1
6 Current economic indicators
10 Tourism growth in Oman
14 Case study: Oman Convention & Exhibition Centre
May 2015 / A publication by Oman Tourism Development Company
Developing new horizons for a sustainable tomorrow
Issue 01 May 2015
Developing new horizons for a sustainable tomorrow
KNOW HOW . RESPECT . BEYOND
CONTENTS
omran.om
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
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. 3
Issue 1 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.
4
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-Lawati Group CEO, Omran
5
GROWTH 2013 - 2014
May 2015
1,482,470
1,500,000
What are the economic indicators?
Issue 1
2
1,342,190
1,000,000 599,000
701,630
10.5% revenue growth
574000
559,509
25.4% guest growth
500,000
10.4% occupancy rate
1
November 2013
0
OMR in 4-5 star
Guests
hotel revenues
OIL PRICES 2014
November 2014
Occupancy
3
USD per barrel 120 100
85.6%
85.6% OF
GOVERNMENT
REVENUE GENERATED FROM THE OIL AND GAS SECTOR
17.5%
17.5% OF EXPORT REVENUE WAS CREDITED TO
COMMODITY EXPORTS
FROM NON-OIL ORIGINS
13.1% 13.1%
THE CONTRIBUTION OF SERVICES ACTIVITIES
(INCLUDING TOURISM) TO THE GDP INCREASED BY
93.06
89.74 78.6
80
53.31
60 40 20 0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sept
Oct
Nov
Dec
13.1% FROM 2013 – 2014 Source 1 National Centre for Statistics & Information (NCSI)
6
104.08
101.14
Source 2 NCSI Statistics Bulletin December 2014 3 http://sa.investing.com/commodities/crude-oil 7
Issue 1 May 2015
What does the WTTC say about Oman?
4
Highlights from 2015 World Travel & Tourism Council report
GDP: DIRECT CONTRIBUTION
2.6% 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 CONTRIBUTION 15
2
48
Ranked number 15 worldwide in terms of growth in travel and tourism investment
Oman is ranked number 2 worldwide in terms of growth of travel and tourism’s direct and total contribution to employment (2015 forecast)
2015 growth forecast ranks Oman at number 48 globally in terms of travel and tourism’s direct contribution to GDP
5.7% 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 CONTRIBUTION
44,500 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 CONTRIBUTION
90, 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). By 2025, travel and tourism will directly are forecast to account for
72,000 jobs in the Sultanate
17 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)
VISITOR EXPORTS
Generated 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).
INVESTMENT
In 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.
All values are in constant 2014 prices & exchange rates 8
Source
4
WTTC - Oman - 2015 - Travel & Tourism 9
Issue 1 May 2015
5
Source 5 NCSI & centreforaviation.com 10
2,500
626 765
2,000
30
16
Direct
1,500
+ Indirect
1,000
+ Induced
500
2025
2015
= Total contribution of Travel & Tourism
2014
0
44
Employment (‘000)
306
2013
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
3,000
2012
th
3,500
2011
The Sultanate was voted number 6 in the top travel destinations for 2015 by the Wanderlust Travel Magazine
GDP (2014 OMRmn)
2014 OMRmn
2010
7
6
th
BREAKDOWN OF TRAVEL & TOURISM’S TOTAL CONTRIBUTION TO GDP AND EMPLOYMENT 2014
Induced
2009
Oman named number 1 travel destination for 2015 by the global travel industry website skift.com
Indirect
2008
st
Direct
2007
1
Oman travel – International Recognition
TOTAL CONTRIBUTION OF TRAVEL & TOURISM TO GDP
2006
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.
6
2005
Tourism growth
Source 6 WTTC - Oman - 2015 - Travel & Tourism 11
Issue 1 May 2015
What are the challenges that we face?
What is Omran’s role to meet the challenge?
7
It is estimated that more than 1 billion USD are spent annually by outbound tourists, a quarter of which is dedicated to shopping
Muscat is in the top three for having the most expensive hotels according to study by hotels.com
The average night stay for inbound visitors is 7 nights - the average stay for outbound tourists is 22 nights
The Sultanate witnessed 1,916 million foreign tourists to the country versus 4,301 million outbound tourists, as on the end of 2013
For each OMR spent by an international tourist inside the Sultanate, there is 1.8 OMR spent by a departing tourist outside Oman
INBOUND Vs OUTBOUND TOURISM EXPENDITURE 450,000
Inbound tourism expenditure
400,000
Outbound tourism expenditure
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.
350,000 300,000 250,000 200,000 150,000 100,000 50,000 0
12
2009
2010
2011
2012
Developing additional hospitality projects that help manage the boom in hotel prices and cater for the growing inbound tourism in Oman
Enhancing the infrastructure, scope and capacity of the tourism sector in Oman
Developing premium malls, and international brand exposure to residents and visitors
Creating new destinations and attractions to increase average expenditure and nights spent by international tourists in Oman
Investing in local talent, capitalise on Omran’s vision of developing capacity and capabilities within the tourism sector
OMRAN’S COMMITMENT TO LOCAL DEVELOPMENT 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 our knowledge, but also shaping the future of the nation on its path towards prosperity and sustainability.
2013
Source 7 Ministry of Tourism / Tourism Statistics Bulletin 2005-2013
13
Issue 01 April 2015 A publication by Omran
a
Case study A LANDMARK BUSINESS DEVELOPMENT
b
c
d
Scheduled 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.
the project will generate
295,000,000 OMR in local spending
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 14
15
Issue 1 May 2015
Postage & courier
Facility management
IT services
Marketing firm
Stand design
Tourism/Sightseeing
Security
Entertainment services
I SP HO
Low
POTENTIAL
High
Car rental
TA LI TY
IT services
Catering services Postage & courier
Maintenance & operations
Facility management
Printers
Retail shops
Marketing firm
Taxi & limo services
Travel agent
Logistic services
F&B
Security
Maintenance & operations Convenience services
Facility management
Food supply companies Travel agent
Printers
Shop design
Shop fit-out
Maintenance & operations
IT services
Eng. Wael Al-Lawati Group CEO, Omran
Fitness centre
Legal firm
Adventure centers
Convenience services
F&B
Facility management
IT services
M AL L
Event management
Travel agent
Convenience services
Security
Security
Printers
Retail shops
Taxi & limo services
F&B
Event management
Taxi & limo services Travel agent
Car rental
Retail shops Maintenance & operations
F&B
“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.”
Catering services
BU SI N E
Retail shops
RK PA
CO NV EN TI O
N
Equipment rental (e.g. A/V)
SS
Potential opportunities for SMEs The development will provide various opportunities to Oman’s SMEs in the areas of operations, services, retail, F&B and transport. 8
RE T N CE
Travel agent
C CE O
Note: Potential is measured by assessing the opportunity size, number of jobs and quality of jobs. Source 8 Booz & Company 16
17
KNOW HOW, RESPECT & BEYOND
omran.om