May 2015 / A
publication by Om
an Tourism D
evelopment Com
pany
Developing new horizons for a sustainable tomorrow
6 Currenteconomic indicators
10Tourism growth in Oman
14Case study: Oman Convention & Exhibition Centre
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In line with Omran’s sustainability policy, the paper we have used for this publication is Lenza Top Recycling Super. It is recycled paper produced of 100 % recovered fibre. Manufactured without optical brightening agents and chlorine bleaching. High whiteness is achieved thanks to a special converting process for recovered fibre.
Developing new horizons for a sustainable tomorrow CONTENTS
4 Why is tourism the future?
6 What are the economic indicators?
8 What does the WTTC say about Oman?
10 Tourism growth
12 What are the challenges that we face?
13 What is Omran’s role to meet the challenge?
14 Case study: Oman Convention & Exhibition Centre
omran.omKNOW HOW . RESPECT . BEYOND 3
Issue 01
May 2015
Why is tourism the future?
Tourism has a real power to change the world by providing opportunities for a better future for everyone it touches. The United Nations World Tourism Organization (UNWTO) pegs the global number of annual tourists as one billion, while the value of the tourism sector exceeds One Trillion Dollars, accounting for 9% of the global Gross Domestic Product (GDP). The sector provides one out of every 11 new job opportunities in the world, and is considered as one of the leading job and export revenue generators by the World Travel & Tourism Council (WTTC) with the sector accounting for some 30% of services exports worldwide.
With recent oil prices moving under USD $50 per barrel, which is the lowest closing price since May 2009, economic challenges are shared by nations in the region. Given the economic exposure due to price volatility on the international energy market, the focus is increasingly shifting towards tourism sector investments and giving them development priority in the move towards a more diversified and stable economic future.
Rapid growth in travel and tourism industry is even more significant given the impressive performance of the sector during the last few years, as well as the positive growth forecast for Oman by the WTTC. It is estimated that by 2023, the earnings contribution from the travel and tourism industry in the Sultanate will total 3.7 billion OMR annually. These impressive numbers outline a positive climate in Oman for growth in the tourism sector and position the sector ideally for further project development. This, combined with the upward trend of the buoyant real estate market in the Sultanate, which grew by 55.7% at the end of Q3 2014, sets the stage for promising development opportunities in the years ahead.
Eng. Wael Al-LawatiGroup CEO, Omran
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Issue 1
May 2015
USD per barrel
13.1%
What are the economic indicators?
1
17.5% 13.1%
85.6% OFGOVERNMENTREVENUE GENERATEDFROM THE OIL AND GAS SECTOR
THE CONTRIBUTION OF SERVICES ACTIVITIES (INCLUDING TOURISM) TO THE GDP INCREASED BY 13.1% FROM 2013 – 2014
17.5% OF EXPORT REVENUE WAS CREDITED TO COMMODITY EXPORTS FROM NON-OIL ORIGINS
GROWTH 2013 - 2014 2
OIL PRICES 2014 3
Source 2 NCSI Statistics Bulletin December 2014 3 http://sa.investing.com/commodities/crude-oilSource 1 National Centre for Statistics & Information (NCSI)
OMR in 4-5 star hotel revenues
Jan JulFeb AugMar SeptMay Nov
Guests
Apr Oct
Occupancy
Jun Dec
1,500,000
1,000,000
500,000
0
120
100
80
60
40
20
0
1,482,470
701,630 599,000
89.74
104.08101.1493.06
78.6
53.31
1,342,190
559,509574000
10.5% revenue growth
25.4% guest growth
10.4% occupancy rate
November 2013 November 2014
85.6%
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Long term growth forecast ranks Oman at number 17 worldwide in terms of travel and tourism’s total contribution to GDP (2015 – 2025 growth forecast)
By 2025, travel and tourism will directly are forecast to account for
72,000 jobs in the Sultanate
Ranked number 15 worldwide in
terms of growth in travel and tourism
investment
2015 growth forecast ranks Oman at number
48 globally in terms of travel and tourism’s direct contribution
to GDP
What does the WTTC say about Oman? 4
Source 4 WTTC - Oman - 2015 - Travel & Tourism All values are in constant 2014 prices & exchange rates
GDP: DIRECT CONTRIBUTION2.6% direct contribution to Oman’s GDP in 2014 at OMR 765.1 million, and forecast to rise by 5.2% in 2015.Forecast growth of 6.1% pa by 2025.
