Can Islamic finance fuel the next phase of tourism growth in Oman?
Published: 04:07 PM,Jul 21,2026 | EDITED : 08:07 PM,Jul 21,2026
Increasingly recognised by stakeholders as a sound financial solution, Islamic finance represents a strategic lever for revving up Oman’s tourism industry. Islamic finance thrives alongside tourism, with multiple synergies driving the potential for harmonious growth. Policy measures and investments now emerging can give this growth an added boost.
Islamic finance optimises the growth trajectory of Oman’s tourism sector through the development of Sharia-compliant financial products, financial inclusion for micro-businesses and start-ups pursuing the halal economy, and the branding of Oman as a halal travel destination. By diversifying Oman’s tourism finance sources with sukuk and Islamic banking, the sector benefits from risk-sharing models, broader access to capital, and ethical finance principles appealing to both Muslim and non-Muslim travellers. Capitalising on Islamic finance’s strong momentum, and among growing global interest in tourism, Oman enjoys a window of opportunity to establish a strong position through timely policy measures.
Bridging policy intentions with project-level implementation, Nasser al Kindi, CEO of Invest Oman, said; “At Invest Oman, we view tourism and real estate as key drivers of diversification, offering world-class opportunities rooted in sustainability and culture. By streamlining approvals, fostering partnerships, and ensuring investor confidence, we align global capital with Vision 2040 to deliver lasting value for Oman.”
Such growth holds more relevance as Tourism industry keeps expanding due to Oman Vision 2040, accounting for an estimated 2.7% of the GDP, thus forming a critical element of the economy's diversification efforts. To secure economic future and create vibrant jobs across many youth segments; integrated strategies promoting tourism development have been adopted by the Sultanate of Oman, viewing finance as a strategic lever to enhance further opportunities for economic development creation. Specifically, the controlled emergence of Islamic finance instruments and products in Oman since 2011 reinforces the recognition of Islamic finance as a formal part of the nation’s economy and society and signals its availability to accompany the much-needed revival of tourism activities across the country. In terms of broader prospects, the value of Islamic finance in the Sultanate of Oman, according to the prediction by Fitch Ratings, should reach $45 billion in 2026.
Research and practical experience asserted that the impact of Islamic finance have been observed in a variety of industries, including agriculture, manufacturing and services, as well as in sectors such as aviation, education, health care, transportation and logistics. The global economic challenges that many countries continue to face again reinforce the role and importance of Islamic finance as a catalyst for growth in the tourism sector.
As such, the Sultanate of Oman has always been focused on promoting sectors not dependent on oil, while at the same time maintaining cultural traditions and sustainable ecology of the region. There is room for growth in Islamic financing, as there could be a great need for better financing and risk-sharing tools.
Khaled al Kayed, Former CEO of Bank Nizwa reinforced the importance of Islamic finance by underscoring that “The role of financial institutions is much more than just providing capital. Our contribution also lies in helping to shape ideas and promote joint action. Our intention is to broaden the debate regarding the possible ways in which Islamic finance can be used to develop in new emerging areas, promoting innovations and building resilience in the process. By participating in these kinds of meetings, we show our will and ability to develop new sustainable financing models, exchange experience and propose effective solutions considering socio-economic peculiarities of the Sultanate of Oman.”
Notably, Islamic Financial tools can be used to cater to the different capital needs of the tourism industry. The reason being, that through the use of Mudarabah and Musharakah techniques, there is the ability to create asset backed projects that can be distributed incrementally to relieve any funding problems in the development stage such as those involving the establishment of beach resorts and religious tourism facilities in Oman. Off-balance sheet Sukuk issuance as well provides other means for raising capital, whether from new projects or old ones. The benefits come from portfolio gains derived from tourism clusters, cross-border tourism visits, and increased liquidity of assets.
The best example of this tendency is cooperation between OMRAN Group and Alizz Islamic Bank in Madinat Al Irfan, which shows growing trends in Islamic banking towards expanding investments in infrastructure development and creation of economic projects. Tourism and Islamic banking form inseparable parts of economic diversification policy of Oman—tourism brings socio-economic benefits to the country and Islamic banking contributes to ethics, risk sharing, and asset investments.
Accordingly, prioritising tourism-related asset-backed Islamic financing can drive a substantial impact across the economy. Policy incentives to create viable development clusters, complementary regulatory enhancements, and configuration of project risk-sharing structures to fit the domestic Islamic finance marketplace can support the scale-up of this model.