US embassy cable - 05MUSCAT1442

UNCLAS MUSCAT 001442 
 
SIPDIS 
 
STATE FOR NEA/ARPI 
 
E.O. 12958: N/A 
TAGS: ECON, EAIR, MU, Tourism 
SUBJECT: THE INN CROWD 
 
REF: MUSCAT 1199 
 
1. (U) Summary:  A sprawling new Muscat resort complex slated 
for a soft-opening in November shoulders high expectations 
for raising Oman's international profile as a tourist and 
conference center destination, adding jobs to the economy, 
and alleviating a winter shortage of hotel rooms and 
conference space.  The complex's opening also coincides with 
an effort to market Oman increasingly as a year-round tourist 
destination.  End Summary. 
 
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COMPLEX NEARS COMPLETION 
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2. (SBU) Emboffs recently called on Shangri-La Business 
Development Manager Mila Taneva to tour the construction site 
of the Barr Al-Jissah Resort complex, located about ten 
kilometers southeast of Muscat.  The beach-front development, 
consisting of three hotels managed by Shangri-La Resorts, 
represents an approximately USD 181 million investment by the 
Oman-based Zubair Corporation (owned by Mohammed al-Zubair, 
economic advisor to the Sultan) and the Government of Oman. 
Shangri-La plans the soft opening for the 306-room Al Waha 
and the 198-room Al Bandar hotels in November 2005, with a 
formal opening in January 2006.  (Note: The November opening 
fulfills Mohammed al-Zubair's pledge to the Sultan to open 
the complex by Oman's National Day on November 18.  End 
note.)  Both hotels will cater to leisure and conference 
travelers, with the Al Bandar hotel sporting a 700-seat 
ballroom.  The site also contains an outdoor amphitheater, to 
which the complex hopes to draw the famous acts that already 
commonly play in Dubai.  The 180-room, "six-star" Al Husn, 
which intends to focus exclusively on the luxury segment, 
will open in early 2006. 
 
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SIGNIFICANT IMPACT EXPECTED 
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3. (SBU) The resort complex figures to have a significant 
impact on Oman,s tourism industry.  Taneva noted that the 
complex itself will generate up to 1,200 jobs, with 65% of 
the positions filled by Omani nationals.  She further 
indicated that approximately 4,000 suppliers and service 
providers would also benefit from the complex,s operations. 
Taneva said that Shangri-La has forecasted a strong first 
year occupancy rate of 60%, with a target occupancy rate of 
80% after five years.  She also remarked that the company has 
projected an average visitor stay of 7 days, with each 
visitor spending between 60-150 rials (154-387 USD) per day, 
depending on the hotel.  Increasing Muscat's inventory of 
five-star hotel accommodations by 60%, Barr Al-Jissa will 
alleviate room and conference space shortages currently 
prevalent the peak winter months. 
 
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RAISING OMAN'S PROFILE 
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4. (SBU) Muscat,s hotel industry is hopeful that the resort 
complex, and the planned construction of another one just 
south of the Barr Al-Jissah, will contribute to Oman,s 
campaign to turn itself into a premium resort and conference 
center destination.  Walid Harouni, until recently general 
manager of the Muscat Intercontinental Hotel, believes that a 
strong opening for the complex would indicate early success 
in attracting more travelers to Oman, and ultimately benefit 
all hotels.  He further hoped that the complex's ability to 
raise Oman's profile will assist area hotels in filling rooms 
during the slower summer months, where monthly occupancy 
rates generally dip below 50%.  His comments were echoed by 
the GM of the Muscat Grand Hyatt who told another Emboff that 
Barr al-Jissah will allow him to redirect clients when he is 
fully booked.  "Last year, all we could do was to send them 
away," he explained.  "Now we can keep them in Oman instead 
of sending them to another country." The general manager of a 
leading car rental firm told us in confidence that Muscat 
Municipality will soon ditch its annual wintertime "Muscat 
Festival," which has failed to pull in outside tourists, in 
favor of a larger scale summer marketing program that will 
offer cultural happenings every night.  Until now, Muscat has 
been content to cede the summer tourist season to the 
southern port of Salalah, with its monsoon-cooled climate and 
verdant hills that draw big crowds from throughout the 
region, including Muscat residents keen to escape the summer 
heat. 
BALTIMORE