GDP: TOTAL CONTRIBUTION5.7% Total contribution to Oman’s GDP in 2014 at OMR 1,697.5 million, and forecast to rise by 3.8 % in 2015.Forecast growth of 6.2% pa from 2015 to 2025.
EMPLOYMENT: DIRECT CONTRIBUTION44,500 jobs (2.8% of total employment) in Oman directly supported by travel and tourism sector, and forecast to rise by 11% in 2015.Forecast job growth of 3.8% pa from 2015 to 2025, totaling 72,000 jobs.
EMPLOYMENT: TOTAL CONTRIBUTION90, 500 jobs (5.7% of total employment) in Oman supported by travel and tourism sector, and forecast to rise by 9.4% in 2015.Forecast job growth of 3.8% pa from 2015 to 2025, totaling 143,000 jobs (7.5 of total employment).
VISITOR EXPORTSGenerated OMR743.8mn (3.6% of total exports) in 2014. Forecast to growth by 6.0% in 2015, and grow by 7.1% pa, from 2015-2025, to OMR 1,565mn in 2025 (5.6% of total).
INVESTMENTIn 2014 was OMR 267mn, or 3.6% of total investment. It should rise by 10.3% in 2015, and rise by 6.3% pa over the next ten years to OMR 541mn in 2025.
Highlights from 2015 World Travel & Tourism Council report
Oman is ranked number 2worldwide in terms of growth
of travel and tourism’s direct and total contribution to employment
(2015 forecast)
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Tourism growth 5
Oman experienced a 12% increase in visitor numbers through the first 9 months of 2014, with the Sultanate welcoming 1.58 million visitors during this time. New hotels in the Sultanate has also been rising at a steady rate, with room numbers forecast to further increase by 32% by 2017.
Oman travel – International Recognition
BREAKDOWN OF TRAVEL & TOURISM’S TOTAL CONTRIBUTION TO GDP AND EMPLOYMENT 2014
GDP (2014 OMRmn)
= Total contribution of Travel & Tourism
Empl
oym
ent (
‘000
)
2014 OMRmn
Direct
765 44 30 16
626
306
+ Indirect
+ Induced
3,500
3,000
2,500
2,000
1,500
1,000
500
0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2025
Direct Indirect Induced
TOTAL CONTRIBUTION OF TRAVEL & TOURISM TO GDP
st1Source 5 NCSI & centreforaviation.com Source 6 WTTC - Oman - 2015 - Travel & Tourism
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The Sultanate was voted number 6 in the top travel destinations for 2015 by the Wanderlust Travel Magazine
Oman was named 7th out of 100 countries in the MasterCard-Crescent Rating Global Muslim Travel Index (GMTI) 2015, the most comprehensive research on the sector
th
th
Oman named number 1 travel destination for 2015 by the global travel industry website skift.com
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On a global scale, it is estimated that each direct employment in the travel and tourism sector creates three indirect employment opportunities, which in turn benefits the local community and economy.
Omran’s Local Development Investment (LDI) Policy ensures that the Company’s contracting favors local businesses and suppliers while prioritizing training and recruitment of nationals within the growing tourism and hospitality industry. Omran’s LDI goes beyond the short-term goal of immediate returns such as buying locally and training nationals. We invest in the development of local companies and the communities in which we operate. In doing so we are not only investing and transferring ourknowledge, but also shaping the future of the nation on its path towards prosperity and sustainability.
What are the challengesthat we face? 7
What is Omran’s role to meet the challenge?
OMRAN’S COMMITMENT TO LOCAL DEVELOPMENT
The increased growth of outgoing tourism expenditure compared with the growth of inbound tourism expenditure during the period of 2009-2013, indicates the market’s requirement to create more tourism-friendly, recreational and retail facilities to be able to keep local spending within the country.
