Oman Tourism Report Q1 2009

According to the latest figures, in 2008 tourism accounted for just under 4% of Oman's GDP. However, the Sultan plans to target wealthy niche tourists by focusing on cultural, environmental and adventure packages. The government also intends to upgrade tourism infrastructure and increase its overseas advertising, with a particular focus on the EU, the US and Asia. There are presently eleven five-star hotel or resort complexes in Oman, but many more are either planned or under construction. In addition, there are a large number of lesser rated hotels. The most popular form of travel accommodation to date has been serviced apartments.

Oman has a fairly well-developed physical infrastructure, particularly following the oil boom of the last few years. However, the same can hardly be said for telecoms and power supply. For example, it is estimated that only 7.53% of Omanis used the internet in 2006, according to the International Telecommunications Union, with only 0.72% using broadband. For fixed line telephones, the proportion was also low, at 10.3%. However, mobile phone penetration is higher, at a rate of 70%.

With respect to recent global financial uncertainty, the GCC states have suggested that their economies are better placed than most to weather the enveloping global financial crisis, but in Oman's case, the insulating shield provided by the massive liquidity boom of the last five years is less watertight. Unlike most Gulf oil producers, the non-OPEC country's oil and gas development projects are largely financed through debt, as acknowledged by Energy Minister Mohammed Bin Seif al-Rumhy in November; the drying up of the project finance market will therefore materially affect key projects intended to grow oil production to 800,000 b/d in 2009. Since oil and gas accounts for nearly half of Oman's output, the sultanate will feel the economic pinch to a greater extent than its Gulf neighbours over the next couple of years.

Despite a general distaste for engaging in substantive political reform, the Omani leadership has started to think more carefully about upgrading its institutional apparatus - seemingly in response to international pressure. The most intriguing development, and one that may prefigure other changes through 2009, is the establishment of an Oman Human Rights Commission – a move that triggered the sultanate's removal in November from an official US State Department list of countries that it said had not done enough to stop human-trafficking.