Tourism in the greater Middle East and North Africa (MENA) has been dampened by security concerns; what does this mean for Oman in 2016, especially in tandem with falling oil prices and interrelated budgetary constraints?
After attacks led or inspired by the so-called Islamic State (IS), a myriad of security concerns plague would-be touristic destinations such as Lebanon, Egypt, Tunisia, and to the north, Turkey. While rhetoric about terrorism’s actual risks is inflamed through the West’s media machine, bombings and attacks against soft targets that occur in a general region impact the destination choices of tourists.
The Sultanate of Oman has been pursuing a robust strategy to increase tourism, aiming to diversify its economy and attract more visitors. However, on January 15 the government took out a loan of 1 billion USD to cover the deficit caused by the falling price of oil. Not a member of OPEC, what is the future for Oman’s tourism capacity in face of possible short-to-mid-term financial constraints?
Security and Money
Security threats (perceived or real) in the greater region impacts travellers seeking an experience amongst its diverse cultures and sights. Places such as Libya, Yemen, Syria, and Iraq are obvious no-goes. Meanwhile, Turkey’s tourism has been negatively impacted by the recent bombing in Istanbul’s Sultanahmet district.
Relatively recent IS-related terrorist attacks in Tunisia, Lebanon, and Egypt also contribute to apprehension and make those interested in visiting the region seek out destinations untouched by political or extremist violence
The attractions of the United Arab Emirates (UAE) are therefore a natural tourism draw, while also offering easy road and air access to the nature-heavy pull of adjacent Oman. Those pursuing adventure in the Middle East are increasingly looking towards Oman as an enticing choice, and most importantly of late: a safe choice.
Oman has been ramping up tourism and business-centred infrastructure aimed at sustainable economic diversification. Recently, a new CEO was chosen to lead the Omani Tourism Development Company (Omran). James Wilson previously drove projects such as the Palm Jumeirah in Dubai, UAE.
Large-scale development initiatives such as Madinat Al Irfan and the Oman Convention and Exhibition Centre in Muscat demonstrate the future-thinking endeavours that Omran and partners could be capable of implementing in the face of growing urbanization and touristic interest.
The $1.3 billion Mina Sultan Qaboos Waterfront plan in particular meets the growing desire for luxury waterfront living – among tourists and locals alike. Littoralization, meaning an inclination for things to concentrate on coastlines, is not a new occurrence. Nonetheless, a new framing of the term, ‘luxury littoralization’ can be applied towards the urban development and tourism industry, evident across the Gulf, MENA, and beyond, marking the desire for exclusive coastal access in the midst of urban settings.
Examples are the aforementioned Palm Jumeirah in Dubai, UAE, the Marina Bay in Singapore, or the South Boston Waterfront developments in Massachusetts. Oman possesses a striking natural shoreline, and efforts for coastal development fall in line with the larger trend.
Prioritizing short to mid-term projects in face of shrinking oil revenues could offset a long-term economic downturn through steady market diversification – if it is realistic to do so during the current crisis.
Will these plans come to fruition?
The impending financial and budgetary issues surrounding the oil price drop will not be solved in the short-term. On January 15, Oman cut government subsidies on fuel, as oil prices continue to spiral downwards, increasing local costs by a third. In addition, austerity measures have been applied to the official 2016 budget to cope with the projected shortage of oil revenues.
To conclude, the growing littoralization of urban areas, coupled with the growing focus on Oman as a tourist destination, could instigate a growth in development endeavours in the Sultanate. It remains to be seen, however, if the decline in the price of oil causes enough cutbacks to prevent the full implementation of these ambitious plans.
Additionally, economic prosperity and tourism-related GDP increases in Oman are contingent upon a continuing level of security and lack of high-profile terrorist attacks in the region. Any change of the status quo could harm these initiatives and wreak economic havoc alongside a crippling fall in oil proceeds.
