Moving forward in Oman

The man in charge of Omran’s US $10 billion project portfolio, Wael Al Lawati, tells Louise Oakley why continued tourism development and investment will be crucial to keep Oman on the destination radar in light of recent political events in the country.

February’s protests in Oman, which sought political reforms and better pay, have been described as a rare sign of discontent in the normally sleepy sultanate. (Reuters).

The protests were largely peaceful, with violence on February 27 brief but immediately effectual. Hours after demonstrators set cars and buildings ablaze in Sohar, Oman’s ruler, Sultan Qaboos bin Said, gave an order to create 50,000 jobs for citizens in the Gulf Arab state of 2.7 million people, 70% of whom are nationals.

The country has certainly experienced less unrest — and more resolution — than some of its neighbours, but still, as the Middle East now faces a potential slump in tourism, the government, developers and operators alike are keen to tell the trade that “it is business as usual”.

According to Oman Tourism Development Company (Omran) CEO Wael Al Lawati — who is responsible for leading the development some of Oman’s most high profile tourism projects worth US 10 billion in total — the hospitality and travel business must work together to promote the destination.

“Oman has experienced unrest but all parties are keen to report that the protests here are of a different nature than elsewhere, and this includes full support for His Majesty Sultan Qaboos and adherence to peaceful behaviour so that economy is not adversely affected,” says Al Lawati.

“The same sentiment holds for tourism — the last thing anyone wants to see is Oman going off the tourism radar,” he says.

“In this regard, Oman’s Ministry of Tourism has led from day one with news releases to the industry, travel and tourism trade that it is business as usual. Here in Oman, the Ministry is appealing to the travel and tourism trade to consider promoting and selling Oman as a destination, as this needs to happen ahead of any tactical consumer campaigns,” says Al Lawati.

Promoting Oman
However, Al Lawati adds that following the turmoil across the region “we must be realistic and acknowledge that inter-governmental actions are the urgent priority”.

“Visitor numbers to all countries have been dented by the upgraded travel alerts issued by many countries and return to levels where the global travel and tourism trade will advocate leisure and MICE travel to our regions will require all governments looking at measures to make our region a more competitive destination,” says Al Lawati.

“To give one example, streamlined tourist visas would allow the region to maximise the benefits from having three of the world’s mega aviation hubs, as well as tapping into the large passenger transit markets of our regional carriers.”

Regarding Oman’s positioning strategy, to date it has focused internationally on the segments that account for the 30% of world travel numbers that generate 70% of travel expenditure.

“This approach sits within our carry capacity and ensures that visitors to Oman have an immersive experience that includes people-to-people interaction.

We also focus on special interest and responsible tourism and the combination leads to our creative ads being evocative and showcasing the country’s heritage, culture and nature in a progressive and outward looking way,” says Al Lawati.

“The Ministry of Tourism has fully adopted Oman’s new brand mark and is leading its implementation internationally using the call to action — Beauty has an address,” he continues. “The communications strategy behind this is working as Oman’s brand positioning has improved greatly in recent years.

“The Ministry is beginning work on a global awareness campaign that will roll out in late 2011, and we welcome this initiative as the Sultanate of Oman is still a relatively new destination on the global stage,” says Al Lawati.

Hotel Rates
Continued investment and the marketing of Oman as a destination is also crucial to increase hotel rates in Muscat in 2011, says Al Lawati. At present rates are strong, with Muscat reporting the highest ADR for January 2011 out of six markets analysed by STR Global.

Average rate was US$283.93 in Muscat, compared to $270 in Riyadh and $232 in Dubai.

“Our regional hotels have experienced high demand this winter and early summer and are trading at rates that exceed four- and five-star hotels in other cities where discounting is prevalent,” comments Al Lawati.

New supply will have an impact on this, however, he concedes.

“We are seeing many hotel new builds in Muscat and the major cities and this competition across the range of two- to five-star properties will lead to greater price tensioning in the market.

For example, in Muscat the opening of the City Seasons Hotel, along with several smaller hotels and apartments, and the Sheraton’s reopening will see around 1200 additional rooms come on line this year,” says Al Lawati.

“Away from the major cities, 2011 will see resort hotels open at Muriya’s Jebel Sifah and Salalah Beach Resorts, adding to the Millennium Hotel developed by Omran and opened last December, as well as the Sahab Hotel which has just opened its doors at Jebel Akhdar,” he adds.

The added inventory is necessary because of the present supply shortfall, which has helped keep many projects on track despite the global financial crisis

“The industry’s goals are ambitious across all activity areas,” comments Al Lawati. “We want to see investment in regional infrastructure and services, as well as greater effort on industry skills and capacity development so that progresses on from its current hospitality focus to one that is more robust. This will require generational changes in the way we market, do business on line, and fulfill travel outcomes.

“Omran will make a substantial positive difference,” he concludes. “We have around 10 projects in progress and these will deliver next generation resorts and hotels. We also project manage the Oman Convention and Exhibition Centre which, with its hall, break out rooms, business centre and hotels, will enable Oman’s bid for global business and cultural events.”

About Omran
Omran is Oman’s leading tourism-related investment, development and management company, mandated by the government to deliver major tourism projects in line with its vision of positioning tourism as a major economic driver of the future.

Its growing project portfolio is worth US $10 billion, consisting of 10 projects under development or in operation. One of the most high profile of these is the Oman Convention & Exhibition Centre in Muscat, which will include 25,000m² of exhibition space and room to sit 10,000 people in the first phase.

The site will also feature a business park, four hotels comprising a total of 1000 rooms and a shopping mall. As Oman’s first international-standard convention centre, it is designed to establish Muscat as a regional destination serving the MICE business.

Omran is also working towards forming more than 20 different joint venture projects in the tourism development arena.

Asset management is a key business area for Omran, which owns hotel properties such as Al Bustan Palace and InterContinental Muscat — the site of which will be redeveloped to replace the hotel with three new brands — the W, Westin and Element in partnership with Starwood Hotels and Resorts.

Omran’s asset management portfolio currently contains nine properties — which represent a total of 700 plus hotel rooms.