Oman attracted nine projects from 2016-20; placed at 5th position in MEA in the number of FDI projects
Muscat – The United Arab Emirates (UAE) continued to be the paradise for foreign investments in the tourism sector holding close to 60 per cent of the market share in the entire Middles East and Africa (MEA) region.
Oman became the fifth best destination winning tourism foreign direct investments (FDI) in nine projects during the last five years ending in 2020.
The data, complied in the Tourism Investment 2021 report by fDi Intelligence, showed that the UAE retained the top position as a destination for foreign direct investments by number of projects in the MEA, holding a 58 per cent of the market share in the region in 2020.
fDi Intelligence is the Financial Times’ specialist unit dedicated to foreign direct investment, conducted in association with United Nations World Tourism Organization.
According to its report, foreign investors announced 263 tourism projects worth US$21.8bn in the MEA over the five year period from 2016 to 2020. Oman attracted nine projects during the period, ranking fifth in the number of projects in the MEA, behind the leader UAE with 78 projects, Morocco at a distant second with 22 projects, Egypt (20) and Saudi Arabia (18).
The impact of the COVID-19 pandemic was visible in the capital investment into the MEA in 2020. It witnessed a massive slide in foreign investments that fell 82 per cent compared to the investments in 2019, dropping to US$1.6bn from US$9.02bn.
The number of jobs created in the MEA tourism sector also experienced a similar decline, decreasing from approximately 17,400 in 2019 to just 2,800 in 2020.
‘The primary destination market for investment in the MEA between 2016 and 2020 was the UAE, winning 30 per cent of all tourism FDI projects and 33 per cent of tourism capital investment into the region. The UAE was also the top country for capital investment with more than US$7.2bn invested in the country between 2016 and 2020,’ stated the report.
Morocco and Saudi Arabia ranked second and third respectively in terms of tourism capital investment between 2016 and 2020, attracting a combined US$3.5bn.
During this period, Morocco and Saudi Arabia respectively held a nine per cent and seven per cent market share of the total tourism capital investments in the region.
The UAE held the top position even for the number of tourism-linked jobs created between 2016 and 2020.
With massive investments flowing in, the UAE ended up creating 11,000 new jobs in the sector, followed by Morocco with 3,800 and Egypt with 3,600 new jobs created during the five-year period.
“The kind of travelling and investment bonanza of the pre-COVID days is gone – perhaps for good. The data contained in this report gives a glimpse of the kind of armageddon the industry experienced in 2020,” said Jacopo Dettonim editor-in-chief of fDi Intelligence.
“Figures from the UNWTO show that international arrivals in 2020 dropped by 73 per cent from the previous year, causing an estimated US$1.3tn loss in export services, jeopardising
up to 120mn direct jobs,” Dettonim said.
After a very strong investment cycle in 2018 and 2019, he said “investment in the tourism industry plummeted, with the number of projects announced by foreign investors falling by 63 per cent in 2020 from the previous year”.
The UAE was the primary source country for tourism investments between 2016 and 2020, investing in 61 outward FDI tourism projects which equated to more than half of all outbound FDI tourism projects from the region. Qatar followed it with ten outward investments and Saudi Arabia and Israel in joint third with eight projects respectively.