Omanization Hits 10% in Tourism Sector As Locals Enter Workforce

Boosting the level of locals in the private sector is key to Oman’s national development goals

Around 10 percent of workers in Oman’s tourism sector are now nationals, according to a statement from the Ministry of Tourism. Tourism is expected to be one of the largest industries in the country as it is trying to diversify its economy.

The sultanate, like its neighboring GCC countries, has been working to boost the level of locals in the private sector.

At the end of 2020, around 15,500 Omanis were working in the tourism sector which accounted for some 142,240 jobs in the sultanate.

Oman has invested in tourism, granting 20 licenses for projects. The country is aiming to provide 15,500 direct job opportunities and 31,000 indirect job opportunities with a total of 465,000 job opportunities with the completion of these projects, the statement said.

The country’s Vision 2040 aims to increase the share of Omanis in the private sector workforce to over 40 percent. Quotas for sectors have been set, and the government has taken steps to make sure Omanisation goals are being met.

The quotas are currently set at 60 percent for transport, storage, and communications; 45 percent for finance, insurance, and real estate; 35 percent in the industrial sector; 30 percent for hotels and restaurants; 20 percent in the wholesale and retail trades; and 15 percent in contracting.

In January, Oman’s wealth fund said it would restructure its tourism and real estate investments with Oman Investment Authority transferring a shareholding company, a tourism development project, and resorts to the Omran Tourism Development Co., also known as Omran Group.

Last June, Oman combined its two wealth funds – the State General Reserve Fund and the Oman Investment Fund – into one entity.

The sultanate – one of the Gulf’s poorest countries – is aiming to diversify its economy as it struggles to improve its finances. Its budget deficit has swollen to become the widest in the region, due to lower oil prices and lockdowns due to the COVID-19 pandemic.

What Is The Make-up Of the Tourism Sector In Oman?

Tourism contributed 2.8 percent to the Omani GDP in 2016. It grew from RO 505 million (US$1.3 billion) in 2009 to RO 719 million (US$1.8 billion) in 2017 (+42.3 percent growth). Citizens of the Gulf Cooperation Council (GCC), including Omanis who are residing outside of Oman, represent the highest ratio of all tourists visiting Oman, estimated to be 48 percent. The second-highest number of visitors comes from other Asian countries, which account for 17 percent of the total number of visitors.

A challenge to tourism development in Oman is the reliance on the government-owned firm, Omran, as a key actor to develop the tourism sector, which potentially creates a market barrier-to-entry of private-sector actors and a crowding-out effect. Another key issue to the tourism sector is deepening the understanding of the ecosystem and biodiversity in Oman to guarantee their protection and preservation.

In the backdrop of these challenges to the sector, the Central Bank of Jordan has recently said that the tourism revenues have dropped by 77.6 percent in Q1 of 2021 and reached TND175.3 million ($247.2 million) compared to TND780 million during the same period in 2020.

Due to the coronavirus pandemic, the government shut down the airport for six months in 2020. It further postponed reopening it several times due to concerns that travelers might cause a spike in cases.

Moreover, the Bank revealed that outgoing transfers dropped by 0.2 percent in Q1 of 2021 and reached TND599.6 million compared to the same period in 2020.

Transfers by the Jordanian workers were impacted by the pandemic, as well as the drop in oil prices.

In April, the World Bank expected Jordan’s real GDP growth to recover to 1.4 percent in 2021 from an estimated contraction of 1.8 percent over last year.

It also noted that its public debt climbed to 109 percent at the end-2020, compared to 97.4 percent in 2019.