Interview: Peter Walichnowski
How is Omran helping to bolster the growth of small and medium-sized enterprises (SMEs)?
PETER WALICHNOWSKI: The participation and growth of SMEs in the tourism sector is a very important part of Vision 2040, and there are a number of programmes and funding vehicles in place to support SMEs. Omran has an active in-country value strategy whereby we include SMEs and local suppliers in the procurement and management phases of our projects, outsourcing to local businesses wherever possible. We are also going to expand the remit of the Oman Tourism College to provide training and development opportunities for Omanis to set up and work in SMEs.
What steps are being taken to strengthen lower-end accommodation offerings?
WALICHNOWSKI: Omran is developing hospitality assets across the spectrum, from two- to five-star hotels, which means that we will be able to service a wide range of customers and budgets. We’ll have about 2400 rooms operational by end-2018, and aim to have about 5000 rooms open – with our development partnerships – across the country by 2021.
We have also developed an in-house hospitality brand called Atana, which we use to self-manage our smaller hotels and guest houses – usually two- to three-stars. For example, Atana operates two hotels in Musandam, which are at the centre of a natural environment.
A parallel market to high-end tourism is adventure tourism, which does not necessarily consist of high-spending parties. We are working with the Ministry of Tourism to execute several adventure projects in Musandam, including nature trails, zip lines and via ferrata (protected climbing routes).
How do you see the relationship between supply and demand in the hotel segment evolving?
WALICHNOWSKI: For many years the hotel market had an undersupply of high-quality offerings. Because of the limited options, tourists had to pay higher prices, which had an impact on the perception of value for money of tourism in Oman.
However, we are now seeing a reverse trend, where new three- to five-star hotels are entering the market and lifting the standards and appeal of Oman as a destination for tourism. With the opening of two international airports in Muscat and Salalah, in addition to the international-standard hotels found across the country, Oman has sent a strong signal to the world that it is investing in the tourism sector for the long term and is determined to achieve the objectives of the 2040 National Tourism Strategy.
Over the short term, hotel owners, like Omran, face the challenge of potential room oversupply, which can dampen investor returns for a few years, but after that we will see improvement as demand continues to grow and begins to outstrip supply. This is a normal trend when developing the tourism sector within any country. Omran has a long-term perspective and undertakes projects that will benefit the country not just for five years, but for the next 50 years.
What can be done to further promote the market to attract foreign investment?
WALICHNOWSKI: Oman provides one of the safest and most transparent investment environments in the region. Foreign investors can easily find an avenue to invest in, especially in the tourism sector. Institutions, corporations and high-net-worth individuals can invest in joint ventures with Omani entities and receive state support to acquire land suitable for development, either as an integrated tourism complex or otherwise.
Alternatively, regional investors can buy ownership stakes in existing hotels, either as a single asset or a portfolio. Additionally, Omran is exploring the option of listing its hotels on the stock exchange, which would provide another avenue for local and foreign investors to participate in the growth of the tourism industry.
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