Salalah: A Promising Investment Destination for Tourism

Salalah: A Promising Investment Destination for Tourism

Salalah is a city in southern Oman that is becoming increasingly popular as a tourist destination. The city has a mild climate, with average temperatures ranging from 25 to 30 degrees Celsius throughout the year. This makes it a popular destination for people looking to escape the heat of the Middle Eastern summer.

In addition to its favorable climate, Salalah also has a number of other attractions, including:

  • Beautiful beaches: Salalah has a number of beautiful beaches, including Al Mughsail Beach, which is known for its white sand and clear waters.
  • Historic sites: Salalah is home to a number of historic sites, including the ruins of the ancient city of Sumhuram.
  • Natural attractions: Salalah is surrounded by natural attractions, including the Dhofar Mountains and the desert.

The tourism industry in Salalah is growing rapidly. The number of tourists visiting the city increased by 12% in 2022, and the government is expecting further growth in the coming years.

This growth in tourism is creating a number of investment opportunities in Salalah. Investors can invest in a variety of tourism-related businesses, including:

  • Hotels: There is a high demand for hotels in Salalah, especially during the summer months. Investors can build or purchase hotels to cater to this demand.
  • Restaurants: There is also a high demand for restaurants in Salalah, as tourists look for places to eat that offer a variety of cuisines. Investors can open or purchase restaurants to meet this demand.
  • Tour companies: There is a growing demand for tour companies in Salalah, as tourists look for help planning their trips and activities. Investors can start or purchase tour companies to capitalize on this demand.

Several intriguing resort developments are currently underway in the region. These projects are being undertaken by reputable international developers with extensive experience and state involvement. The majority of the developments consist of 4 and 5-star hotels with transparent management, as well as various types of villas.

The region can be seen as a “healthy” version of Egypt, resembling an improved version of El Gouna (built by the same developer, Orascom) with a significantly higher price tag compared to Egypt. Holiday Homes in the current market offer yields of around 8-10% with an upward trend, and those who purchased properties a few years ago are experiencing yields of around 12%. The resort is open year-round and features coves with breakwaters, allowing the sea to be suitable for swimming during the summer months and avoiding problems with electricity.

One surprising observation was that in addition to residents of the Gulf, the region is popular with tourists from Eastern Europe. Currently, with the absence of Arab tourism, the resorts are half-filled with affluent Slovaks, Poles, Czechs, etc. This is likely the result of the concerted efforts of Eastern European tour operators and an established trend that, as tourism cycles return, could evolve from the “first-time visitor” stage to the purchase of local units and an inflow of capital into the country.

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