Oman prepares to overhaul its hotel sector for a post-coronavirus world
4 Apr 2020 12:14 pm
This article below appeared in The New Arab on 3 April 2020. As always Sebastian Castelier wrote a well researched article that clearly described the concerns facing the hospitality industry in the Sultanate of Oman.
As Oman’s tourism industry matures and expectations evolve, global hotel brands might be less needed to attract visitors.
Independent hotels could add to the Sultanate's mystique.
As the global economy shuts down to curb the spread of the coronavirus the travel industry has taken an unprecedented hit, and Oman’s nascent tourism sector is no different.
Passengers are not allowed to enter the Gulf country and its flag carrier has suspended flights until further notice.
To survive the economic downturn and preserve their liquidity, hoteliers seek to cut down on operational costs. For those who run branded-hotels, such as Hilton, Sheraton or Marriott, a significant annual budget is paid to the corporation for the right to operate under their name.
"These costs are a major balance sheet item [...] Global chains are profitable - and expensive," said Mac Thomson, CEO of MMIS, an Oman-based hotel management company.
Although international hotels will keep playing an important role in structuring the tourism sector in the Sultanate, alternatives exist. "The destination sells itself," Thomson told The New Arab in reference to Oman's uniqueness, often promoted as an Arabian hidden jewel.
Add to the mystique
Hospitality professionals believe the coronavirus pandemic should spur Oman's Ministry of Tourism to clarify its target markets and revamp a long-term strategy centred on premium tourists, global hotel chains and cruise ships.
By 2040, the Omani government plans to develop 50,000 additional hospitality keys, 85 per cent of which in large and mega resorts.
Read more: Where Oman conquered mountains: A journey through the heart of the sultanate
"Oman is a destination people choose for its uniqueness, not because of the hotel brand," said Pascal Eppink, a well-experienced hotelier who worked for a subsidiary of the country's largest government hospitality developer from 2014 to 2016. Hotels which add to the mystique of the country will be "in a good position", Eppink believes.
|Oman's diverse landscapes and historic assets offer an opportunity for the Gulf country to expand beyond luxury tourism and target niche markets such as cultural travellers, the diving community and trekking aficionados|
Oman's diverse landscapes and historic assets offer an opportunity for the Gulf country to expand beyond luxury tourism and target niche markets such as cultural travellers, the diving community and trekking aficionados.
To charm those tourists, international brands are not a prerequisite and boutique hotels could deliver a more authentic guest experience.
The growing role online platforms play in connecting tourists to hotels opens up possibilities for non-branded properties to gain visibility and thus minimises the power of the chains.
As coronavirus-hit global chains are temporarily closing properties, entrepreneurs believe it is the right time for independent hotels to gain a foothold. "Already a number of hotels have removed the international chains and are looking at changing operators," Thomson noted.
For him, local operators who have a good understanding of the Omani market features will "generally perform better within a tighter budget". While the revenue per available room rate in the capital Muscat has fallen by almost 50 per cent since 2015, they could increase business performances, keep a tight rein on operational costs and lower staffing levels.
|Mutrah, a major tourist destination in Muscat. [Sebastian Castelier]|
Concerns over the top-down approach
However, small entrepreneurs lament a lack of support from the Omani administration.
According to a foreign entrepreneur who had been running a scuba diving business in Oman for 15 years, "nobody was willing to help" when he had the projects to provide his clients with homestay accommodation.
Read more: Coronavirus: Oman's tourism sector takes a hit
Unlike premium tourists who seek branded-hotels, his clients expressed a wish to be hosted in an affordable, nature and friendly-oriented environment.
In Muscat, Mac Thomson also calls for an industry-led body to promote the Gulf country to an international audience rather than a top-down approach.
|Oman is a destination people choose for its uniqueness, not because of the hotel brand|
"The Ministry of Tourism needs to focus on its core business of regulating and monitoring the industry [...] The two tasks need to be separated," he said, hoping to see a Hotel Association or a Tour Guide Association.
Although Oman's laws establish the right to form associations, the Office of the United Nations High Commissioner for Human Rights (OHCHR) said it is non-existent in practice.
To strengthen independent hotels and innovative approaches, MMIS is working with a cornerstone investor from China on selecting unprofitable properties in Oman to turn them into profitable units. "We identified 20 hotels that suit our requirements," Thomson rejoiced.
A strategic analysis of Oman's hotel industry sent to The New Arab by MMIS notes that non-branded hotels enjoy a "greater scope for creative and identity", which is in line with changing needs among international tourists: personalisation over standardisation.
Sebastian Castelier is a journalist reporting on Gulf societies and Asia-Gulf migrations.
Follow him on Twitter: @SCastelier
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