MUSCAT: Oman’s tourism sector is set for more growth, with direct benefit to the economy project for the coming years. The focus remains on involving the local community in building the sector as it is developed to strengthen the economy.

The government has identified tourism as a sector with strong growth potential and a key source of jobs for Omani nationals, while a steady increase in arrival numbers is demonstrating growth in Oman’s tourism industry, according to a new report from the country’s National Centre for Statistics and Information (NCSI).

“We plan to focus on developing tourism capacity with added local value across the sultanate,” H E Maitha al Mahrouqi, Undersecretary in the Ministry of Tourism (MoT), has been quoted as saying by the Oxford Business Group (OBG) in its report on Oman tourism.

“Armed with our new Oman Tourism Strategy (OTS), we will focus on identifying and supporting strategic investors, creating new jobs in the sector, encouraging and facilitating local small and medium-sized enterprises, developing a comprehensive tourism supply chain and engaging with local communities by building tourism awareness and involving them in our development process.”

The sector currently accounts for 2.2 per cent of Oman’s GDP, as per NCSI figures, with inbound tourism generating RO250.9mn last year – nearly double the amount earned in 2005. Meanwhile, domestic travel earnings topped RO970mn, up three-fold over the period.

According to the latest World Travel and Tourism Council (WTTC) report, the industry’s contribution to GDP is expected to increase by an average of 6.1 per cent per year till 2025, to reach 3.3 per cent of GDP.

Direct employment in the industry is also set to climb, expanding from its present 2.8 per cent of the workforce, representing some 44,500 jobs, to 3.7 per cent, or 72,000 positions by 2025, for an average increase of 3.8 per cent per annum over the period.

If recent trends in arrivals and stay durations continue, the growth rates projected by WTTC may be conservative estimates. According to NCSI, arrival numbers have increased by an average of 7.4 per cent per year over the past decade, rising from 1.1m in 2005 to nearly 2.1m last year.

In 2014 more than 70 per cent of visitors stayed for more than one night. Average stays rose from five nights in 2005 to 7.4 in 2014. Last year alone the average visit duration increased by 0.5 nights, contributing to a ten per cent year-on-year increase in inbound tourist expenditure.

While inbound visitor numbers are on the rise, travellers’ motivations for visiting Oman have remained relatively static over the past five years. On an average, around one-third of travellers come for leisure and recreation, while about 39 per cent visit friends or relatives; the rest come largely for business.

Although increasing arrivals from Asia and Europe have contributed to the sector’s growth over the last decade, inbound visitors from other GCC countries continue to dominate, hitting a record 961,306 last year. When combined with the 129,869 visitors from other Arab states, this represents well over 50 per cent of all arrivals in 2014.

While inbound tourism nearly doubled between 2005 and 2014, growth in domestic tourism was even more marked, with most indicators increasing three-fold over the past decade.

This may be the result of both rising levels of disposable income for Omanis, and the success of government and private sector efforts to develop facilities catering to vacationing citizens.

In particular, the country has sought to promote domestic tourism in Dhofar during the khareef season. Domestic travel during the khareef season has doubled since 2010, rising by 9.4 per cent in 2014 alone.

Though Oman’s plan seems to be working, with solid industry revenues across the board, NCSI data also shows a widening gap between local sector income and money spent abroad by Omani citizens and residents, with a balance of RO163.5m ($424.6m) in favour of overseas spending posted in 2014. Oman will be looking to narrow this gap, as MoT’s OTS is deployed and more tourism infrastructure is developed across the country, increasing the appeal of holidays at home.

Average room occupancy rates reached 49.2 per cent last year, marking the fourth consecutive increase. This is particularly significant given the growth in available hotel space over the period, with more than 3,100 rooms added to accommodation stocks since 2011. As the main entry point and the country’s business hub, Muscat was the dominant governorate in terms of occupancy rates, registering an average occupancy of 61.7 per cent in 2014.

While most governorates saw occupancy levels remain relatively stable, additions to existing room are likely to have obscured increases in volume terms.

The NCSI report also showed that occupancy rates in Oman’s four and five-star hotels were far higher than in most other segments, averaging around 60 per cent per night, compared to fewer than 40 per cent for one and two-star accommodations.

A modest slip in occupancy rates for three-star hotels, when taken alongside the rise in occupancy rates for rooms at higher rated hotels, could also be an indicator of Oman’s rising appeal as a destination for more affluent local and international travellers.

This continued trend in up-market travel is driving increased project development in the high-end tourism segment, with several new four and five- star hotels either under construction or in the planning stages, both in Muscat and beyond.