How Oman Facility Management Market is positioned?
Facility Management (FM) market in Oman has witnessed robust growth during the review period; however, the market is still in its growth stage. The market is highly fragmented with large number of players operating within the FM industry. The contracts are majorly awarded to the inside based contractors.
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. The share of hard services has been increasing over the years in the country on the basis of revenue.
Outsourced Personnel services has been the major contributor to revenues of the industry as majority of FM companies in the country outsource these services.
The major growth drivers for the industry include the booming real estate market, growing construction industry, increasing number of shopping malls and supermarkets and expanding hospitality sector. The focus on Green Buildings aligned to Vision 2030 has also created opportunities for FM services in the country through the development of large scale projects.
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 availability of skilled labor and dependency on foreign expats are some of the other major challenges for the facility management market.
Oman Facility Management Market Segmentation
By Soft and Hard Services
Soft services dominated the market of facility management in Oman with ~ revenue share in 2017. The revenue share of soft services accounted for ~ of industry revenue during 2011. The decline in revenue share during 2011-2017 can be advocated to the fact that various firms hire manpower for soft services such as housekeeping and manned security instead of giving contract to the FM companies for the same. Hard services accounted for ~ of facility management market revenue in Oman during 2017, inclining from ~ in 2011 owing to rising awareness about the benefits of FM and increase in the number of buildings requiring hard services.
By Single, Bundled and Integrated services
Single services have contributed highest share of ~ to the revenues of the industry during 2017 with a CAGR of ~ during the period 2011-2017. These services hold the highest share in revenue generation of FM market as clients prefer in giving contracts for a particular service to the FM Company owing to parameters such as quality, price and other factors.
By Outsourcing and In House
Outsourcing services segment has dominated the overall market, accounting for ~% of overall FM industry revenue during 2017. The companies outsource the services in cases when service is not available with the company or a company does not want to involve the manpower in a small project. The reasons for FM companies outsourcing these services and entering into contracts with other companies include cost-efficiency, high competition and high quality. In-House services have added a share of ~% in the industry in 2017 and increased at a six year CAGR of ~%. Many companies in the facility management market have their in-house teams for FM services, especially soft services. The profit margins in case of in-house are high as compared to outsourcing of services.
Industry and other sectors which majorly include public Infrastructure such as Airport, labor camps, oil & gas plants, energy plants, logistic parks, industrial plants and education institutes, schools, universities collectively contributed ~% to the overall facility management market revenues in the Oman in 2017. Most of the development in this sector is being witnessed in three regions Salalah, Sohar and Duqm. Therefore the demand for facility management service is from these regions. The retail sector has grown which has provided FM companies with the opportunity to provide services demanded by these complexes. The increase in the number of tourists in the country has led the hospitality sector to grow over the years and this can be advocated to the fact that the number of tourist visas issued has increased by ~% from 2015-2017. Residential sector has added a share of ~% in the FM market in terms of revenue generation in 2017. The residential sector prefers not to give facility management contract to the companies as it incurs additional cost.
Trends and Developments in Oman Facility Management Market
The commercial sector in Oman has been growing in recent years and is expected to augment further given the 9th Five Year Development plan and Vision 2020 of the country. The hospitality industry in Oman has been growing during the review with the rise in hotels and hospitals in the country due to increasing inflow of expats. The supreme council for planning has formed a committee in Oman to develop comprehensive a green design code for the country in adherence to GCC building code. The construction of such buildings has increased the demand for facility management in the country. The facility management market in Oman is fragmented with rising competition from new companies entering the market.
The market dynamics has changed in terms of number of players as domestic and international players have been entering the FM industry. With major MNCs entering this market, competition has further streamlined in recent years.
Oman FM industry is fragmented with around ~ companies operating in the market. The facility management market in Oman has high potential due to lack of awareness, low availability of specialized and integrated service providers and low penetration rate, which provides an opportunity to FM players to enter this market.
Oman Facility Management Market Future Outlook and Projections
The facility management market in Oman is fragmented and positions at growth stage. This provides immense opportunity to global and local players to tap the market with technology advancements in the FM industry. This will further lead to various acquisitions and mergers in this industry making a positive impact on the market in terms of revenue generation. The cost of doing business in Oman is anticipated to increase in 2017 and the FM industry will be impacted by ~% increment for Omani employees, change in visa fees for expats and the increase in corporate tax from ~% to ~%. Growing hospitality and healthcare industries in the country is expected to trigger the demand for HVAC services, electromechanical services, operational and maintenance services and other services. More IT-based FM companies are expected to grow in future and the focus on green building initiative will further increase the scope for the FM industry. Additionally, the rise in various industries due to initiatives taken under the 9th Year Development plan, 2016-2020 will trigger the demand of FM services which will lead the market to rise. Oman facility 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 2017-2022 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. Hard services market is also expected to witness a robust growth in absolute terms by achieving a CAGR of ~ % due to increase in demand for HVAC services, electromechanical services, operational and maintenance, fire safety and security system.
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Ankur Gupta, Head Marketing & Communications