 2015). A report by (Times of Oman, 2014), stated that instead of increasing tourism in the country and Omanisation, there is still a lack of Omanis that are willing to serve in the tourism industry, and the number of expatriates in the industry is more than the proportion of citizens.    

• Employment

A report stated that the number of Oman nationals serving in the tourism industry of the country was 7324 in 2013 while the number of expatriates was 11,207 that is way higher than the number of nationals. Moreover, the number of expatriates in the hotels and restaurants in as high as 71%. Policy makers are still trying to figure out whether it is due to the increasing pressure on the tourism industry that the Nationals do not want to serve in the industry or are there any other potential reasons of these disproportional ties in the industry (Times of Oman, 2014).

• Financial Support

The tourism industry of any country does not grow on its own; it needs a regular financial injection into the industry so that it keep progressing constantly. The tourism minister of Oman also mentioned that the financial support for the industry is not increasing at the same rate as the industry itself (, 2012). Therefore, the financial constraint is one of the major challenges the tourism industry of Oman faces right now. To get the tourism promotion projects keep going, the industry needs more funds so that the increasing pressure on tourism can be tackled easily (McGinley, 2012).

• Marketing Strategy

The rising pressure on the tourism industry is also rising the pressure on the marketing industry that strives to promote the industry. As the country also faces competition from the other countries in the region, it needs to focus more on the marketing and tourism promotion to give the tourists a reason to prefer Oman over other Middle Eastern countries (Oman Tourism, 2015). To promote the tourism of Oman and enhance the marketing strategy, the Sultanate of Oman has been working on several strategies including organizing marketing campaigns and events, print media, school program, and airline plans as well but report says that there is still much to do considering the challenge of increasing pressure on the industry, and limited funds as well (Oman Air, 2008)

5. Balancing Tourism Growth with Sustainability

The tourism industry of any country plays a significant role in the growth of the economy, as it brings capital to the country and enhances the cash flow, helps improve the reputation of the country nationally and internationally, and also provides several political and strategic benefits to the economy. But as the tourism industry starts to grow beyond a certain point, it generates several challenges and difficulties for the economy that can in turn give rise to economic, political and strategic issues. In that challenging circumstances, it is the job of the government of the country to make sure that the tourism growth is sustainable, and is balanced with other sectors of the economy (Al-Najjar, 2014). 

Sinclair-Maragh & Gursoy (2015) reported that the main idea of sustainable tourism is to make sure that the tourism is growing at a certain rate and will keep on growing on that rate without negatively affecting the economic, social, ethical, political, environmental, cultural, and strategic aspects of the country. The government tries to make sure that the tourism is supported with the available resources and it also does not become a reason of reduction in the resources available to the other sectors of the country. To maintain the sustainable tourism in the country, every government has a management team of experts that strives to form policies for the establishment of policies related to sustainable tourism. These tourism policies need full consensus and participation of all the stakeholders in the industry. The policy formation for sustainable tourism is not a one-time phenomenon; it is a continuous process that keeps growing with the growing tourism industry and also needs a revision every time with the changes in the tourism situation of the country (UNWTO, 2005).

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