SMEs’ support key to tourism boost in Oman

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Muscat: Oman’s government will work towards providing Small and Medium Enterprises (SMEs) more partnership opportunities with big companies in the country to help further grow its tourism sector.

The move is being organised by the Ministry of Tourism, in collaboration with Riyada (the Public Authority for SME Development) and Omran, the government’s tourism investment arm, to encourage SMEs come up with an array of ideas to help diversify the tourism offerings in the country and partner with companies to help them launch new projects.

The Ministry of Tourism is working towards improving the business environment for SMEs, as well as helping them secure loans and projects.

Musallam Al Nabhani, director of SME and Tourism Initiatives Support at the Ministry, told Times of Oman: “The goal is to create a conducive environment for SMEs to grow and become competitive, as well as helping them overcome challenges that they may face in the tourism sector.

“For example, the ministry coordinates with financing bodies to facilitate SMEs getting the funds they need for their projects, as well as working with the purchasing and tender bodies at the ministry itself to ensure

that some projects and work can go to SMEs.”

According to Al Nabhani, the ministry also works on supporting initiatives that result in SMEs making money in a manner “that is economically feasible for the local community.”

Naif Al Balushi, director of Support and Institutional Development at Riyada, said that there were around 554 tourism SMEs registered in Riyada alone.

“This represents 1.31 per cent of all SMEs registered with us, but that doesn’t mean this is the total of all companies in the sector,” he said. “There are some that are not registered with Riyada, because signing up for these programmes are voluntary.”

Riyada helps these SMEs get advice they need to compete in the sector and also coordinates with the government in facilitating procedures for SMEs that provide camping and tour guide experiences, hotel services, and entertainment, among others. Riyada also provides incubation services for companies to ensure companies are supported during their early years.

“There are four tourism SMEs being incubated by Riyada right now,” Al Balushi added.

“These are given support for a three-year period so that they can enter the market on a sure footing,” he said.

Al Balushi added, “Our incubator has proven very successful in raising the success rate of start-ups. For example, Godoba has won a prize for its work in tourism media in 2019, and it is one of the companies incubated by Riyada.”

SMEs themselves should reach-out to other companies to build good relations and collaborate, he said, adding, “Their plans must begin with understanding the legal terrain, followed by getting advice and doing a feasibility study.

“Finally, companies must establish a good relationship with other projects that support their own. A high number of companies does not necessarily lead to higher productivity. The real difference comes from how exemplary their services are. Quality service allows these establishments to grow and develop, which allows them to please customers and compete internationally.

“The tourism sector is promising because of the natural elements that make Oman shine in tourism, and so we believe that tourism is a fertile ground for youth and SMEs,” Naif Al Balushi said.

Peter Walichnowski, the CEO of Omran, had said that SME development was one of five main points in Oman’s tourism strategy for 2040.

“Fundamental to the strategy are five important criteria that need to be achieved,” he added. “The first is to create more jobs – 500,000 jobs by 2040, then to increase investment in the country to OMR 19 billion of investment, and to increase tourism contribution to GDP to 6 to 10 per cent, which is closer to what the international goals are, and to develop local economies and SMEs to over a thousand businesses.

“This is important because in most developed economies, SMEs contribute about 80 per cent of the GDP, in Oman that is between 15 to 20 per cent,” he said.

“What this says today is that the government has a heavy hand in the sector, and the trend should be to move towards private enterprises. This applies to all successful tourism locations and countries around the world. Another point is to improve the quality of life and strengthen the identity and pride internationally for Oman.”

In addition to this, Dr Khalfan Al Asmi, the acting Dean of the Modern College of Business and Science, recently asked for companies to work together with SMEs to move the sector forward.

“We hope to highlight the importance of incentives for SMEs and young people to own businesses such as tour companies, sightseeing, desert hiking, mountain climbing, parasailing, and others. We at MCBS have an SME incubation and innovation hub that aims to encourage young people to start their businesses,” he said.

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