While the attention of the most part of hospitality and tourism world is on Libya and the North African Arc, Oxford Brookes University’s Alexandros Paraskevas warns that there is another emerging area of instability that may be far more important.

In the past few weeks the unrest in Yemen and Bahrain made headlines but we’ve been also witnessing protests in one of the most stable countries in the Arabian Peninsula: Oman.

In the light of the overall events in the Middle East and some internal protests, Oman’s leader for the last 40 years, 71-years-old Sultan Qaboos bin Said, announced last Sunday 50,000 new jobs and a $390 monthly stipend for employment seekers. A day earlier, he replaced six members of his Cabinet and announced an increase in the monthly stipend for university and vocational school students. Nevertheless protests in Muscat and Sohar, among other spots, continued this week and the army was forced to disperse protests with gunfire. There were also some strong ‘anti-protest’ gatherings outside mosques in Muscat voicing their support to the existing regime.

In a country where the percentage contribution of travel and tourism to the sultanate's GDP is expected to rise from the 6.7 per cent in 2009 to 9.9 per cent by 2019 and where the government has pledged an investment of $8bn on property developments across the country that will include hotels, shopping malls and Oman’s largest conference centre, there may be higher stakes for major industry players than in Egypt, Libya or Tunisia. For example, Accor is actively seeking sites for a Sofitel hotel in Muscat, more midscale developments, as well as a Pullman hotel to address the needs of the meetings and incentive markets, and further Ibis openings whereas IHG is already set to manage the ‘Muscat Project’ hotel to be completed in mid-2013. At the same time Starwood is exploring the potential of the three-star segment for Aloft and a possible Four Points by Sheraton in the new Muscat International Airport while already working on a plan for  a 250-room W Hotel, followed by a 350-room Westin and a 100-key extended-stay Element property in the site where InterContinental Muscat currently is. Many other industry players have increasing interests in the area.

Meanwhile, in neighbouring countries like the United Arab Emirates, Qatar, Kuwait, and more importantly, Saudi Arabia, each one with its own political and market dynamics, the situation is becoming quite complex with governments trying to deal with it in a more pre-emptive manner. Retailers in the United Arab Emirates, for instance, announced that they will reduce prices for nearly 250 essential commodities by 20 to 40 percent through the month of March in ‘people-friendly’ move of the government. On the other hand, the arrest of the prominent Shia cleric Tawfiq-al-Amir in the Eastern Province of Saudi Arabia this week is a totally different example of these pre-emptive moves. This arrest may, however, end up sparking stronger unrest among the kingdom’s Shiite minority and raise the threat of a destabilisation campaign which will most certainly be backed by Iranian interests. There are some reports of mass political protests planned for 11 and 20 March. Although these reports are not confirmed and even if any potentially violent incident will more likely be between indigenous Shiites and Sunnis rather directed to western properties, hotels in Al Hufuf (where Al Amir was allegedly arrested) and its vicinity, such as the Al-Ahsa InterContinental, the Sofitel, Le Meridien and Holiday Inn in Al Khobar, the Holiday Inn in Hafr Al Batin and the Sheraton in Dammam, among others, will have to be extra vigilant around these dates.

Further instability in the region may cause delays, postponements or cancellations of ongoing and prospective hotel and tourism infrastructure projects and investors need to take seriously into consideration this emerging risk. Iran, for example, disputed this week the legality the United Arab Emirates’ construction of islands in the Persian Gulf without other coastal countries’ approval claiming that such a project will reduce by 10 kms the distance between the Emirates and Iran’s island of Abu Musa, effectively changing the water borders in the Gulf. Hotel developers and operators eyeing such island projects as, for example, the 300-600 room central hotel with an 18-hole golf course and a 400-boat marina in the Durrat Al Bahrain project, may need to re-assess the risks of their potential investments there.

In conclusion, with each country in the peninsula having its own unique characteristics and internal dynamics that may spark unrest and political violence for completely different reasons, there is a need for the hospitality industry to shift its focus to the Persian Gulf as the stakes there are much higher and the challenges to be faced much more complex.

Dr Alexandros Paraskevas is a Senior Lecturer in Strategic Risk Management in the Department of Hotel, Leisure and Tourism Management of the Business School at Oxford Brookes University, Oxford, UK.