The Facilities Management (FM) market in Oman has witnessed robust growth during the review period; however, the market is still in its nascent stage. The market is highly fragmented with large number of players operating within the FM industry. The FM market in the past was highly dominated by soft services but technological advancement has led to the increasing demand for hard services during the review period.
Oman Facilities Management market has witnessed a robust growth in past few years. Outsourced Personnel services has been the major contributor to revenues of the industry as majority of companies in the country outsource these services.
The market has increased from USD ~ million in 2011 to USD ~ million in 2016. The market has grown at a CAGR of ~% during the period 2011-2016. The major growth drivers for the industry include the booming real estate market, growing construction industry owing to Vision 2030, increasing number of shopping malls and supermarkets and expanding hospitality sector.
Oman FM industry is fragmented in nature and at a nascent stage in the country. The facilities management market in Oman has high potential due to few service providers in Oman FM industry and the low penetration rate presently which gives the opportunity to FM players to enter this market.
Few companies operating in the industry include Renaissance CSG, OIG, Como Facilities Management Services, QBG and EFS. The competitors compete both on the basis of price and quality and are trying to balance both these parameters. Consumers mainly focus on the price and quality in case of buying a service.
The primary challenge faced by the industry is the lack of awareness of FM services, resulting in low penetration. In addition, under-developed outsourcing, regulatory issues, low level of investment, low population of skilled labor, dependency on foreign expats are some of the other major challenges faced by the FM industry.
Market Segmentation by Service Type (Soft Services/Hard Services)
Soft services dominated the market of facilities management in Oman with ~% revenue share in 2016. Soft services are those services which do not require any specific technical knowledge or assistance such as in case of manned security, cleaning, landscaping and others. The revenue share of soft services accounted to ~% in 2016. The development in the sectors such as real estate and tourism owing to Vision 2020 has amplified the demand for soft services in the country owing to rise in construction that demands of housekeeping, security and landscape access.
Hard services accounted for ~% of facilities management market revenue in Oman in 2016 inclining from ~% in 2011 owing to rising awareness about benefits of FM facilities and increase in the number of buildings requiring hard services. Hard services are those services that require technical assistance or knowledge. Increase in demand for construction facilities owing to the focus on green buildings coupled with the Five Year Development plan has led to surge in the demand for hard services in the country.
Market Segmentation By Integrated Services, Single Services and Bundled Services
Single services have contributed highest share of ~% to the revenues of the industry. In this case, a particular service is rendered which means a facilities management company will get a contract to provide one service to the client. These services hold the highest share in revenue generation of FM market as the clients prefer in giving contract for a particular service to the FM Company owing to the parameters such as quality, price and others. There are few players operating in the industry with specialized services and expertise in single service and this reason leads the customers to purchase single FM service.
Bundled services are the second largest contributor in the revenues of the industry with a share of ~% in 2016. These services are demanded by retail and commercial private sectors.
Integrated services are the least contributor in the industry with a share of ~% in the revenues of the facilities management industry in 2016 due to the nascence of FM industry and low awareness. Oil and gas and energy sectors mainly demand for integrated services.
Market Segmentation by Sectors
Commercial sector has led with a share of ~% in the revenues of the industry. FM companies have been providing soft and hard services to commercial complexes over the years and the growth in this sector has created potential for FM companies. Moreover, the retail sector has grown which has provided FM companies with the opportunity to provide services demanded by these complexes.
Hospitality sector added a share of ~% in the revenues of the FM industry. The number of hospitals has been increasing under Oman’s Health Vision 2020 which has raised the demand for hard FM services leading to a positive impact on the market. The launch of Grand Millennium and re-launch of Sheraton witnessed by Oman in 2016 is an example of the growth of hotel industry.
Residential sector has added a share of ~% in the FM market in terms of revenue generation in 2016. This sector has the least share due to less demand of FM services in comparison to other sectors owing to the requirement of mainly soft services such as security and cleaning.
Oman Soft & Hard Services market Segmnetation
Housekeeping services are the largest contributor to the soft services industry with revenue share of ~% in 2016. Growth in the construction and tourism industry has surged the demand for housekeeping services including cleaning, washing and others.
HVAC services have dominated the hard services market in Oman, accounting for ~% of this segment’s revenue during 2016. The sale of HVAC is highly correlated to the construction activities which have increased with Vision 2020 of Oman.
Trends & Growth Drivers
Growth in Commercial Sector: The commercial sector in Oman has been growing in recent years and is expected to grow further with the 9th Five Year Development plan and Vision 2020 of the country. Industrial sector has given a boost to the commercial sector in Oman with various projects developing in this sector, having a positive impact on the Oman Facilities Management market. Moreover the rising retail sector is one of the growth drivers for growth in the commercial sector.
Growth in Hospitality Sector: The hospitality industry in Oman has been growing over the years with the rise in hotels and hospitals in the country due to increasing inflow of expats. This has a positive impact on the facilities management services market with the rise in demand for these services by hotels and hospitals, in terms of hard services. It is estimated that by 2020, the number of hotels in the country will amount to more than ~, owing to country’s tourism growth. The new hospitals, medical centers and clinics in the pipeline due to Oman’s Health Vision are expected to create opportunities for FM industry and increase the demand in the coming year.
Green Building Initiative: The supreme council for planning has formed a committee in Oman to develop comprehensive green design code for Oman in adherence to GCC building code. The construction of such buildings has increased the demand of facilities management in the country.
Rising Competition: The facilities management market in Oman is fragmented with rising competition from various players entering the market. There are various players operating in Oman FM industry with no company having major revenue share. OIG and Renaissance CSG are two renowned companies in the FM market in the country.
Future Growth of Oman FACILITIES management Market
Facilities management market will grow at a tremendous rate in coming future. The market will increase at a CAGR of ~% during 2016-2021 to reach at USD ~ million in 2021 owing to the rising construction industry in the country. Moreover, the facilities management market in Oman is fragmented and nascent. This provides immense opportunity to global and local players to tap the market with technology advancements in the FM industry. Oman facilities management market will be largely dominated by soft services during the forecast period. The soft services market is expected to grow at a CAGR of ~% during 2016-2021 owing to the increasing number of hotels, hospitals and other buildings in the country which will lead to high demand for housekeeping, landscape access and security.