OMANI MINISTER SEEKS BALANCED TOURISM GROWTH

UNCLAS MUSCAT 000482 SIPDIS SIPDIS STATE FOR NEA/ARP, NEA/PI, EEB/CBA COMMERCE FOR ITA COBERG E.O. 12958: N/A TAGS: ECON EINV MU SUBJECT: OMANI MINISTER SEEKS BALANCED TOURISM GROWTH ¶1. (SBU) On May 13, the Ambassador discussed Oman's tourism outlook with Minister of Tourism Rajha bint Abdulameer bin Ali. Rajha prefaced the conversation by outlining the various tourism resort complexes currently under development in Sultanate. Headlining the extensive list is the $1 billion Muscat-based Wave project, which will consist of three luxury hotels, including the five-star Fairmont and Kempinski chains (and a third expected shortly). The Minister also noted that plans were proceeding for several other integrated hotel complexes in Muscat, including smaller resorts located in the fashionable neighborhoods of the capital, along with developments in Salalah, Yiti, Sifah, and Shinas. Smaller projects will move forward in Khasab (on the Musandam peninsula),Jebel Akhdar (Oman's Rocky Mountains-equivalent),and Ras al-Hadd, home of the country's turtle nesting grounds. ¶2. (SBU) Rajha commented that the government was keeping a close eye on the country's hotel inventory with a view toward striking a balance between occupancy figures and room rates. The Minister believed that "what we have going on is quite enough," but said that she would reserve judgment pending the outcome of the convention center study currently being prepared by Booz Allen Hamilton under the Middle East Partnership Initiative. Regarding the center study, the Ambassador raised the initial finding that a facility of 6,000 would need ample hotel space and an effective convention and visitors bureau in order to be successful. The Minister agreed, stating that "covering the costs of operating the facility is very important to the government." ¶3. (SBU) The Ambassador inquired about the status of the "Journey of Light" project, now called "Omagine," which has the conceptual backing of U.S. entrepreneurs. Rajha noted that the Ministry is still setting aside one million square meters for the project, and that its promoters are working with the government-run tourism development company "OMRAN" to finalize an agreement. "Seems like the investors are still interested," commented the Minister, "but they have to have the funds to finance the landmarks of the development. We will know in a few days whether we are going ahead or not." ¶4. (SBU) On aviation, Rajha reaffirmed the government's position on using Oman Air, in which it recently raised its stake from 33% to 80%, as a vehicle to bring tourists to the Sultanate. She commented that Ahmed bin Abdul Nabi Macki, Minister of National Economy, will chair the new board of the company, which will include ministers from other portfolios. The board, according to Rajha, will develop a new strategy for the airline that will support the government's efforts to broadly promote the tourism industry, rather than specifically focusing on the airline's bottom line. ¶5. (SBU) Comment. The Minister is optimistic that the government is on the right path toward boosting the tourism industry's contribution to the GDP and providing additional employment opportunities for Omani youth. Rajha appeared cognizant that neither would happen overnight, but that a concerted, long-term effort would yield results. For this reason, she is keen on supporting training opportunities for Omanis in the hospitality industry, and is content to have hotels initially staff their facilities with foreigners while their management teams train Omanis to assume a greater number of positions. End comment. GRAPPO