INBOUND Vs OUTBOUND TOURISM EXPENDITURE
2009 2010 2011 2012 2013
Inbound tourism expenditure
Outbound tourism expenditure
450,000
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
It is estimated that more than 1 billion USD are spent annually by
outbound tourists, a quarter of which is dedicated to shopping
Enhancing the infrastructure, scope and capacity of the tourism sector in Oman
Developing additional hospitality projects that help manage the boom in hotel prices and cater for the growing inbound
tourism in Oman
Muscat is in the top three for having the most expensive hotels
according to study by hotels.com
Developing premium malls, and international brand exposure
to residents and visitors
The average night stay for inbound visitors is 7 nights - the average stay
for outbound tourists is 22 nights
Creating new destinations and attractions to increase average
expenditure and nights spent by international tourists in Oman
The Sultanate witnessed 1,916 million foreign tourists to the country versus
4,301 million outbound tourists, as on the end of 2013
Investing in local talent, capitalise on Omran’s vision of developing capacity and capabilities within
the tourism sector
Source 7 Ministry of Tourism / Tourism Statistics Bulletin 2005-2013
For each OMR spent by an international tourist inside the Sultanate, there is 1.8 OMR spent by a departing tourist outside Oman
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Case study
A LANDMARK BUSINESS DEVELOPMENTScheduled to open in 2017, this landmark project is the centrepiece of Oman’s business development programme aimed at establishing the Sultanate as a major regional venue for regional and international events. OCEC complex will include four hotels, a business park, retail shopping areas and residential districts, surrounded by a nature reserve which will be a haven for Oman’s exotic birdlife, parklands and wadi (valley) park are also part of this picturesque precinct.
In March 2013 Omran released a study on the OCEC project conducted by Booz & Co., which projected the project will generate 295 million Omani Riyals in local spending and estimated that OCEC will create up to 24,000 direct and indirect jobs and contribute 200-240 million Omani Riyals to the national economy by 2030. The study also included that by 2030 the OCEC will contribute 140-170 million Omani Riyals to GDP, 30% of this amount from tourism revenues. The Booz & Co. socio-economic impact assessment study on OCEC concluded that a far-reaching and positive impact is expected for Oman’s economy and for job creation for citizens within the OCEC and surrounding the development.
Images / a. A world class venue b. Concourse c. Auditorium d. Grand Ballroom
the project will generate 295,000,000 OMR
in local spending
a
b
c
d
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Issue 01
April 2015
A publication by Omran
Potential opportunities for SMEs 8
The development will provide various opportunities to Oman’s SMEs in the areas of operations, services, retail, F&B and transport.
“SMEs represent a fundamental part of the economic fabric in the Sultanate and we are working together to add value to their operations. Omran’s local development Investment (LDI) policy ensures consulting, contracting, procurement and supply chain processes are directed towards Omani businesses. We hope that forging successful partnerships between OCEC and potential local suppliers will generate higher, faster and stronger returns for both their businesses and Oman.” Eng. Wael Al-LawatiGroup CEO, Omran
Note: Potential is measured by assessing the opportunity size, number of jobs and quality of jobs. Source 8 Booz & Company
BUSINESS PARK
CONVENTIO
N CENTRE
HOSPITALITY OCEC MALL
Retail shopsRetail shops
Adventure centers
Tourism/Sightseeing
Retail shops
Retail shops
Car rental
Car rental
Low POTENTIAL High
IT servicesIT services
IT services
Equipment rental (e.g. A/V)
IT services
Fitness centre
Legal firm
Facility management
Facility management
Facility management
Facility management
Maintenance & operationsMaintenance &
operations
Maintenance & operations
Maintenance & operations
Printers
Printers Printers
F&B
F&B
Food supplycompanies
F&B
F&B
Convenienceservices
Convenienceservices
Convenienceservices
Cateringservices
Cateringservices
Marketing firm
Marketing firm
Event management
Event management
Entertainmentservices Taxi & limo
services
Taxi & limoservices
Taxi & limoservices
Logistic services
Travel agent
Travel agent
Travel agent
Travel agent
Travel agent
Postage & courier
Postage & courier
Shop design
SecuritySecurity
Security
Stand design Security
Shop fit-out
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Issue 1
May 2015
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omran.omKNOW HOW, RESPECT & BEYOND