The Opportunity
Of all Oman’s diversification options, tourism arguably offers the highest near-term return on investment. The Sultanate possesses world-class natural and cultural assets. The global tourism industry is growing, with particular demand for authentic, off-the-beaten-track experiences that Oman offers in abundance. Tourism is labour-intensive, creating jobs across skill levels. It generates foreign exchange. It stimulates small business development. And it builds international awareness that benefits other economic sectors. Pre-pandemic, tourism contributed approximately 3 percent of GDP – well below potential.
What Holds It Back
Multiple barriers constrain tourism growth. Visa complexity, though improved by the e-visa system, still deters spontaneous travel. Flight connectivity to key source markets (Europe, East Asia) is limited, with Oman Air’s network smaller than regional competitors. Hotel supply is insufficient, particularly in the mid-range segment and outside Muscat. Domestic transport between attractions is difficult without a rental car. Activity and experience infrastructure is underdeveloped. Marketing budgets and international profile lag far behind the UAE and increasingly Saudi Arabia. And perhaps most fundamentally, a tourism service culture is still developing.
Comparative Advantage
Oman’s tourism competitive advantage lies in precisely what it is not: it is not Dubai (artificial, commercial, overwhelming) or Saudi Arabia (massive, still developing its tourism identity). Oman offers genuine Arabian culture and heritage, unspoilt natural landscapes, safe and welcoming communities, and a scale of experience that feels authentic rather than manufactured. This positioning – premium authenticity – appeals to high-value travellers willing to spend more per visit. The target should not be mass tourism but sustainable, high-yield tourism that preserves the assets that make Oman distinctive.
Action Priorities
To unlock tourism potential, Oman needs: a significant increase in international air routes, potentially through open-skies agreements and charter flight incentives; rapid expansion of mid-range accommodation through investment incentives and simplified hotel licensing; a national tourism transport network including domestic flights, quality coach services, and scenic driving routes; an experience economy investment programme supporting guides, adventure operators, cultural sites, and marine tourism; workforce training in hospitality skills; and a substantially larger international marketing budget. Tourism is Oman’s most accessible diversification win – but only if the infrastructure bottlenecks are urgently addressed.