Gulf | Oman
Mega-tourism projects in Oman hit by offshore financing problems
Oman's Ministry of Tourism has cited "problems in securing offshore finance" for a slowdown in the implementation of a slew of large-scale integrated tourism complexes around the sultanate.
- Staff Report
- Published: 11:15 July 1, 2009
Muscat: Oman's Ministry of Tourism has cited "problems in securing offshore finance" for a slowdown in the implementation of a slew of large-scale integrated tourism complexes around the sultanate.
Mohammad Bin Hamood Al Tobi, Undersecretary of the Ministry of Tourism, was quoted by a tabloid on Wednesday as stating that an overseas lending crunch was largely to blame for delays in the execution of these lavish tourism schemes.
"This (slowdown) is caused to a large extent by the stringent conditions applied at present by lending institutions. We also expect that the financial problems of the investors in integrated tourism complexes are relaxing and the implementation process will soon pick up its previous pace," the tabloid quoted Al Tobi as saying.
The sultanate, in partnership with a number of leading regional developers, is investing billions of dollars into several high-end integrated tourism and residential developments in Muscat, Al Sawadi, Yiti, Ras Al Hadd, Shinas, and Salalah, among other locations. These projects are part of a strategy aimed at attracting "high yield responsible travelers" through the provision of world-class gold courses, marinas for yachts and sports craft, and environment friendly eco-tourism resorts.
The government has roped in well-established developers, including Sama Dubai of the UAE, Orascom of Egypt, Qatari Diar of Qatar, and Saraya of Jordan, as joint venture partners in these ambitious schemes. The liquidity crunch has hit almost all of the projects, bringing some to a complete standstill, while slowing down the pace of others.
In contrast, however, the hospitality sector in Oman fared relatively well during the key 2008-2009 winter season, said Al Tobi. “Strong regional and domestic activity has lessened the impact of the global economic downturn on the tourism sector. Hotels and resorts are performing well but it remains to be seen if these establishments would be hit by the crisis in the future, though the Government is optimistic that these establishments would not face any serious financial problems.''
Citing statistics issued by the Ministry of National Economy, the official noted that tourist arrivals had burgeoned to around 400,000 during the fourth quarter of 2008, generating around OMR 51 million ($131 million) in revenues for all classes of hotels and lodges. Data available for 4- and 5-star hotels indicate a notable increase in bookings during the first quarter of this year. Guest numbers rose to around 217,000 during Q1 of this year, from 184,000 during the same quarter last year. Revenues earned by this category of hotels also increased by 6.8 per cent during this period, the official stated.
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