The growth of tourism in the Middle East suffers from ongoing political unrest and conflicts across the region. While previous studies have discussed the impact of psychological factors and political unrest on the tourism industry in the Arab world at an aggregated level, the role of major and dominant political factors such as perceived risks, media, and neutral diplomatic foreign relations on tourism have not yet been investigated. The objectives of this study are to compare the differences between local and international tourists, in the psychological and political risk factors affecting their loyalty to Oman as a tourist destination; investigate how attitudinal and behavioral loyalty is influenced by tourists’ satisfaction, perceived value, attachment, familiarity, and motivations; and measure the extent to which political factors could mitigate the risk of political instability in the region, thereby enhancing the tourism industry in the case of Oman. This study employed qualitative (descriptive and comparison analyses) and quantitative (multiple regression and ordinal logistic models) techniques in the analyses. Findings reveal that international tourists have developed both attitudinal and behavioral loyalty toward Oman in which its neutrality does matter, despite risk perceptions of the region. International tourists significantly report higher satisfaction than locals’ satisfaction with Oman as a tourism destination. It can be concluded that the psychological factors of Omani tourists have outperformed the risk factors associated with the region. Results are important for decision-makers as they reveal the best practices to increase the quantity and quality of tourists based on their characteristics, knowledge, and behaviors. This study reveals potential reforms to increase re-visitations that contain important implications for tourism agencies and private sectors—improving services around tourism sites; investing in sports, wildlife, and adventure tourism; hiring public relations firms for tourism marketing; eliminating any bureaucracy around investors and businesses and welcoming competition; and enhancing domestic tourism in stimulating the economy during downturns.